Newspaper Networks: What a Tangled Web We Weave

People outside the newspaper business (and even insiders) could be forgiven for finding the recent flurry of online network deals confusing. QuadrantOne's expansion last week highlighted the complexity, as competing newspaper networks sometimes overlap, producing strange bedfellows. But in the end, the governing principle is the same--an increasingly desperate "show me the money!"

Before the arrival of the Internet, the Newspaper National Network provided a model for newspapers cooperating in a national ad network, using a single point of contact to make large-scale buys easier for national advertisers. In 1995, the same logic led Tribune, Gannett and McClatchy to found CareerBuilder, an online network for recruitment classifieds. Newspapers were already losing business to free services like Craigslist, and publishers figured they could make their online classifieds more appealing by scaling them up, offering national reach to both employers and job-seekers.

CareerBuilder welcomed smaller newspapers and other Web publishers as affiliates, but only in exclusive relationships, meaning they couldn't share their classifieds listings with other sites. However, as business models evolved on the Web, and open partnerships became more common, CareerBuilder's seems to be losing some of its appeal for affiliates, according to Ken Doctor, a newspaper analyst with Outsell, Inc.



Doctor explained that some newspapers were lured away by competing networks like Yahoo's HotJobs and, which offer non-exclusive partnerships. The open, hybrid model offered by Yahoo and extends the distribution of newspaper classifieds in the same way, without blocking publishers from peddling their listings elsewhere if they wish. Yahoo's newspaper alliance launched in November 2006.

In the meantime, the network model was spread from online classifieds to display advertising, where newspapers can also benefit by offering advertisers combined national reach. Yahoo's HotJobs newspaper alliance proved to be just the first phase of a three-phase project to build a Newspaper Consortium, in which Yahoo would help newspapers sell display ads and newspapers would share local news with the Web portal.

Here's where the mixing and matching begins. While McClatchy retains its stake in CareerBuilder, and won't share classified listings, it did sign up its papers for the second and third phases of the Yahoo consortium--cooperating with Yahoo in one arena while competing in another.

Of course, with the growth of open partnerships, Yahoo isn't the only player in display ads for newspapers. One platform, Centro, offers some of the same advantages of a network chiefly by aggregating local newspaper Web sites into a single point of purchase for national advertisers. Predictably, many newspapers in the Yahoo consortium also participate in Centro's system.

Now there's QuadrantOne, another national network launched in February. With a similar non-exclusive appeal, there's no reason for newspapers not to join QuadrantOne, which could help them boost display ads. But the proliferation of online networks begs the question: What's the difference?

"Of course they will all tend to overlap and compete against each other," observed Doctor, "and that's really the point, for newspapers." Using yield management measures, Doctor said newspapers should be able to manage their relationships with the networks "to see where they can they fetch a higher CPM, and the best deal in terms of the percentage of revenue."

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