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Newspapers Struggle But Pin Hopes On Web

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By SETH SUTEL, The Associated Press

Published: December 6, 2007

NEW YORK - Newspaper publishers, entering 2008 with some of the worst economic conditions in many years, said Wednesday that they hope to bring more readers - and ad spending - to their Web sites with expanded offerings of news, advertising and video.

The newspaper industry has been struggling as a dismal housing market weighs heavily on real estate and other types of print advertising.

As Donald Graham, chief executive officer of The Washington Post Co., put it, "2007 was not a good year for anybody in the newspaper business."

Graham, however, said his company was hopeful about expanding its online audience, particularly as the 2008 presidential election approaches. That, he said, should play to the Post's strengths in political reporting as well as at the company's online magazine, Slate.

At McClatchy Co., the nation's third-largest newspaper publisher by circulation, CEO Gary Pruitt said the company's online advertising growth was "stunted" in 2007 partly because of one-off factors such as changes to the company's agreement with CareerBuilder, a recruitment advertising network co-owned by Gannett Co. and Tribune Co.

The executives were speaking at a conference sponsored by UBS.

Chris Hendricks, McClatchy's head of online operations, called the company's 0.8 percent growth in online ad revenue in the year-to-date period through October "disappointing," but said McClatchy is optimistic about converting more of its online traffic into ad dollars next year. In October, he noted, "unique" visitors to McClatchy Web sites jumped 23 percent over the same month a year ago, to 21 million.

Part of McClatchy's optimism stems from a deal with Yahoo, which has enlisted hundreds of newspapers in a national consortium aimed at boosting traffic to newspaper Web sites and enabling them to sell more ads by using Yahoo's technology to target very specific categories of users.

Many of those benefits may be a ways off, though. Hendricks said Yahoo has been ironing out its ad-serving technology for newspapers and that McClatchy's newspapers would start to implement the technology in June through October of next year, with the benefits becoming most apparent in 2009.

Tom Russo, a McClatchy shareholder and fund manager at Gardner Russo & Gardner, called the Yahoo program, which McClatchy joined in April, a "promising venture" but said he hoped for a quicker rollout. "In a fast-moving world, it's slow," Russo said.

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