Major Newspaper Chains in Talks to Form Web Network

Report: Gannett, Tribune, McClatchy to Offer National Online Display Ads

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NEW YORK (AdAge.com) -- The nation's three biggest newspaper firms have a project "in the works" to jointly sell advertising on their vast array of websites, according to a report in The Wall Street Journal today.
Newspaper titans Gannett, Tribune and McClatchy are developing a plan to jointly sell online ad inventory.
Newspaper titans Gannett, Tribune and McClatchy are developing a plan to jointly sell online ad inventory.

Good news for buyers
Under the plan, Gannett Co., Tribune Co. and McClatchy Co. are expected to each contribute 10% of their advertising space to the "Open Network," which should delight media buyers and planners who have long complained that newspapers -- despite their largely unrivaled local-market penetration -- lack a true national online network and are too difficult to buy in bulk due to the idiosyncrasies of individual newspapers and publishers.

Those difficulties have generally sent potential national newspaper-website advertisers to advertising portals such as Yahoo, Google and America Online, or to other media, such as magazines and TV.

The paper said the talks -- confirmed to the Journal by a Gannett executive -- are still in progress and might not come to fruition.

Another partnership forming
A major obstacle to the partnership could come from a group of smaller but still formidable publishers who have teamed up with Yahoo in a deal to develop their own online sales network. That group includes Hearst Newspapers, MediaNews Group, E.W. Scripps Co., Lee Enterprises, Belo Corp., Cox Newspapers, Morris Communications, and Journal Register Co. That partnership, the Journal reported, is expected to require the newspapers in the consortium to use Yahoo search on their individual newspaper sites, with the papers and the portal sharing the revenue.

Those companies first linked up with Yahoo as an alternative to CareerBuilder -- jointly owned by Gannett, Tribune and McClatchy. CareerBuilder, the No. 1 online job-ads site, has raised the cut of revenue it requires from participating papers and has been reluctant to let other newspaper chains acquire equity stakes, the Journal reported. Several privately owned papers, including the Philadelphia Inquirer, Akron Beacon Journal and St. Petersburg Times have defected from CareerBuilder to rival jobs site Monster.

The two rival consortiums threaten to split the industry's potential clout as advertisers are eyeing a broad national buy of sites with local-market dominance. However, the pressure on newspapers to act is undeniable. As their print circulations continue to fall, they find themselves under increasing pressure to wring increased value from an online readership that is expanding.

PricewaterhouseCooper has reported that internet ad revenue rose by 35% in the first nine months of last year, to $12.1 billion. Local-newspaper advertising fell 4%, to $17.5 billion during that period, according to TNS data.
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