US Newspaper Companies Form Online Ad Partnership

Four major U.S. newspaper chains launched an online advertising network on Friday that will let advertisers book national campaigns through a single point of contact, reaching 50 million people a month across the U.S.

Investors include the Tribune, Gannett, Hearst and New York Times companies, which publish flagship newspapers such as the Chicago Tribune, USA Today, the San Francisco Chronicle and the New York Times, respectively.

The network, QuadrantOne, will let an advertiser place ads on hundreds of Web sites focused on 27 major markets, targeting users by what they are viewing, their online behavior and demographic information.

QuadrantOne is most notable for the online players that aren't participants, such as Google, Yahoo or Microsoft. This latest move by the newspaper companies may be designed to assert greater control over their print and Web properties.

Yahoo reached a landmark revenue-sharing deal in November 2006 with seven U.S. publishers. Yahoo provides search services, places job ads on its own HotJobs site and sells Web advertising. The deal was expanded in April 2007, with some 264 newspapers distributing their content on Yahoo's portal.

One of the QuadrantOne's investors, the Hearst company, is participating in the Yahoo deal.

Google's PrintAds program lets its customers who are already buying contextual Web-based ads to also place ads in 600 daily and weekly U.S. newspapers. Google also offers easy tools for customers to design their own ad that can be uploaded to particular newspaper.

The Chicago Tribune, the New York Times and the San Francisco Chronicle participate in PrintAds.

If newspapers develop better ways to sell their own online ads, they may not have to share revenue with their Web counterparts such as Yahoo and Google.

Online advertising accounted for about US$16.9 billion in revenue in 2006 and is expected to rise to $50.3 billion by 2011, according to a December 2007 report from the Yankee Group.

The U.S. newspaper industry is in dire straits, in part because of a bumpy U.S. economy, declining print readers and falling print advertising revenue.

Critics argue that newspaper companies waited far too long to revamp their businesses with the surge in online publishing and advertising over the last 15 years.

Companies such as Google, which has made a fortune in Web-based advertising, have reaped some gains at the expense of newspapers, as advertisers look for cheaper and more targeted ways to reach buyers.

Classified advertising, once a bread-and-butter source of revenue for newspaper, has also declined over the years due to advertising boards such as Craig's List.