The Yahoo! Consortium: Another View
In this article Terry Heaton reviews the Yahoo! Consortium, a partnership between the online giant and nearly 400 daily newspapers, and draws some noteworthy conclusions about who is getting the best of the deal. Are newspapers doing all the work while Yahoo! extends its reach into their markets? Here's a summary of the analysis form the article:
"Let's look at this first from Yahoo!'s perspective. They get:
- to expand their classifieds (hotjobs.com) to 400 new sites.
- "feet on the street" in all these markets to sell inventory at a premium that is now just remnant or not sold at all.
- to move their paid search to the most popular information sites in most markets.
- to expand their reach for national advertisers by 400 sites.
- local content to beef up their local offerings.
- to sell local advertising in the midst of other people's local content.
- to market a mobile application that includes local.
"While revenues are shared, this is still "found money" for Yahoo!, who has to do nothing except manage the technology. The labor is all provided by the newspaper companies, who are providing Yahoo! with an enormous sales force. One assumes that, sooner or later, the business cards of this sales force will bear the Yahoo! brand.
"So now, let's see what the newspapers get:
- association with the Yahoo! brand.
- increased traffic to their websites, potentially even local eyeballs.
- the potential to serve ads to more local web users via Yahoo! properties and pages.
- a share of the revenue gained by Yahoo! in the deal.
- unified search and classifieds platforms.
"I don't mean to suggest that any of these gains are insignificant. I just believe that if you weigh each side, Yahoo! comes out on top. The question is will the consortium members' share of the revenue split be sufficient to create a positive ROI for them? Sales labor is labor, and that is an expense. There may be upfront labor costs for Yahoo!, but the ongoing expense is with the newspapers."
Heaton offers several possibilities beyond Yahoo! that newspapers should also consider. Here's one that is particularly thought provoking:
"The real nut of Media 2.0 for local media companies is the enabling of commerce, not the serving of advertising ..."
Read complete article ...
"Let's look at this first from Yahoo!'s perspective. They get:
- to expand their classifieds (hotjobs.com) to 400 new sites.
- "feet on the street" in all these markets to sell inventory at a premium that is now just remnant or not sold at all.
- to move their paid search to the most popular information sites in most markets.
- to expand their reach for national advertisers by 400 sites.
- local content to beef up their local offerings.
- to sell local advertising in the midst of other people's local content.
- to market a mobile application that includes local.
"While revenues are shared, this is still "found money" for Yahoo!, who has to do nothing except manage the technology. The labor is all provided by the newspaper companies, who are providing Yahoo! with an enormous sales force. One assumes that, sooner or later, the business cards of this sales force will bear the Yahoo! brand.
"So now, let's see what the newspapers get:
- association with the Yahoo! brand.
- increased traffic to their websites, potentially even local eyeballs.
- the potential to serve ads to more local web users via Yahoo! properties and pages.
- a share of the revenue gained by Yahoo! in the deal.
- unified search and classifieds platforms.
"I don't mean to suggest that any of these gains are insignificant. I just believe that if you weigh each side, Yahoo! comes out on top. The question is will the consortium members' share of the revenue split be sufficient to create a positive ROI for them? Sales labor is labor, and that is an expense. There may be upfront labor costs for Yahoo!, but the ongoing expense is with the newspapers."
Heaton offers several possibilities beyond Yahoo! that newspapers should also consider. Here's one that is particularly thought provoking:
"The real nut of Media 2.0 for local media companies is the enabling of commerce, not the serving of advertising ..."
Read complete article ...
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