Media General Inc., owner of newspapers in Richmond, Charlottesville, Lynchburg, Danville, Bristol and other Virginia cities, has entered into a strategic alliance with Yahoo! and a consortium of other newspaper chains. Media General newspapers will transition their online career sections to Yahoo’s HotJobs platform, with the goal of creating one of the most comprehensive jobs networks in the country. (See press release.)
The move attempts to address the dangerous erosion of employment classified ads, traditionally one of the most profitable revenue sources for daily newspapers. Said Neal F. Fondren, president of the Interactive Media Division: “Our visitors will benefit the Yahoo! state-of-the-art search and targeting features and user-friendly tools. Advertisers can also use contextual, streaming and interactive media to engage job candidates as well as leverage Real Simple Syndication feeds, job search agents, newsletters and a job recommendation engine.”
Clearly, Media General is better off aligning itself with the Yahoo!-led consortium than trying to develop these interactive tools itself. But the move is essentially defensive, an attempt to staunch the hemorrhaging of market share in a former newspaper monopoly. It will be interesting to see if the Yahoo! initiative leads to similar deals to salvage market share in automobile and real estate classified ads.
As memory serves, classified ads generally account for roughly half the profits of the typical daily newspaper. It is essential that newspapers find a way to preserve this revenue stream. If they can’t, they face a very bleak economic future. And the rest of us will face a future with a much-diminished stream of local news.