INTERACTIVE: PUBLISHERS MORPHING INTO DE FACTO WEB DEVELOPERS: INCREASED SALES, CASH FLOW LURE SITES TO CREATE ADS FOR CLIENTS

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For most online newspapers, creating their own Web sites is just the beginning. To get advertisers to sign on, the papers are also becoming de facto Web developers.

"Clients are used to getting that service," said Linda Nelson, VP of new media at Stern Publishing, which owns The Village Voice, L.A. Weekly and other alternative papers."It's enhancing our sales ability."

SEPARATE UNIT HANDLES

New Jersey Online (www.nj.com), a unit of Advance Publications, formed a separate unit called Journal Square Interactive to handle Internet development.

The Boston Phoenix, an alternative newspaper, has built sponsorships or banner ads for half its online advertising clients.

"It's an offer that's so cheap that it's hard [for advertisers] to pass up," said Mark Herrmann, director of interactive marketing for Phoenix Media Communications Group, which runs the Boston Phoenix's Web site (www. bostonphoenix.com).

Journal Square represents a big proportion of New Jersey Online's earnings, Mr. Levitan said, adding that the company only handles jobs that cost $5,000 and up.

IMMEDIATE CASH FLOW

"I make a higher margin in advertising, but there's a potential for an immediate cash flow in developing Web sites," he said.

Especially profitable are the major marketer sites that Journal Square has helped produce, including a Visa International-sponsored promotion for the Triple Crown, a Nabisco mini-site that focuses on snacking and a marketing site for a division of Simon & Schuster.

Most local media aren't developing national brand sites, however. Far more common are ads for local retailers, such as a micro-site for the local bistro Sonsie, which Phoenix media built. While Phoenix makes a small profit from creating the sites, it's a fraction of what it makes selling print or radio space, Mr. Herrmann said.

"Because we're more in the process of educating people, we don't want price to be a barrier," he said.

Phoenix charges advertisers $250 to set up and create a six-page site. After that, advertisers pay $150 per month for 10,000 impressions. They can pay for more impressions at $15 per thousand.

Local online company CitySearch, which has formed alliances with TV stations and newspapers around the country, has built this friendly gateway attitude into its pricing plan. With a staff of 460, the company claims to have built more than 10,000 ads (mini-sites between six and 10 pages) for free.

CHARGES $30-$50 A MONTH

CitySearch (www.citysearch.com) charges between $30 and $100 per month to post ads on one of its sites in cities including New York and San Francisco.

The policy has lured everyone from hot dog chains to regional bank NationsBank onto the Web.

"We want our readers to know our opinions are genuine and not purchased by an advertiser," she said.

Despite the potential for blurred editorial lines, local media outlets are in the ad business for the long haul. In many cases, they rival ad agencies for business.

Quipped Mr. Levitan: "As long as we're getting jobs from Visa and Nabisco, we'll

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