Another Still-Born Idea From Newspaper Companies (NYT)(GCI)

Four big newspaper companies, including Gannett (NYSE: GCI), The New York Times (NYSE: NYT), the Tribune Company, and Hearst, are setting up a sales operation to market 120 of their newspapers’ online sites. In total, the web properties reach 50 million unique users a month.

An executive involved with running the new venture told Reuters "Each participating company has agreed to dedicate advertising inventory to quadrantOne, so the network can offer customized online campaigns on a highly competitive basis"

What was not promoted in the announcement is that the two most desirable papers owned by the companies, The New York Times and USA Today, will not offer inventory. They have their own large online sales staffs.

The idea is the creation of a desperate industry. Large companies like Gannett have the ability to aggregate inventory from their own papers. The trend in online advertising is clearly not to buy inventory on newspaper sites. Most public chains get 6% or 7% of their revenue from the web. This is not enough to replace the fall-off in print revenue. And, marketers look to large web properties like Google (GOOG), Yahoo! (YHOO), and AOL for the lion’s share of their spending.

These advertisers might buy inventory at from NYTimes.com or USAToday.com, but sorry, they are not part of the package.

Douglas A. McIntyre