Face It: the Future is Online, So Invest Now

By: Jay DeFoore For all the hand-wringing going on over the newspaper industry's sliding circulation and cost-cutting, several developments have converged in recent weeks to suggest that newspaper executives are finally getting with the program when it comes to building sustainable online businesses.

Speaking to investors at last week's Global Media Conference in New York, Washington Post chairman Don Graham diagnosed the problem -- "Our Web competitors, Google in particular, are coming up with clever new products which are designed to make our life harder" and "Young readers are less inclined to read us than I would have guessed" -- before offering the solution: "I have come to believe that we will be able to tell you about certain subjects better on the Internet than we will be able to in print."

As if to drive home Graham's point, the Post last week plucked online news veteran Jonathan Krim out of its print newsroom to serve as director of strategic initiatives for its online unit, Washintonpost.Newsweek Interactive. In a similar move announced a day earlier, The New York Times hired Online Publishers Association President Michael Zimbalist to head its new research & development operation.

Both men come with online bona fides. Krim, the journalist, served as executive editor of TheStreet.com before becoming a technology reporter at the Post. Zimbalist, the business guy, has held marketing and business development positions at the ePod Corporation, United Media, Capital Cities/ABC, and AT&T Downtown Digital.

Both will be freed from daily deadlines and asked to position their respective newspapers to anticipate and capitalize on the latest trends in the ever-changing online universe. Martin Nisenholtz, The Times Co.'s senior vice president for digital operations, told E&P last week the creation of an R&D unit stems from a desire "to allow people to look around corners" and "see what's evolving in the new media landscape."

"The Web really demands some experimentation right now," Krim said.

If newspaper companies don't start looking down the road to understand how podcasts and RSS and Craigslist and blogs are changing their businesses, they may as well throw in the towel right now.

True, the online advertising market has yet to mature, but research firm after research firm is predicting growth near 25% in 2006. Is your online ad sales staff prepared to reach or exceed that? Can they sell advertisers on the benefits behavioral targeting, and cite the studies and statistics to back it up?

In laying out the seven components of a successful online strategy, former Miami Herald executive and current Northwestern University journalism professor Rich Gordon advised newspaper executives to "hire people who can sell online advertising effectively -- as a separate buy, rather than bundled with print ads."

On the content side, is your Web site a 24/7 breaking news environment complete with customizable RSS feeds and active, staff-written blogs bursting at the seams with attitude and reader comments? In short, is there passion in your product?

If not, is it because you're not open to the right kind of experimentation? Are you allowing your younger staff members input into the creative and strategic planning of the site? Do you have programmers on staff that can develop cool mash-ups of the cheapest gas stations in town using free Google mapping technology? Are you allowing readers the option of viewing stories the way they want to view them, or just shoveling content from the print product online?

Sites don't have to buy into every newfangled Web 2.0 dictum, but it certainly wouldn't hurt to test drive a few. You can bet that the Googles and Yahoo!s of the world are trying their damnedest to attract a young, affluent Internet audience.

Hyde Post, editorial director of AJC.com, the Web site of the Atlanta Journal-Constitution, recently explained how his company was testing a new AJC-branded RSS feed reader, still in its nascent stages. Post said one reason for the experiment was to take back some of the user intelligence newspapers have been ceding to Google and Yahoo!

"It's great to have your feeds offered on popular aggregation sites like Google and Yahoo," Post said, "but they're the ones that are learning from that experience. They're the ones getting the intelligence about what people like and don't like. ? We need to learn that."

Rest assured, the impetus for building a vibrant digital future does not sit on the shoulders of newspaper executives alone. Journalists of today and those who want to be employed tomorrow will need to expand their skills to include an understanding of blogging, both in how to scan blogs for story ideas and how to quote-unquote blog themselves. It wouldn't kill you to learn a little HTML too, or figure out how to gather video and sound. Papers as big as The New York Times and as small as the Montgomery (Ala.) Advertiser are doing it, so why aren't you?

Change comes slow, especially to an industry as steeped in tradition as the newspaper business. But the time is now. Even in the bad news of a memo announcing layoffs, one can see signs that the industry is starting to recognize a brighter digital future. In a note to staff informing them that 28 jobs had been eliminated, including the storied City News Service, Chicago Tribune Editor Ann Marie Lipinski said that the company would continue to invest in strategic areas, namely the paper's Web site.

"At the same time that we are making difficult choices about things we will no longer do, it is important to plan aggressively for additions and innovations that help us gain new audiences and better serve our current readers," she wrote. "We are creating a 24-hour desk to give our breaking news operation the muscle and velocity it needs to dominate the Chicago news market. ... We will share more details about it in the coming days, but in general it will add a core group of 13 journalists dedicated to providing quick reporting to chicagotribune.com and our other Tribune Company partners in print, on-line and on the air. This group, together with our existing Internet staff, will harness the great resources of the Chicago Tribune's newsroom to produce a steady stream of news and information for our website, making us the undisputed leader for coverage of our metropolitan area and beyond."

A first step, maybe, but an important first step, with many more to come.