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Yahoo and newspapers: One good screw deserves another

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Yahoo and a consortium of 176 newspapers from seven chains have agreed to share content, advertising and technology, sayeth The New York Times this week.

Yahoo needed the deal to keep pace with Google, which signed a similar deal with 50 papers. So Yahoo climbs into bed beside an industry with a failed business model that Yahoo, Google, Craigslist, Emily’s List and other database-searchable sites helped kill.

The newspapers needed to find new sources of revenue. So they climb into bed with one of the online marauders that stuck the financial shiv into their business plans.

Reporteth The Times:

But the long-term goal of the alliance with Yahoo, according to one senior executive at a participating newspaper company, is to be able to have the content of these newspapers tagged and optimized for searching and indexing by Yahoo.

In that way, local news — one of the pillars of the newspaper business — would become part of a large information network that would increase usefulness for readers and value to advertisers.

“Now the industry has religion about the Internet, based on what has happened to the business in recent years,” said the executive, who declined to be identified because he was not authorized to speak for his company. “So there is a lot more genuine enthusiasm today.”

Enthusiasm? For what? Both the newspapers and the Yahoos (literally) of the online searchable database world forgot one important concept:

Produce content that people need as well as want. Otherwise, advertisers will go elsewhere for the eyeballs they desire.

Why have Google and Yahoo hooked themselves to an industry that has steadfastly reduced its ability to produce such content? Yahoo wants to tag the content of these newspapers. So what? What is the quality and quantity of content to be tagged?

Wall Street still wants newspapers to be cash cows. Papers have lost advertising revenue to the Yahoos and Googles. Papers have cut staff to make earnings. Small staffs produce less content of quality. They rein in the geographic area of coverage. The number of beats shrinks and they get fewer resources. Diversity of content suffers. The content just becomes less interesting and less meaningful. What advertiser wants to been seen next to one-source shlock?

Back to The Times:

“Newspapers now fully recognize that the Internet is a threat, and this is a way for newspapers to try to preserve their franchise, with a partner that has huge online distribution,” said John Morton, an independent newspaper analyst.

The willingness to work closely with Yahoo, Mr. Morton noted, is in stark contrast to the reception Microsoft got in the 1990s when it started its local Web service, Sidewalk. Microsoft sought the cooperation of local newspapers, but they refused. When Microsoft realized how expensive it would be to develop its own local content, it shut down the venture.

“Local newspapers have always felt that their core strength was their local content, and they have traditionally been very protective of it,” Mr. Morton said. “This reflects a change in that thinking, and the realization that newspapers need to change.”

Mr. Morton is a respected analyst of the newspaper biz … but I think he’s missed the point. Both sides of this alliance are examining only short-term gains in revenue. Without an investment in improving content newspaper by newspaper, this alliance will suffer as newspapers continue to eat their young (their elderly, actually) to maintain profit margins.

Microsoft shut down Sidewalk because it refused to make an investment in developing its own content. What makes Yahoo think that a newspaper industry with declining resources will financially step up to improve its content?

Says a guy I used to think was smarter than this, MediaNews Group’s William Dean Singleton, honcho of one of the groups lying in bed waiting to be screwed again:

“There has been a big question asked for a while as to how newspapers will navigate the online future. I think this is the answer to that question.”

Without more and better content (most folks call it “news”), that navigation will lead to a shipwreck for good journalism on the stockholders’ shoals of short-term gain.

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Written by Dr. Denny Wilkins

November 21, 2006 at 3:39 pm

Posted in Uncategorized

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