Hundreds of American Newspapers Surrender

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The boon and the bane of Digital Deliverance’s business of consulting about new-media to traditional media companies is that those companies change their chiefs of new-media so often. For example, the newspaper industry is now on perhaps its third set of new-media chiefs since the Internet was opened to the public in 1992.

This turnover in management is a boon to Digital Deliverance because we get hired to teach the new managers not to make the mistakes of their predecessors. But the bane of all this is we’ve had a much longer perspective than these new executives have, and the long view is neither pleasant nor flattering for the American newspaper industry.

For example, 50 American newspapers earlier this month agreed to have Google sell some of their advertising inventories. Those newspapers include The New York Times, The Washington Post, and the Chicago Tribune.

Today, 176 other American newspapers agreed to have Yahoo! sell some of their advertising inventories. These include newspapers owned by MediaNews Group, Hearst, Belo, E. W. Scripps, Journal Register, Lee Enterprises, and Cox Enterprises.

Welcome to the wholesale surrender of major American newspaper companies to the search engines!

The chairmen of many of these newspaper companies are claiming the deals represent victories or advantages for their newspapers. Their claims are hardly true. The deals instead represent their failures during the past ten years.

Reporting Yahoo!’s arrangements with those newspapers, The New York Times today mentioned the effort ten years ago by the New Century Network consortium of the largest American newspaper companies — Advance Publications, Cox Newspapers, Gannett Company, Hearst, Knight-Ridder, The New York Times Company, Times-Mirror, Tribune Company, and The Washington Post Company — to form a common online advertising platform and also a common news search engine that included all their newspapers content and advertising space. But the executives of those companies bickered and failed to work together, and the New Century Network effort collapsed.

Little was done in the nearly ten year interim. Three of those companies (Gannett, Knight Ridder, and Tribune Company) joined forces to create a common online job ads services (Careerbuilder.com); and, along with Belo, McClatchy, and The Washington Post Company, a common online automobile ads service (Cars.com), but those online ventures intentionally excluded many other newspapers companies.

Moreover, almost all American newspaper companies during the past ten years have decried the growing market power of the online search engines. Google and Yahoo! have captured more national online advertising, and almost more local online advertising, than all American newspaper sites combined. American newspapers also worry if the search engines’ news search sites sucks online traffic from their own sites. (In Europe, the World Association of Newspapers is leading an effort to sue or block the search engines from accessing newspapers’ contents without remuneration.)

However, now most of those American companies or their successors have agreed to let Google and Yahoo! sell their newspaper’s online ads. So, much for competiting with those search engines for ten years!

All across America, newspapers are waving the white flag with newsprint.

One thought on “Hundreds of American Newspapers Surrender

  1. My initial reaction to the Yahoo deal was similar, but after a little reflection I don’t think it’s quite that cut and dried… I think the newspapers do want to compete with the search engines. But putting aside top level strategies like creating “… a common online advertising platform and also a common news search engine…” on a practical level they have no idea of where to even begin.

    It’s kind of like someone who just graduated from school and announces his or her intention to succeed as a venture capitalist, but realizes he or she doesn’t have any real business contacts or analytical skills.

    At the same time, the newspapers have other pressing problems to manage as well like taking care of their print businesses – which still make up the bulk of their revenue.

    So they fall back to deals like this one w/ Yahoo where they outsource everything out to someone else b/c it’s easier to do that while they work on higher priority business problems.

    My guess is that the newspapers will start catching up when they start putting people in charge who have real new media / internet backgrounds. Most likely these will be people who come from college newspapers that are doing well like the ones mentioned in this post in techdirt (http://www.techdirt.com/articles/20061120/144121.shtml) or internet “veterans” from the search engines themselves.

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