Should Newspapers Sell Ads For Yahoo?

By: Carl Sullivan

Remember the portal panic? A few years ago, publishers would quake in their boots at the mere mention of Yahoo Local, Citysearch, or Microsoft Sidewalk.

While those fears have largely subsided along with the dot-com bust, evidence suggests that newspapers should still keep an eye on the local sections of Yahoo, AOL, and MSN.

Borrell Associates Inc. of Portsmouth, Va., recently estimated that newspapers own about $544 million (37%) of the local online advertising market, putting them ahead of the portals, which control about $220 million (15%). These figures include online classifieds.

But that’s not really much to boast about, cautioned Borrell Vice President Peter Krasilovsky. “Having 37% of a very small pie is not such a great accomplishment,” he said. “To really help the Internet mature locally, you’re going to need to win much bigger numbers.”

Krasilovsky said the portals are now focusing on listings-based advertising by partnering with other companies. While selling ads for their print yellow pages, directories companies such as Bell South and SBC are using their sales channels to also sell ads for Yahoo, and they’re keeping most of the revenues. Krasilovsky wonders why newspapers don’t consider similar partnerships with the portals, which in many cases have very different audiences than the local newspaper sites. If those audiences are different, a newspaper wouldn’t be cannibalizing its own Web site by selling ads for a portal; they’d merely be extending their advertisers’ reach to new audiences.

To date, newspapers have only been interested in content partnerships with portals. The Borrell research suggests that there may be some untapped business partnerships between newspapers and portals too.

To read more about Borrell’s research, visit the Newspaper Association of America Web site at http://www.naa.org/TheDigitalEdge/DigArtPage.cfm?AID=4634.

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