Classifieds Network Contains 70% of All UK Ads

By: Steve Outing

In the United Kingdom, eight regional newspaper groups have officially banded together to create a national classifieds service on the World Wide Web. Called ADHunter, the database will contain ads from 558 separate daily, weekly and free weekly publications (with a combined print circulation of 39 million). The service will include three major components: JobHunter, AutoHunter and PropertyHunter and be available in early 1997.

The eight consortium members claim to have more than 70% of classifieds ads placed in British newspapers. The regional publishers include Bristol United Press, Eastern Counties Newspapers Group, Johnston Press, Newsquest Media Group, Northcliffe Newspaper Group, Trinity International Holdings, United Provincial Newspapers and Westminster Press. The consortium also is negotiating with other groups that carry classified advertising.

Internet users will be able to access the database for free. The consortium says it will develop value-added services, and ADHUnter will sell advertising and sponsorships at the national level. Most users would enter the national database through the Web site of their local paper, but there also will be a national Web site entry point to the database. The model sounds very similar to AdOne and AdQuest, national classifieds networks of newspapers in the U.S., and to the Murdoch group's national newspaper classifieds network in Australia. (The Murdoch ads service, however, is restricted to News Corp.'s Australian properties.)

There are an estimated 12 million PCs in the UK, with more than half in the home, and about 2 million Internet users.

Colin Brannigan, a UK new media consultant who helps keep me informed on UK interactive publishing developments, says that Murdoch's News International and a Maurice Saatchi-backed new media company, Megalomedia, had sought to dominate classified advertising on the Internet, "but couldn't do so without the participation of regional publishers. In the end (predictably and sensibly), the publishers decided they didn't need to pay Murdoch or Saatchi exorbitant sums (Murdoch's 'card rate' was said to be 20,000 British pounds per title) for the privilege of using their own databases and chose to set up a national classified database on their own."

"It's an exciting development," says Brannigan, "if only because the regional press in the UK has a long history of competing with each other. At last the Internet, and the threat and opportunities it offers, has brought them into each other's arms in a grand alliance."

Where are the big newspapers?

The ADHunter classifieds alliance in the UK has some parallels to the situation in the U.S., in that the largest newspapers are not represented. New York-based AdOne has created a North American classifieds database with ads from more than 70 newspapers, but all are small or medium size publications. (AdOne CEO Steve Brotman reports that he has signed up a slew of other titles, which will bring the network up to more than 200 papers this fall, and says he's close to deals with some larger papers.) Likewise, AdQuest, another U.S. online classifieds venture, also has been successful in signing up small newspapers (as well as auto dealers) for its national network, which now numbers about 125 affiliates.

It's interesting to note that the larger U.S. newspapers (and most of the medium size ones, too) have not banded together to create their own national Internet classifieds network as a way to address coming competition from non-news companies entering the classifieds game. While the AdOne folks hope to convince large-paper publishers to sign up, most of them aren't biting yet. (I should note that CareerPath.com, the online employment service created by several large U.S. newspaper companies, is a good example of the industry cooperating on interactive classifieds, but its activities are restricted to employment and do not cover the full range of classifieds.)

With so much nail-biting about "classifieds in crisis" (which was the title of a session at the Newspaper Association of America's Connections new media conference in Las Vegas earlier this summer), it's alarming that a national strategy for classifieds has not been concocted yet by the U.S. newspaper industry. (AdOne, obviously, is making a run at being a player in this game.)

Some industry insiders indicate that major U.S. newspapers are holding back on a far-reaching classifieds network because they are waiting for New Century Network to announce its Web classifieds strategy. But the newspaper Web consortium (funded by the nine largest U.S. newspaper companies) is a long way from launch, so publishers are well advised not to wait for NCN to develop its final classifieds strategy before taking action.

ADHunter in the UK is a significant development. I'm watching with great interest to see what the largest U.S. newspapers do on the Internet of similar or greater scope.

This is an issue I expect to be writing about again.

American Reporter wins CDA challenge

A three-judge federal panel in New York on Monday ruled in favor of the Internet-based "newspaper" The American Reporter in its challenge to sections of the Communications Decency Act, granting a preliminary injunction against enforcement of the "indecency" provisions in the law. Shortly after the U.S. Congress passed and President Clinton signed the CDA into law, Shea published an essay online meant to violate the law in order to challenge it in court. The ruling repeats an early judgment of a Philadelphia court, which in June ruled unanimously against the online indecency section as part of a broader ruling against the CDA as a whole. That case should reach the U.S. Supreme Court this fall.

Contact: Joe Shea, joeshea@netcom.com

Pointcast gets newspaper investors

The Pointcast Internet screensaver news service has completed a new round of private financing, bringing in $36 million from publishers Knight-Ridder, Gannett, Times Mirror, and the PAFET newspaper new media consortium, as well as Adobe Systems, Compaq, CUC International, GE Capital and Softbank Holdings. Pointcast also announced this week that it now has more than 1 million registered viewers of its service, only five months after it became available.

Knight-Ridder earlier this month had announced that it will offer regional and local news and advertising to customers in most of its markets, beginning with six of the largest. The PointCast Network is a free, personalized service that uses the Internet to broadcast news and information directly to a viewer's computer screen.

Your chance to quiz Digital Cities' Bob Smith

The Online NewsHour this week is hosting an online forum featuring Bob Smith, vice president of Digital Cities, the America Online-Tribune Co. local online community guide venture (which I've written about occasionally in this column). Here's your chance to ask Smith questions. Answers will be posted on the site this Friday evening. The Online NewsHour is the Web site of the PBS television news show, the NewsHour.

Contact: Scott Anderson, sja.execpc.com

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