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Belo: Yahoo Consortium Alone Can’t Save Newspapers

While the addition of McClatchy and three other major newspaper groups to Yahoo’s newspaper consortium is a welcome shot in the arm to the growing alliance, even those involved are saying that it’s a temporary fix to an ongoing problem.

Newspapers, long suffering from falling circulations - as readers migrate to the internet - and from decreasing ad revenue, are looking to the Yahoo alliance to help them sell ads to national advertisers and boost ad revenue for their websites, writes the San Francisco Chronicle. But in and of itself, the alliance is not enough to “save” newspapers, says Wes Jackson, president of the interactive division of Belo Corp, one of the chains that helped put together the Yahoo deal.

“We wouldn’t be doing this deal if there weren’t meaningful economics,” he says. He adds, “I don’t necessarily say this is a savior play for the newspaper industry. I say this is an incredibly powerful play for our newspaper websites.”

Colby Atwood, president of media research and consulting firm Borrell Associates, pointed out that while advertising dollars are steadily migrating from old media to the web, local advertising still only accounts for about 28 percent of online advertising (vs. about half of total ad spending).

The difference, he says, can be explained by the fact that many local firms don’t understand how to use or buy online ads. That’s where newspapers believe they fit in: their local sales teams and relationships can bring businesses online rather than let some upstart do it.

Media General Inc., Morris Communications and Paddock Publications are the three other newspaper publishers that Yahoo announced had joined the consortium yesterday.