Newspapers, Yahoo Reveal More About New Partnership

By: Jennifer Saba Call it the New Deal. Executives from newspaper companies and Yahoo shed more light on what William Dean Singleton, CEO of MediaNews Group, called a "transformational" partnership during a conference call this afternoon.

Earlier this morning, Yahoo and a group of seven newspaper companies formed a strategic alliance to share advertising revenue, an arrangement that has been baking for about a year.

Susan Decker, executive vice president and CFO of Yahoo, would not disclose the terms of the "multi-year" commitment but conceded that a number of the elements involved are exclusive.

While help wanted plays an important part in the partnership -- sales reps from newspapers and Yahoo's HotJobs will be able to cross-sell ads -- it's only one aspect. The deal, which includes 150 newspapers, also involves revenue share opportunities for search and graphical functions.

"Our choice of Yahoo was pretty simple -- it's the most trafficked online site in the world," said Singleton during the conference call. "It's also a content company that understands [the] platform and technology. ... Some of us looked at joining CareerBuilder but that's just strictly a career site and that's where it stops. With Yahoo, it opens up many doors we need to have open to us."

Executives outlined broadly how newspapers and Yahoo could benefit from one another -- though the specifics of the search and graphical functions have yet to be hashed out.

As for now, there is no plan that the partnership will adopt Google's most recent strategy of selling print advertising at 50 newspapers. "That has not been discussed at this point," Singleton said.

However, there is a "very real possibility" that the newspapers involved in this deal could use Yahoo's technology for purchasing online ads, Singleton said.

This deal will not shut out Google from linking to newspapers stories. "I don't see that changing," Singleton said. But the group will be committed to working with Yahoo first.

The newspaper companies involved in this partnership expect and encourage others to join the group. The current focus of participation is for newspaper companies interested in all components of the deal, Eric Grilly, president of MediaNews Group Interactive, told E&P. There could be an opportunity down the road for newspaper companies already involved with other recruitment sites, like CareerBuilder, to join the group in some capacity.

There is some worry that today's announcement may further fracture the industry. In a note released by Merrill Lynch, analysts Lauren Rich Fine and Justin Post raised that question: "We also wonder if the Yahoo partnerships splinters the newspaper industry, precluding newspapers from forming a national, industry-wide consortium and migrating onto common platforms."

The analysts are "mixed" about the future implications for the newspaper industry but "ultimately believe this is a worthwhile experiment."

Singleton made it clear this was a necessary step during the call: "While we are very proud of the progress we have made so far, we think the world is changing very rapidly and we think we need a partner who is a leader in this business to help us get there."