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Issue #105: Newspaper Woes

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             "Understanding Internet Search Technology"
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November 09, 2006                         SearchReturn Issue #105
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                   .....IN THIS DIGEST.....

// -- ESSENTIAL NEWS -- //
            "Newspaper Woes"

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// -- ESSENTIAL NEWS -- //

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==> Newspaper Woes

http://www.nytimes.com/2006/11/06/business/media/06google.html

Essentials: More than 50 newspapers signed up to allow Google to
start selling ad space in print.  The announcement came Monday
just as the Tribune Company had a LA Times executive resign
rather than begin cutbacks involving employees.  This news comes
at a difficult time for major newspapers that have seen a sharp
decline in advertising revenue in face of increasing competition
from the online channel that the Google advertising platform
exemplifies.

The deal allows the bidding structure to hold auctions for space
but with restrictions where the paper can specify a minimum cost
and retain editorial rights to reject inappropriate advertising
sales.  During this test, Google will not collect any revenue in
the transactions so that it can test and hone in on developing a
working model for advertising sales where it intends to collect
a revenue share starting next year.

This deal represents a terrible turn for newspapers showing their
weakness against stiff competition for advertising dollars given
the lively online marketing channel.  Major advertisers will
build relationships with distribution for print through Google
rather than seeking newspaper representatives for the media buy.
The ultimate result will likely be more erosion of newspaper
profits albeit slowed by the opportunity to collect through
Google and initially reach a new set of small advertisers.

 
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