Alan Mutter offers a provocative post on how Yahoo! may challenge local newspapers, who are some of the site’s primary partners:
Yahoo appears to be getting ready to produce local websites filled with original content that could compete with newspapers, posing a particular challenge to the hundreds of publishers who now sell advertising for the powerful portal.
The apparent intention to target the sweet spot for publishers was signaled last month when Yahoo announced plans to buy Associated Content for $100-ish million to gain access to some 380,000 individuals who are willing to write articles, take pictures and produce videos for rates starting at $2 per effort. The deal is scheduled to close later this year.
Insiders here in Silicon Valley say the odds are strong that a good number of those content producers will be deployed to cover local news in the hope of assembling ever-larger audiences for the premium-priced advertising that Yahoo sells via the rich user database it has amassed over the years.
No doubt some of the Associated Content writers (now indirectly beholden to Yahoo!) will cover local markets as Mutter suggests. However if Yahoo does something like MSN Local it won’t necessarily be an affront to newspapers. It could also provide newspapers with some additional distribution.
Yahoo! is unlikely to do something that would self-consciously compete with its newspaper partners. But it is true that if the company does a great job with local content sites online newspapers could suffer as a practical matter. Yahoo! has many more content and engineering assets than newspapers and has the capacity to produce sites or subdomains that are more user-friendly and utilitarian than most newspapers.
I could imagine a local content area that combines some of Yahoo! Local, with news, maps (from Nokia/Navteq) and content from other places on Yahoo! and third party sites.