Yahoo partnership could help lift newspapers' Web revenue
DALLAS -- Yahoo Inc. and seven major newspaper companies have formed a partnership to sell online ads and work together on sharing content and creating online products, the parties said Sunday.
The initial part of the partnership, which takes effect immediately, will let local newspapers put their online job listings on Yahoo's HotJobs service, and HotJobs' listings will run on the newspapers' online sites, with the parties sharing revenue from the ad sales.
Longer term, Yahoo and the newspapers have agreed to cooperate on a wide variety of online products, with newspapers contributing their local content to Yahoo, and Yahoo offering its maps, search, Yahoo Local and other Yahoo products to the newspapers' online sites.
The intent is to provide ways for the newspapers and Yahoo to generate additional advertising through their combined efforts.
The deal offers the potential for newspapers to hang on to advertisers and readers at a time when print circulation has declined industrywide and spending on print ads has been falling. For Yahoo, based in Sunnyvale, Calif., the deal opens the door to local content and advertisers the company may not otherwise be able to reach.
Executives from Yahoo and the newspapers, speaking in a conference call with reporters Sunday, did not estimate potential profits from the partnership, although they said it would add to revenues.
"Many, many, many people -- both at your newspapers and others -- have been asking the questions: What will newspapers do to navigate into the new, growing online future?" said MediaNews Group
Inc. chief executive Dean Singleton. "This is certainly the biggest answer we've had to date."
Participating in the partnership are:
MediaNews and Belo entered into relationships with HotJobs for recruiting and employment ads in 2005. The new partnership expands on the agreement those two media companies began with Yahoo and HotJobs.
Robert W. Decherd, Belo chairman, president and chief executive officer, said in an interview that the HotJobs partnership has added "several million dollars" in revenues for Belo since it was first announced Dec. 5.
Decherd said the financial terms for HotJobs and the participating newspapers are spelled out, but the parties still must work through all the details of the additional cooperation with Yahoo.
"For Belo and all the participating companies, this will certainly be accretive" to revenues, he said. "But we should have modest expectations in the first 12 to 18 months, given that so much is yet to be determined about how the product suites and the financial dimension of the partnership play out beyond HotJobs."
However, he said the bigger issue is that there's never been a partnership before in which so many big players have agreed to work together.
"There's been a lot of discussion about it for 20 years and several attempts to bring together a number of companies that represent about this much or more circulation to work with someone on a national advertising platform or a technology venture," Decherd said.
"For whatever reason, it's never come to fruition. Well, here we are. We've got seven important companies agreed on a single partnership form, with the financials agreed on for one important piece of that partnership and a commitment to agree on mutually beneficial financial arrangements for these other products," he said.
Singleton and George Irish, Hearst Newspapers president, said the partnership didn't indicate that newspapers aren't successful in generating employment ads online by themselves.
"We see this just as an opportunity to extend what we're already doing well further," Irish said.
Singleton said MediaNews' online operations were losing money five years ago. "This year, they will contribute 20 percent of total profit. The growth rate online has been humongous in terms of percentages, on a lower base. We see this as a way to speed up that growth, both on the top line and the bottom line."