The first era of newspaper experiments on the Internet, fueled in
part by the fear that the Web would devour profits, is over. A new
era of newspaper experiments on the Internet, fueled in part by the
fear that the Web will not generate profits, has begun.
Where will it lead?
That is what is being asked after several months of bad news in
the industry. Three of the nation's major newspaper companies -- the
Tribune Co., Knight Ridder and The New York Times Co. -- have handed
out pink slips to new-media employees. Net advertising revenue from
the Internet in the third quarter of 2000 was up year over year, but
down from the previous quarter -- a highly unusual sort of slippage.
Revenue is expected to dip further in fourth-quarter reports and
early this year, as ailing dot-com businesses worry more about
survival than branding.
The mantra now is: Reach profitability soon -- by the end of
2002, if not before.
The Web sites' parent companies also suffer from anemic
advertising revenue and have less leeway to underwrite losses if
they are to meet the profit targets they have set for themselves and
for Wall Street.
The most important revenue stream, newspapers' Internet
executives agree, will be employment advertising -- which, for the
moment at least, is no longer considered the most endangered revenue
source in the newspaper business.
There are few other common threads in the plans of new-media
executives around the newspaper business. Once inclined to listen
and invest as a group -- in "fads," some executives said -- they are
now concentrating on the special characteristics of their own
properties and markets. The idea is to weave national and local
revenue opportunities or cost savings into one-of-a-kind business
In Minneapolis, The Star Tribune, owned by McClatchy, is building
Web sites for local businesses. The Washington Post has become
partners with online retailers in a virtual mini-mall in a corner of
the washingtonpost.com Web site. The Emporia Gazette in Kansas is
selling a book of local history.
The Augusta, Ga., Chronicle and The Topeka, Kan., Capital-
Journal, both owned by Morris Communications, offer Internet access.
By contrast, in St. Louis, Pulitzer Inc.'s postnet.com L.L.C. sold
its Internet service on Jan. 12, with 14,000 subscribers, to
Paid subscriptions -- anathema to most newspaper Web sites,
except The Wall Street Journal's, which has sold 500,000 of them --
are back under discussion at companies like E.W. Scripps. One
thought is to offer nonsubscribers wide access to news, but give
paying subscribers a look at the classified ads a day early. Other
companies, like McClatchy, are talking about selling to other
businesses the software they have created to move news and ads from
computers to cellular phones to palmtops.
Eric K. Meyer, a managing partner of NewsLink Associates, which
conducts research into online and some other journalism, called this
moment an important juncture because newspaper sites and their
parent companies still need to experiment, but have less margin for
"This has been an industry that has been based on me-tooism and
fads," he said. "Whenever someone did something, everyone else had
to do it. When anyone spent money, even too much money, everyone
else had to do it."
He added that newspaper companies originally "were afraid to get
left out of something that could be a billion-dollar business for
them. Now they're afraid to get left in something that could be an
This new era of experiments may well be less lemminglike, with
companies buffeted less by the marketing panaceas urged on them by
theorists who haunt the perpetual industry conferences: Join an
online service. Ditch the online service. Go hyperlocal. Go
regional. Create content and make your site unique. Use Java and
make your site throb. …