Publishers fight for local dollars in online space

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New online competition for local advertising dollars has pushed newspaper owners in the past year from hesitantly going online to aggressively pursuing a range of options.

"Newspapers all understand the threat and the need to get out ahead of it," said Howard Witt, Chicago Tribune, associate managing editor for interactive news.


Tribune Co. is part owner with America Online in Digital City, a network of local newspaper sites; has its own site and is one of nine newspaper publishing owners of New Century Networks. The Tribune is also working on a joint venture with the Los Angeles Times and The Washington Post to create a site called, which will launch in the next three months, as well as a realty site.

Mr. Witt notes that Microsoft Corp. CEO Bill Gates is going after local advertising dollars with Microsoft's CarPoint automotive classified ad site, and may be looking into a real estate site as well. "That he is looking to take away classified ads from newspapers is of real deep concern, and that is what is keeping newspaper publishers up at night," said Mr. Witt.

However, the threat of local advertising losses so far remains just a threat. Microsoft launched a local Sidewalk service earlier this year, but with only eight cities online, it's still in the initial stages of gaining advertising share. Newspaper ventures--including Digital City; the month-old Real Cities from Knight Ridder New Media, Cox Interactive Media's new CIMnet network of city sites; and New Century Networks' network of 130 nationwide newspapers --are also starting to sign up advertisers.


Jupiter Communications, New York, predicts that classified ad sales on the Web will grow from $123 million this year to almost $2 billion by the year 2002 and will then account for 10% of the expected overall classified market.

One online network that many of the top publishers are involved in also seems to inspire the least enthusiasm. New Century Network's Newsworks, launched in July, is a consortium of newspaper owners including Advance Publications, The New York Times Co., Hearst Corp., Cox Newspapers, Gannett Co., Tribune Co., Times-Mirror Inc., Knight-Ridder and The Washington Post Co.

Most of the member companies would not comment about NCN. However, the New York Times has reportedly said it will not give any more funding to the project and others may follow. Newsworks Editor in Chief John Papanek left to become editor of ESPN Magazine. Chris Vail, VP-executive producer, has taken over Mr. Papanek's duties.

NCN CEO Lee deBoer would not comment on the owners' involvement in the private company, but said all the original owners are still in the partnership.

"We anticipate it will stay that way," he said. "There will be some shifting over time as in any company. Some people will buy a bigger percentage and some less."

Copyright November 1997, Crain Communications Inc.

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