In a Reuters story last week, Robert MacMillan makes an argument that the wave of alliances negotiated in the past few years between online job boards and daily newspapers, and especially between Yahoo! and a consortium of roughly 400 dailies, have not yet proven themselves one way or the other. While the cross-selling arrangement has helped the dailies gain some traffic to their sites, the economics are tough to evaluate given how little is known publicly about specific terms of the deal. As the article also points out, much of the program’s ultimate success depends upon Yahoo’s development of technology to sell display ads across the network. We’ll see.
Given the continuing deterioration of classified ad revenue among the dailies, it’s certainly clear at this point that the alliance has done nothing in the short-term to alleviate the erosion of daily newspaper market share in the classified ad space. And I’d still argue that it won’t help in the long run either. In fact, I think the alliances are most likely exacerbating the problems dailies are facing. From the perspective of the dailies, these partnerships were flawed from the beginning – far too heavily skewed in favor of the online partners. When the first major U.S. city loses its daily newspaper, I’ll bet anyone that it’s a daily that had joined one of these consortiums.