Yahoo! (YHOO) has made a big deal about its deal to sell online advertising for almost 200 US newspapers. It will also index their content to run on the big portal. According to The New York Times "for the newspapers, which have struggled in recent years as readers and advertisers have flocked to the Internet, the deal represents an effort to earn a greater share of the fast-growing amount spent online on all types of ads."
Google (GOOG) seems to have come up with a simpler system which it will launch in Europe. It will simply auction off ad space in newspapers using a ruthless supply and demand system. MarketWatch writes "bidders would offer the price they are willing to pay for the ads, and newspaper publishers would then decide whether to accept the offer. Google stands to take a piece of the advertising sales from every deal between advertisers and publishers."
The new announcement indicates that newspapers are still an attractive target for advertisers even in the eyes of search giant Google. It believes that there is money to be made in an industry which many analysts believe is dying. Perhaps they are right.
The danger for newspapers is that once media inventory become a commodity, the value of the content is also marked down. What a newspaper writes may no longer be more important than what its ads can fetch at auction.
Douglas A. McIntyre
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