Why Yahoo needs newspapers

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The promise of web portals, with their huge reach, is that their search technology will allow marketers to finally do some serious segmenting of the giant internet audience, drilling down to just those eyeballs that at that moment are looking to buy a certain product. But something happened on the way to the drilling. Folks drilled down and realized there was not much there.

Aggregating and delivering information that was relevant nationwide was easy. Doing the same thing town by town has proved to be hard. But difficult as that task may be, the real opportunity in the next decade for the portals is getting to all those small to medium-size businesses who want to reach consumers within driving distance. That's where local newspapers come in.

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

Yahoo this week struck a revenue-sharing deal with a consortium of publishers-including MediaNews Group, Belo and Hearst-that own newspapers in 38 states. Yahoo first and foremost will tap into the classified sales forces of these newspapers, and in exchange, the web giant will provide search technology and other content, such as local 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 also 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.
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