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Yahoo and Newspaper Consortium up the stakes

In  a conference call yesterday, Yahoo and the so called “Newspaper Consortium,” which was formed in November, and  includes more than 250 newspapers across 44 states including the holdings of large publishers like McClatchy and Media News, announced an expansion of their advertising joint venture. (Notably absent from the Consortium are Gannet and Tribune (the two heavyweights). They have been reported to be developing their own Ad Network. McClatchy was going to be part of that effort but switched course to work with Yahoo)

Initially the papers represented in the Consortium and Yahoo worked together in a partnership for job related advertising with Yahoo’s Hot-Jobs property.  Now, in a second part of what has been described as a three part deal, the two will focus on broader, and more lucrative, joint advertising.

Under the terms of the deal, both Yahoo and the papers will sell online advertising.  Merchants looking to buy ads will be given the option of buying both print ads from the papers or online ads.  In local markets, these options will be managed by the Paper’s local ad sales department. Yahoo will serve the ads to the papers websites. The papers will install and use Yahoo’s search technologies and Yahoo will treat the consortium members as preferred news providers across the local news channels of its network.

The deal is a boon for Yahoo’s Panama Ad network which was launched to high expectations in February.  It is also a proactive stop-gap effort on the part of the papers who have been seeing consistent drops in their print-ad revenue. According to numbers released in March by the Newspaper Association of America: Print Advertising revenue for 2006 (including classified, jobs, automotive etc) was down 1.7% to $46.6b.  Especially disturbing for the industry was an acceleration in the decline from quarter to quarter as compared to the prior year. (Q4 – down 3.7%, Q3 down 2.6%, Q2 down .2%)

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