The decision is one of the first major changes at Tribune Co.'s flagship newspaper since the company was taken private by real-estate billionaire Sam Zell. It also reflects the ongoing transition in classifieds. Over the last decade, classified listings--which at one time accounted for one-third to a half of all newspaper revenues--have migrated to Web sites that offer greater volume, interactivity, and search functions.
In the first three quarters of 2007, total newspaper classified revenues fell 13.2%, 16.4%, and 17%, according to the Newspaper Association of America. The Tribune Co., publisher of The Chicago Tribune and the Los Angeles Times among others, is certainly feeling the heat. In the third quarter of 2007 (the last for which data is available), classified revenue tumbled 18% compared to the same period in 2006.
With demand for print classifieds waning, newspaper companies may now be able to achieve substantial cost savings by scaling back or axing them altogether. That's especially true in light of a recent note Deutsche Bank to investors predicting that newsprint prices will rise 20% in 2008, compared to 2007, negatively affecting the earnings of most major newspaper companies.
As their print classifieds business collapses, newspapers are struggling to rebuild this profit center online, contending with sites like Craigslist and other local list services. One strategy is to affiliate with other newspaper owners in networks like CareerBuilder that share classified listings.
Many newspapers are also entering into hybrid partnerships with online properties like Monster, Yahoo's HotJobs (part of Yahoo's newspaper consortium) and Zillow for real estate.