Cox Shifts Web Strategy To Local Control

By: Carl Sullivan Atlanta's Cox Enterprises has abandoned its aggressive strategy of running autonomous local city guides independently of local Cox newspapers, TV stations, and cable outlets.

The control of 60 local Web sites, including advertising sales and marketing, will no longer be directed from the Atlanta headquarters of Cox Interactive Media, said Chief Operating Officer Scott Whiteside. Cox Interactive President Peter Winter resigned from the company last month and is now consulting Cox Enterprises on new-media issues, Whiteside said.

Under the new corporate structure, Cox Interactive Media will only provide technical and other assistance to the sites. Cox Interactive has downsized from 450 jobs last fall to about 255 today. Whiteside said additional layoffs are possible, depending on what direction local Cox media properties decide to take with their online initiatives.

In Atlanta, for example, Cox Interactive ran AccessAtlanta.com as a separate site from The Atlanta Journal-Constitution's Web site, ajc.com -- although the sites did share content. Now the newspaper will decide what direction the two sites should take.

About 20 of the sites formerly controlled by Cox Interactive are in major markets such as Seattle and Austin, Texas, with the remainder falling in small markets such as Nacogdoches, Texas, according to Whiteside. The Cox radio division has always run an additional 70 to 80 Web sites on its own.

Cox closed LAinsider.com in Los Angeles last year and recently shuttered sa360.com in San Antonio, Texas. Whiteside said there are currently no plans to close other sites, but those decisions now rest with the local media properties. He said the Los Angeles site was a unique experiment in a market where Cox didn't have any presence.

Whiteside said Cox had to change direction because it had built Cox Interactive on a scale for expanding into the top 40 markets. But Cox wasn't able to find a national partner to help build such a large network as the economy faltered.

Peter Krasilovsky, vice president with Borrell Associates of Hampton Roads, Va., said Cox Interactive's plans were perhaps too ambitious. "Peter Winter may turn out to be a true visionary a few years down the road," he said, pointing to Cox Interactive's aggressive strategy of establishing independent online media outlets.

"They also hoped for an IPO and that turned out not to happen," Krasilovsky said. "They did fairly well in national advertising, but site traffic was never very strong in markets where they didn't have another Cox media property to promote the site."

Outsiders might think the competition between separate advertising sales staffs for the Web sites and local Web properties may have been a culprit in Cox Interactive's failure, but Whiteside disputes that notion. "Cox competes a lot among its media companies," he said. "You have a Cox newspaper competing against a Cox TV station and radio station in some markets. That's part of the corporate culture."

Whiteside added that Cox Enterprises isn't pulling away from the Internet. "We still think there's a tremendous opportunity for advertising and we're still in the very early days. We need to have more participation from the local media companies to succeed."