The Ups and Downs of Newspaper Sites on the Internet

By: Steve Outing

The newspaper industry worldwide continues to develop new Web sites at a fast clip, now numbering more than 3,600. There are expected to be 4,000 newspaper sites by the end of 1997, according to new statistics released by the research firm Newslink Associates.

But, "there are signs that the boom may be coming to an end," according to Newslink's managing partner, Eric Meyer, who tracks Web site activity by news media organizations worldwide. He's found an increasing number of small and medium size newspaper sites that have either shut down their sites entirely, or left them online but without any content being updated for several months. Meyer and his research team found 121 newspaper Web sites that appear to have been abandoned.

There are some interesting tidbits in the Newslink research:

43% of online newspapers are now based outside the U.S. That figure was only 29% one year ago. There are 2,059 papers online in the U.S. and 1,563 elsewhere in the world. U.S. dominance in newspaper online publishing is steadily dwindling. The most rapid growth is seen in the U.K., Canada, Norway, Brazil and Germany. The U.K. has 294 online papers; Canada has 230. Most of the growth in U.S. newspapers on the Web is coming from non-dailies. 700 U.S. community weeklies now publish online, compared to 152 one year ago. The U.S. states with the most online newspapers are Illinois (173), California (146), and Pennsylvania (100). Texas is the state with the most daily newspapers online (34), followed by California (33), and Pennsylvania (32). The growth in newspaper sites is no doubt impressive. When I wrote the 1995 Online Newspaper Report (Jupiter Communications), there were fewer than 100 newspapers worldwide. Back then, many publishers were eager to give the Internet a try, but they worried about how to develop a profitable business model. Today, that continues to be the major concern, according to Meyer.

The money problem

He says that only about one-third of online newspaper operations report being profitable today -- an estimate borne out by Newslink's research and that of others. Meyer spent much time this summer speaking before state press associations in the U.S., "and I have yet to have had anyone come up to me and say that they are making (a significant amount) of money."

Those papers that are profitable with their online operations, particularly among medium size and small publishers, are succeeding via selling Web site design to local businesses and/or doing a forced upsell on classified advertising. (That is, raising overall classifieds rates and allotting the increase to the online division in exchange for the ads running online.)

Meyer questions the profitability of the classifieds strategy, because many publishers have told him that they had wanted to raise classifieds rates anyway; the Internet gave them an excuse for a rate hike that might have happened even if the Web wasn't in existence.

Among small papers, online community guide pages are ubiquitous, Meyer says, as publishers adopt a defensive posture to block online entrepreneurs who are setting up their own community pages -- and asking local businesses to advertise on the Internet for a modest fee. Such competitors are "nickel and diming" small newspapers, he says, because the local bank that pays $25 or $50 to place an online ad then has that much less to purchase newspaper advertising.

Meyer believes that for smaller newspapers -- who perhaps are struggling the most with the whole idea of doing business on the Internet -- the distant reader is the biggest plus for them. Most papers have potential readers who have moved away yet still want hometown news. It's here that small papers can learn to eke out a small profit online -- by serving these distant readers online rather than going to the expense of mailing them print editions of the newspaper.

Some small papers are succeeding by selling low-cost online subscriptions to these former residents. Meyer cites a paper in Canada that is making a modest profit simply by requesting that users of the service voluntarily send in money to keep its Web site going.

Disturbing trend

The number of small and medium newspaper sites shut down does worry Meyer. He surmises that many were Web sites set up by an outside consultant or company, who did the set-up work and then left the day to day operation to the newspaper staff -- who either were unenthusiastic, not well trained, or too overworked to do a good job. Thus, the sites died for lack of interest.

Meyer sees this as a disturbing trend among small newspapers, where they go to considerable expense to set up a Web site, subsequently don't put much effort into it, then complain that they can't make money on the Web. "But if you don't do it well enough to succeed, why even bother?" he says.

Publishers who should be most concerned about succeeding on the Web are medium size papers in "second-tier" cities like St. Louis, Kansas City and Denver, says Meyer. Papers in such areas tend to serve multiple communities, and thus don't have the advantage of providing the "local, local, local" information that people want. It will be the large and the small papers that stand the best chance of making a profit online, he says.

Meyer expects more newspapers to create new Web sites than existing sites that will be shut down. Most of the growth in the U.S. will continue to be among smaller newspapers, since nearly all major American dailies are online by now. Outside the U.S., there remain some regions where large newspapers have yet to launch a Web presence, so the rest of the world's newspaper publishers will continue to make gains on their American counterparts.

Contact: Eric Meyer,

Mercury Mail ... No, InfoBeat

The personalized news e-mail company known as Mercury Mail this week changed its name to InfoBeat. When known as Mercury Mail, the Denver-based company was involved in a name dispute with the San Jose Mercury News and its Mercury Center online service. The Mercury News felt that the name Mercury Mail was confusing and filed a lawsuit last year demanding that the e-mail company change its name. The dispute was settled out of court, and Mercury Mail began attaching wording to all e-mail delivered to its customers saying that Mercury Mail had no affiliation with Mercury Center.

Chairman John Funk says the Mercury Center lawsuit played a factor in the name change, but the company changed its name primarily as a means to create a stronger, single brand, and eliminate consumer confusion about what the company does.

The company was founded by Funk in 1995, and delivers 3 million personalized e-mail messages per day to 1.4 million subscribers, according to the company. It also serves as an e-mail service bureau (or hosting service) for publishers such as Ziff-Davis, Tribune Media Services and PR Newswire.

Contact: John Funk,

European diversity

Piotr Aleksandrowicz of the Polish daily newspaper Rzeczpospolita wrote in to make sure that my column item about Italian and French news Web sites shutting down "for the summer holiday" was not interpreted as suggesting that all European news sites engage in such practices. He writes:

"France and Italy is not the whole Europe. Our site is operating during holiday season having a crew of four full-time employees. Rzeczpospolita is a leading Polish daily quality newspaper with a circulation of around 220,000 copies and approximately 1,500-2,500 visitors per day at the online edition."


In my last column, I stated that Los Angeles Times editorial director for new media Leah Gentry also oversees the marketing and advertising components of the newspaper's online operation. She does not.

Disclaimer: My consulting and research company, Planetary News, has in the past done work for Mercury Mail (now InfoBeat), the subject of a column item above. I think it is important to disclose such relationships when reporting on a particular company.


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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company


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