Newspapers have been hit by so many arrows that it is a miracle that they are still standing. As internet ads have taken away much of their revenue and costs of printing and transportation have moved higher, margins at daily newspapers are disappearing.
While national and local ads at many papers are off 10% or better this year, it is the classified business that is really hurt. Some of the largest newspaper have lost 20% to 30% of their classified ad revenue this year. Most of this comes from the damaged real estate, auto, and job sectors.
One of the great enemies of the industry has been Craigslist, the huge online classified website. Now, Wal-Mart (WMT) is joining the phalanx set against newspapers.
According to The Wall Street Journal, "Walmart.com Classifieds claims a reach of more than five million consumers each month through a network of sites, including newspapers, portals such as Lycos and online communities such as Military.com." And, it is giving the ads away for free.
Wal-Mart’s theory seems to be that giving classifieds to its customer will improve their loyalty to the world’s largest retailer. That may be true. It makes sense.
But, over at the local newspaper, another piece just got torn out of its heart.
Douglas A. McIntyre
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