Yahoo's Partnership with Newspapers

NY Times: 176 Newspapers to Form a Partnership With Yahoo. A consortium of seven newspaper chains representing 176 daily papers across the country is announcing a broad partnership with Yahoo to share content, advertising and technology, another sign that the wary newspaper business is increasingly willing to shake hands with the technology companies they once saw as a threat.

To use an American football analogy, newspapers are starting to behave as though they’re doing the two-minute drill at the end of the game: trying everything in the playbook, and doing it in a hurry. In many ways, it’s about time.

The industry’s hidebound nature has kept it from making common-sense moves. One example was the ill-fated New Century Network, which rose and fell in the 1990s. It a vague attempt to think about a business model in the Internet Age. The network, which could have been useful, suffered from the publishers’ mutual inability to cooperate in a serious way. The NCN was a dud, but what’s amazing is how powerful it might have been had the publishers recognized the challenges they dismissed at the time were only delayed, not forestalled.

For Yahoo, this deal a no-brainer. It gives the company some good news as Google relentlessly carves away advertising market share not just from traditional media but also from its rival online companies. Microsoft, meanwhile, keeps threatening to be a more serious player, and no one should write off the monopolist’s moves into new arenas, even though many don’t work out so well.

Yahoo has also been a leader in the — ugh, I hate this expression — user-generated content space. It has plenty it could teach the newspapers in this regard, if the papers care to listen. (The papers can teach Yahoo a thing or two as well, including how damaging it can be to a journalistic brand when a company kow-tows to government — something the American papers did so shamelessly in the run-up to the Iraq War and Yahoo has done with its Chinese operations.)

This won’t be the only move the newspapers make to take the digital world as seriously as they must. They’ll have to try lots of ideas, acting like companies facing massive secular change, which they are.

I still don’t see how they can bring a monopoly business model successfully into an age where not only is the monopoly disappearing but the competition is most seriously from companies that want to take only the revenues and leave the journalism to someone else. Yahoo’s news portal strategy has been pretty simple: aggregate, aggregate, aggregate. It’s worked.

(Note: I’m teaching a class with Bill Gannon, editorial director at Yahoo, and I own shares in several newspaper companies.)