Internet & Technology
Yahoo (YHOO) sees green in black-and-white newsprint.
The Web’s most-visited portal hopes to get a bigger share of the online ad market by launching a program in which it will share content and online ad revenue with more than 200 U.S. newspapers.
Yahoo on Monday unveiled an expansion of a program it launched in November. That program was limited to newspapers placing their job listings on Yahoo HotJobs, its online employment site.
Now, Yahoo and the papers will sell and share search and display ads that will be posted on newspaper sites and Yahoo network sites.
Yahoo announced its expanded newspaper program just three days after chief rival Google (GOOG) expanded its role in the online ad market by saying it would buy ad marketer DoubleClick and one day after Google announced an ad pact with major radio station owner Clear Channel Communications.(CCU)
A Deal A Day
“The pace with which these deals are getting done is unprecedented,” said Greg Sterling, president of research firm Sterling Market Intelligence. “Companies are bulking up.”
The scrambling by Yahoo, Google and others for the online ad market amounts to a latter-day gold rush, says Kathy Sharpe, chief executive of Sharpe Partners, an online marketing agency.
“It’s a land grab,” she said. “The big question is whether any of this land is going to be worth anything five years from now.”
Yahoo says 12 newspaper companies have signed up for its consortium. Those companies, which include McClatchy, (MNI) own 264 newspapers in 44 states. Yahoo launched its newspaper program in November with 176 newspapers owned by seven companies.
Yahoo will sell display and search ads to its advertisers that want their ads on various newspaper Web sites. In turn, newspaper sales teams can give their advertisers the option of appearing on Yahoo sites.
The idea is to give local advertisers a one-stop shop for online and offline ads, Hillary Schneider, Yahoo’s executive vice president of local markets and commerce, said in a conference call Monday.
Big Growth Forecast
“With the newspapers’ sales forces’ ability to sell print and online solutions, we create a unique value proposition for local advertisers,” Schneider said.
Newspapers have been losing ad dollars to the Web and scrambling to find ways to make money online.
Local online ad revenue in the U.S. is expected to rise to $12.4 billion in 2010 from $3.5 billion last year, Gary Pruitt, CEO of McClatchy, said during Monday’s call.
“We have been looking for some time for a way to extend our newspapers’ strength through an online ad network, and it’s clear to us that the consortium . . . represents an extraordinary opportunity,” he said.
Because Yahoo attracts so many visitors, it can drive much-needed traffic to newspaper sites, Sterling says. “It gives newspapers a way to recapture ad dollars that have been leaving them,” he said.
Newspapers also will provide Yahoo with more of their local news. Users who click on a headline on Yahoo News will read the story on the newspaper’s Web site.
“That’s very smart on the part of the newspapers,” Sharpe said. “You are potentially going to bring more eyeballs to your Web site.”
