Yahoo fights a losing battle with newspapers

Though it has announced more members joining its newspaper advertising group, the future of Yahoo's consortium is not looking strong.

The Associated Press reported today that Yahoo has added 17 more participants to its newspaper consortium, bringing the total to about 415 daily publications, and 140 weekly.

All of the new members are owned by the New York Times, with the exception of The Columbus Dispatch, which is privately owned by Wolfe Communications. The New York Times itself though, has not joined the group.

While this sounds like a step forward for the year-old local news ad sharing project, it comes in the wake of wider disarray.

Newspapers are based on an ethic of competition: competition for readers, for stories, and for advertising revenue. This competitive spirit was encouraged to drive papers to spend money on the improvement of content, to produce news most pertinent to its readers, and to keep newsstand prices as low as possible.

In an era when the medium must integrate into the "new media" paradigm, the competition that once drove newspapers to improvement is only driving their integration projects into the ground.

Over ten years ago, Microsoft attempted to harness the entertainment listing and classified ad revenue of local weekly papers with its Sidewalk project. At the time, the quandary was that local papers' content was too region-specific to be seen as valuable for the World Wide Web, and the real value was community level. The papers balked, and Microsoft eventually divested from the project and Sidewalk was absorbed by CitySearch.

By this point, newspaper circulation was already in decline by about one percent per year, and by the turn of the millennium, only 53 percent of American households purchased even a single edition of the newspaper each day.

Last year, faced with an uncertain future, seven major newspaper publishers: Scripps, Belo Corp., MediaNews Group, Hearst, Lee Enterprises, Journal Register Co., and Cox Newspaper, teamed up with Yahoo in a consortium aimed at building Yahoo's HotJobs, and forming mutually beneficial advertising solutions.

But the project has not matured much outside of the HotJobs realm. The opportunity for content sharing and advertisement cross-sales has not quite gelled to the liking of the newspapers. Now, three of the consortium's original members have aligned themselves with Gannett and Tribune -- two of the country's highest circulating newspaper companies -- who have not joined Yahoo's group, and incidentally also own CareerBuilder.

This "all-newspaper" consortium is talking about forming its own online ad network to compete with Yahoo's. It would allow national advertisers to purchase space on all subsidiary Web sites and papers at once, and keep advertising revenue in the family.

Unfortunately, the solidarity of print news groups has always been tenuous, and similar projects ended in dissolution. This disharmony could signify an early end to Yahoo's endeavors.