Newspapers banking on Internet deals to stay solvent
Even when beleaguered and increasingly broke newspapers, including Denver-based MediaNews Group, Inc., see a light at the end of the tunnel, things just seem to get darker.
Just two months ago, major newspaper publishers, including William Dean Singleton of The Denver Post; George B. Irish, president of Hearst Newspapers, and The New York Times Regional Media Group were riding high on news of a groundbreaking partnership with Yahoo aimed at helping the crippled industry gain more online ad revenue.
Yahoo, which is fast losing the online search battle with rival Google, announced a new ad platform called AMP in February that teams the Internet search company with a consortium of newspaper chains.
The concept: A newspaper ad rep will not only be able to show clients where their advertisement will appear on the newspaper’s Web site but also where it will be seen on Yahoo and other Web-publishing sites.
Newspapers can also guarantee clients, for instance a car dealership, that their ads will appear on other Web sites based on demographic search qualities — or in other words, that they will appear on Yahoo when a person searches for “hybrid cars in Denver.”
With news this month that some of the major newspaper companies, including Singleton’s MediaNews Group, Inc., are in danger of default, much hope in the newspaper industry is riding on the AMP platform.
In fact, AMP is scheduled to roll out first at MercuryNews.com and SFGate.com this fall, papers owned by Singleton’s MediaNews, and then expand throughout 2009 to nearly 40 percent of the nation’s newspaper circulation.
Newspaper publishers are promising Wall Street tens of million in new revenues after AMP is fully implemented.
With a 43 percent increase in online advertising revenue totaling more than $1 billion alone in the first quarter this year, Google is fast becoming the online behemoth that newspapers once were, and Yahoo is struggling to keep up.
So how do newspapers and the new AMP ad platform make out under the new agreement?
Not well, says one industry blog.
Although Yahoo has indicated it will clear between $250 and $400 million annually from the Google agreement, newspaper publishers working under AMP will not see much benefit.
Because publishers agreed to get search-revenue guarantees only from Yahoo as part of the deal penned earlier this year — but not from Google. And, newspaper publishers are still unsure if they will be part of the Google search-ad program at all under their AMP agreement.
How successful the new AMP partnership will be for signed-on newspaper chains including MediaNews, New York Times, Scripps, Media General, Lee and Cox, to name a few, is unknown but many are eagerly watching.
But one guarantee to bank on is that as long as Google continues solidifying its place as the Internet leader for information searches and advertising revenue, newspaper publishers are sure to continue their worry — and conceivably their downhill slide.
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