Study offers surprising numbers on Yahoo-newspaper deal
Cory Bergman September 27th, 2007
It’s rare these days that you see much good news associated with newspapers, but a new report by Deutsche Bank offers some insight on the revenue upside of the Yahoo newspaper consortium. Analysts project that newspapers that have partnered with Yahoo could see a jump in year-over-year online revenue growth by as much as 20 points — going from 20 to 40 percent growth — in the second half of 2008. In fact, they anticipate the news would result in “positively surprising the market.” Deutsche Bank believes the revenue will come from increased inventory, more traffic (projected at +10 percent), better CPMs due to Yahoo’s targeting technology, and the HotJobs affiliation. (Full disclosure: I work for KING5.com, which is a Belo property, and Belo’s newspaper sites are part of the Yahoo newspaper consortium. And thanks Rex for the link!)
3 Comments Add your own
1. Steve Safran | September 27th, 2007 at 10:10 am
OK, on the record here:
1. 20 or even 40 percent growth in online ad revenue is not enough, and I fear execs will see those numbers and jump up and down. 20 percent growth sounds nice, but it’s crap compared to the growth in pureplay advertising and compared to what’s actually out there in local ad money.
2. The Yahoo newspaper consortium is another 1.0 ad play where we’ve seen so many fail before. When you join someone else’s network, they stand to win the most. You do not. The real growth - in the hundreds of percents - is to be had in creating local ad networks.
3. I don’t believe the numbers, and I will happily go on the record again if I am wrong.
2. Rex | September 27th, 2007 at 6:31 pm
Oh, Safran. You’d hate this story if the results were 200% and they were delivered by god.
3. Howard Owens | September 30th, 2007 at 7:29 am
Notice that most of the data comes from Lee’s reports. It also gives numbers only for recruitment advertising.
Lee did not have a robust recruitment platform prior to the Hot Jobs deal, so it had the most to gain. Notice the report doesn’t mention a company like say Scripps, which historically has posted strong recruitment revenue.
Also, recruitment is traditionally the strongest online revenue source for newspapers. It’s the low hanging fruit.
So the entire report is supported by weak data points.
The report also fails to mention the consortium has yet to launch any other vertical or advertising platform. How does Deutsche know these vaporware products will be as successful?
And this part confuses me: “Deutsche Bank analyst Paul Ginocchio and his team, David T. Clark and Matt Chesler, estimate the Yahoo consortium could push newspapers into positive revenue territory a year earlier than originally forecasted. ”
What does that mean? Newspapers already are in positive revenue territory. Very few lose money (if any). And even just looking at online (with the caveat that no newspaper site is making enough money to support the news operation independent of the print product), many, many newspaper.coms are profitable, and substantially so. So, again, what does that line mean?
I’m still very bullish on newspaper.com prospects, but its because of factors that have nothing to do with this report or the consortium.
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