Yahoo expands ad deal with newspaper partners

Yahoo has extended an online distribution deal with US newspaper companies that will lead to sharing ad revenue

In a win for its online advertising strategy, Yahoo Monday extended a deal that makes it the exclusive online distribution site for U.S. newspapers from a consortium of 12 newspaper companies, enabling the Web portal and search vendor to share and earn online advertising revenue with them.

The revenue-sharing deal, the terms of which were not disclosed, allows Yahoo to garner more online search sales by placing a customized search toolbar on the participating newspaper sites, giving it the ability to reach advertisers in local markets it otherwise might not have access to, company executives said on a conference call. Yahoo also will earn more revenue through ads placed on newspaper Web sites when their local news content is distributed on the Yahoo site.

In turn, newspapers will distribute their content on Yahoo's news and other portals, and be able to place more targeted advertising online through Yahoo's graphical advertising technology, said Robert Decherd, chairman and CEO of Belo, which is one of the newspaper companies in the consortium. Yahoo's portal reaches 74 percent of the U.S. population every month, said Sue Decker, acting Yahoo chief financial officer, as well as an executive vice president and head of its Advertiser and Publisher Group.

Stories from newspapers in the consortium now will appear as headlines on Yahoo's news sites, with links back to the newspapers, Decker said. In this way, Yahoo will have more opportunity to earn advertising revenue from clicks on ads posted on those newspaper sites, and newspapers will be able to bring their content to a wider audience.

Yahoo and the newspaper consortium first joined forces in November, when the consortium formed with seven newspaper companies. The first phase of the deal came with the integration of job postings from those newspapers with Yahoo's HotJobs site.

The consortium now represents 264 newspapers across 44 states, including major newspapers such as the San Francisco Chronicle, the Miami Herald, the Atlanta Journal-Constitution, and the Houston Chronicle, Belo's Decherd said. McClatchy, which will participate in the Yahoo deal in all aspects except the component, has also joined the consortium.

Other new members since November 2006 include Calkins Media, Media General, Morris Communications and Paddock Publications. Those companies join existing consortium members Belo, Cox Newspapers, Hearst Newspapers, Journal Register, Lee Enterprises, MediaNews Group, and The E.W. Scripps.

Yahoo and the newspaper consortium did not put a timeline on the deal, but said it's likely they won't feel the financial effects until 2008. "It is a long-term relationship that will improve over the years," Decherd said.

The deal also could include newspapers severing ties with other search and online advertisers such as Google, as certain terms of the deal are exclusive to Yahoo, he said, declining to go into more detail about that aspect of the partnership.

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