Online Newspaper Ads Face Dim Future
Sarah Ellison and Suzanne Vranica earlier wrote an article for The Wall Street Journal titled Papers' Web Hopes Dim a Bit. She said, "Even with all the grim news the newspaper industry has faced in recent years, publishers have consoled themselves that they have a lifeline. If they could switch content away from print and onto the Internet — bringing advertisers with them — they could save their businesses.
Ellison added, "Last week, that lifeline began looking frayed. New York Times Co. warned Thursday that online advertising growth this year won't be as strong as the 30% it had projected. On the same day, Tribune Co. reported that the growth rate for first-quarter interactive revenue was sharply lower than a year earlier. gannett Co. likewise…"
Separately, New York Times Co. warned Thursday that online advertising growth for 2007 won't be as strong as the 30% it had projected. Tribune Co. also reported on that same day that the growth rate for first-quarter interactive revenue was harshly lesser than that of 2006. Gannett Co. also said online revenue growth became sluggish in the first quarter from a year earlier.
One key issue for many newspapers online: Roughly 70% to 80% of their online revenue is connected to a classified ad sold in the print edition — known as an "upsell," said Paul Ginocchio, an analyst at Deutsche Bank.
