McClatchy Drops the Other Shoe

When McClatchy announced the foreign news partnership with Yahoo! I speculated whether this meant that the company was essentially going to abandon it’s relationship with Gannett and Tribune. The WSJ (sub req’d) now confirms that it’s joining the “Amigos” consortium:

In a move that could shift the balance of power in the newspaper industry, McClatchy Co. has abandoned a nascent national online advertising partnership with Tribune Co. and Gannett Co. to join a rival group of publishers that is in the final stages of negotiating a broad deal with Yahoo Inc., according to people familiar with the discussions.

Final agreement on the Yahoo deal, including McClatchy’s involvement, could be announced as early as next week, these people say. The network would establish a common online platform among a large group of newspaper Web sites that would allow an advertiser to easily purchase advertising space across multiple newspaper sites.

McClatchy’s decision means Tribune and Gannett could be isolated from what appears to be a growing industry coalition aimed at creating an online national ad platform with Yahoo. Led by Hearst Corp. and MediaNews Group Inc., the rival group already includes 12 publishers that represent more than 250 newspapers across the country. The group initially struck an agreement last fall with Yahoo’s Hotjobs employment site, but since then has been working on broadening that arrangement. McClatchy owns such papers as the Miami Herald and the Sacramento Bee.

The new deal would require that the newspapers in the consortium use Yahoo search on their Web sites. Yahoo and the newspapers would sell ads on each others’ Web sites, and the revenue would be shared among the partners, according to people familiar with the discussions. Content from the newspapers in the partnership would be featured on Yahoo’s individual channels, such as news and technology.

Many implications:

National advertisers, which have been critical to print newspapers but have largely abandoned newspapers online, would be more inclined to reconsider given the reach of the Yahoo! consortium network. (National advertising in print newspapers was down 5.1% [per the NAA] in 2006.) Ironically Yahoo! has been the recipient of many of those national ad dollars that are migrating online because of the buying efficiency and reach Yahoo! offers.

There are potential implications for Quigo and Centro in this move, Centro in particular. If it were smart the consortium would buy Centro, which facilitates agency and national ad buying across newspapers.

Gannett and Tribune now potentially become isolated and come under pressure themselves to join the consortium. They cannot independently build a national ad network. And “the Amigos” is now the national ad network I spoke about in my predictions for the year:

More newspaper pain but somebody figures “it” out: The print newspaper industry continues to feel the pain of flat-to-declining ad revenues, but online newspapers continue their gains. Newspapers abandon resistance to the mixing of editorial and user-generated content online. And this year somebody in newspapers cracks the code and creates a good user experience that can be emulated across the industry (to some degree). We may also see the emergence of a new, national newspaper ad network.

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Related: The LA Times (reg req’d) on the reach of the Yahoo!-newspaper network.

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3 Responses to “McClatchy Drops the Other Shoe”

  1. Yahoo & Newspapers Extend Relationship : Google DoubleClick Reaction? Says:

    [...] had selling their traditional national advertisers online. As I said in my earlier post about McClatchy leaving “the three” (Gannett, Tribune, McClatchy): National advertisers, which have been [...]

  2. Microsoft Takes CareerBuilder Stake « Screenwerk Says:

    [...] Here’s the release. That means Tribune and Gannett own just over 40% and McClatchy, which recently joined the Yahoo! newspaper consortium has just under 15%. There are probably many reasons for [...]

  3. Microsoft Acquires Stake in CareerBuilder.com Says:

    [...] Here’s the release. That means Tribune and Gannett own just over 40% and McClatchy, which recently joined the Yahoo! newspaper consortium has just under 15%. There are probably a number reasons for [...]

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