CHICAGO – A new Yahoo Inc. news service that directs people to the Web sites of local newspapers has led to speculation that a more formal arrangement that includes revenue sharing is in the works.

Operating since March, the local Yahoo News service cobbles together stories and video feeds from print and broadcast outlets across the country. A user simply types in his ZIP code to get the news for his area.

But the key question emerging is, who provides that local coverage and what benefit is there for a publisher to be a part of that service?

On Friday, a story posted online at BusinessWeek.com speculated that major Web portals, including Yahoo, and several newspaper publishers were in talks for a more formal news-sharing arrangement.

For newspaper publishers, suffering from declines in circulation, revenue loss and job cuts, bolstering revenue from online news operations has become critical.

More importantly, “newspapers are trying to nail down their Web sites as a significant delivery of audiences to advertisers,” said John Morton, an industry consultant.

But the Internet provides numerous services, including offerings from Google Inc. and Yahoo, to aggregate news content from around the globe. And publishers, who pay the salaries of the reporters and editors who put those stories together, receive no revenue.

That could change, according to the BusinessWeek story, but how any partnership between a publisher and a Web portal would work is unclear.

“There doesn’t have to be any direct financial transaction” if the goal is to drive traffic to each party’s site, said Rich Gordon, director of the new media program at Northwestern University’s Medill School of Journalism.

On the other hand, “there really are an infinite number of possibilities” that could be explored, he said. Newspapers could pay Yahoo for traffic the portal generates, for instance, or perhaps the papers could get a slice of ad revenue from Yahoo if a reader clicks on an ad because of the story.

Also, during a recent media panel, an executive with Yahoo News said the site is considering partnerships with major publishers for news content but the news would be contained on Yahoo. In that scenario, the executive said Yahoo would share ad revenue generated by the stories.

Yet Yahoo has already launched what Gordon called “at least a tacit relationship” between newspapers.

At the home page for Yahoo News, just below the categories for “Top Stories” and “Most Popular,” there is a link for a test – or beta – version of local news. Users click on that, type in a ZIP code, and are directed to stories from local papers and television stations.

Type in a zip code for the Chicago area, for instance, and the first news organization that pops up is the Chicago Tribune. That is followed by links for WLS-Ch. 7, WMAQ-Ch. 5, “suburban papers” and the Daily Southtown.

If you click on a story, you are directed to the Web site of that organization. The listing does not include the Chicago Sun-Times or WBBM-Ch. 2.

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Brian Nelson, a spokesman for Yahoo News, said there is no financial relationship between the listed news sites and Yahoo.

“Our editorial team looks into these markets to find the most interesting content,” he said. “The goal is to provide a more comprehensive local news experience.”

He said the response to the new service from Yahoo users has been “great. And the response from the publishers on the feeds has been positive because they are getting traffic to their sites.” Nelson added that Yahoo has been contacted by publishers asking to be included in the service.

He declined to comment on speculation that a more formal arrangement with publishers is in the works.

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A spokesman for Tribune Co., the publisher of this paper, also declined to comment on any agreements – either existing or pending – that could be in the works with Yahoo.

Peter Zollman, the head of Classified Intelligence, a consulting firm in Florida, said there have been talks going on for sometime between a range of media groups – traditional and Internet – about various partnerships.

But in order for such partnerships to work, the goals need to be clear.

“Consortia don’t work when everybody wants their own thing,” Zollman said.

Morton, the newspaper consultant, said while it is unclear how a partnership between a Web company and a publisher would work, he does think it is a good idea.

“It’s smart to have a horse in every race,” he said. “Who knows how 10 years from now how things will work out.”



(c) 2006, Chicago Tribune.

Visit the Chicago Tribune on the Internet at http://www.chicagotribune.com/

Distributed by McClatchy-Tribune Information Services.

AP-NY-07-14-06 2025EDT


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