Yahoo, Newspapers, and the Challenge of Local Journalism

By Jonathan Weber, 11-22-06

The deal announced Monday between Yahoo and a group of newspaper chains to share local classifieds – and, eventually, editorial and advertising services - makes all the sense in the world, on the face of it. Yahoo gets local content, and an entrée into local markets. The newspapers get Yahoo's online tools, and access to its massive national customer base. Whether these entities can actually work together effectively is very much an open question, but you can't fault the logic.

You can, however, fault the lack of ambition.

The newspapers, led by Dean Singleton's MediaNews Group, are effectively punting on the opportunity to establish themselves as the dominant local source for online news, information, and advertising services. Since they are already the dominant players in the offline world, to essentially agree to go halves with Yahoo in markets they once owned is a striking admission of weakness.

Yahoo, for its part, once looked ready to make a real foray into the journalism business, hiring a strong management team for Yahoo News and bringing on a few high-profile reporters, like Kevin Sites and Richard Bangs. While this was always a delicate strategy that tried to balance aggregation with original content creation, this week's deal seems like a clear retreat from journalism – and an admission of weakness from Yahoo, too, as it struggles in the face of Google's superior technology.

It is self-serving for me to say all this, since I'm building a business, NewWest.Net, based on original local journalism. Personally, I'd rather see Yahoo teaming up with small publishers and helping to underwrite a new, Web-centric, participatory form of journalism, one that breaks away from the aging, print-based formulas of old-line newspapers. Instead, it's joining with entities which, despite all their recent travails, remain highly profitable monopolies in most of their markets.

A lot of journalists these days see the health of newspapers as synonymous with the health of journalism, which is logical enough since most good journalism is indeed produced by newspapers. But I would submit that over the long run, a healthy journalism economy will depend not on a resurgence of the old monopolies, but rather on the emergence new entities and new forms. The two Washington Post political reporters who just jumped to a new online publication – that to me is a much more positive harbinger of things to come.

Here in Missoula, Montana, where Craigslist has yet to make a dent and online advertising is still a novelty for many businesses, the local newspaper is owned by Lee Enterprises, which is a major player in the new Yahoo deal. God knows the Missoulian can use the help: its Web site is the only one I know of that actively drives people away by running headlines which lead not to a story, but to a solicitation to buy the print newspaper. I'm sure they'll improve with Yahoo in the mix, but somehow it seems unlikely that the end result will be more investment in local journalism.

The panic in the journalism community over the rapid decline of the one reliable paymaster - the monopoly newspaper – has led us to forget the fact that just a few years ago the biggest threat to journalism was the monopoly newspaper. Competition, in journalism as in most enterprises, is a healthy thing; it's no coincidence that just about the only big papers in the country showing decent circulation numbers are the New York tabloids that are locked in a brutal competitive battle. If competition tends to drive out the lengthy, thoughtful and obscure in favor of the immediate and salacious, well, that's a problem we'll just have to wrestle with.

As I've written elsewhere, I think a healthy Yahoo is a good counter-balance to the threat of an all-Google world. And I think healthy newspapers are very important to journalists and their communities. But if they're joining together to prop up old models – and Yahoo, as Jeff Jarvis has written, is in some ways the last old-media company – that's not going to be much of an advance for readers, advertisers, or journalists.
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