Yahoo Moves Into Your Backyard

What Everyone Is Talking About

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NEW YORK (AdAge.com) -- The promise of the portals, with their huge reach and massive number of eyeballs, is that their search technology will allow marketers to finally do some serious segmenting of that huge audience, drilling down to just those eyeballs that at that moment are looking to buy what you are selling. But something happened on the way to the drilling. Folks drilled down and realized there was not much there.
The love may not be deep, but it is local.
The love may not be deep, but it is local.

Aggregating and delivering information that was relevant nationwide was easy. Doing the same thing town by town was hard. And since most of the big national advertisers are already spending money online, that growth has slowed. The real opportunity in the next decade for the portals is getting to all those small- to medium-size businesses who want to reach the consumers within driving distance. That's where local newspapers come in.

Newspapers, which were well aware that their strength was in their local content, have been loath to let anyone else in on their turf. When Microsoft tried in the early '90s with Sidewalks, they vociferously rejected any kinds of partnerships with the technology giant. But Yahoo has won them over.

Yahoo this week struck a revenue-sharing deal with a consortium of newspaper chains, including MediaNews Group, Belo, E.W. Scripps, Cox Enterprises, Hearst, Journal Register Co. and Lee Enterprises, that own newspapers in 38 states. Yahoo first and foremost is tapping into the classified-sales force of these newspapers -- building off an existing HotJobs partnership it has with MediaNews and Belo -- in exchange for providing search technology and other content, such as event listings and maps. (Eventually, the newspapers' content, including news stories, reviews and columns, will be tagged and optimized for Yahoo's search engine.)

Yahoo gets partners with deep ties to their markets and long-standing relationships with local advertisers. Yahoo's Frazier Miller, head of its local team, envisions local search eventually being ruled by social media, allowing community members to offer reviews and comments about their experiences with local businesses. But unless you actually have some kind of content about what those local businesses are, it's hard to start getting people to offer opinions about them. With all those private-equity firms sniffing around local-newspaper franchises, Watercooler wonders if they aren't envisioning similar deals with the portals as part of their exit strategies.
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