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Glad I just found this site.  Way to go!It's high time the newspapers took a hard look at the prices they charge for ads.  Advertising is the life of any newspaper but when no product is sold, it's fruitless.  I sure hope this is the wave of the future.  How many ads have I run with no results?  Whew!!
Carolyn

Newspapers fight back against online classifieds

By Lisa Baertlein Mon Jun 12, 11:18 AM ET

LOS ANGELES (Reuters) - For the past decade, newspapers have seen their help-wanted advertising under siege from online rivals. Now, as the Internet begins to eat into automotive and real estate classifieds as well, newspapers are fighting back.

Classified advertising accounts for more than a third of revenue at newspapers, which until recently didn't want to accept that advertisers are increasing their spending on the Web, which is better suited to connecting individuals and delivering up-to-the-minute information.

"Now they totally get it and they're scrambling to make sure they're not left out of the equation," said Peter Zollman, founding principal of Classified Intelligence, a research and consulting firm.

Favored attack strategies include banding together, buying or forming partnerships with upstart Web sites and building new sites to serve local needs.

One such effort is Classified Ventures LLC, which is owned by six media companies, including Knight Ridder Inc. (NYSE:KRI - news), McClatchy Co. (NYSE:MNI - news) and The Washington Post Co. (NYSE:WPO - news)

In the automotive sector, Classified Ventures operates automobile shopping site Cars.com (http://cars.com) and last year it bought Newcars.com (http://newcars.com), which points consumers to car dealers and opens up a new potential revenue source by selling leads to dealers.

Meanwhile, Cox Enterprises, the parent of Cox Newspapers, owns a majority stake in AutoTrader.com LLC (http://www.autotrader.com), the largest used vehicle Web site.

Cox also owns Manheim, which takes vehicles from wholesale sellers and markets them to car dealers. The Atlanta Journal-Constitution, a Cox newspaper, uses a Manheim advertising service through which dealers place ads on the paper's print and online properties.

Newspapers have had a good start in the automotive segment of online classifieds, where they have been insulated by the auto industry's delayed embrace of Web classifieds.

But with the majority of consumers now beginning their research online, and print ads for vehicles down almost 9 percent to $4.6 billion in 2005 because of reduced spending by carmakers, the newspapers need to stay ahead of the curve.

FUTURE FRONTS

In the real estate area, a healthy market propelled print advertising to $4.6 billion last year, an increase of 10 percent from 2004. But revenue from online real estate ads is set to overtake revenue from newspaper ads by 2009, according to Borrell Associates.

Consumers already use the Web for everything from locating properties, agents and price records to shopping for mortgages. Newspapers have followed their lead and are snapping up sites.

Last month, the Tribune Co.'s (NYSE:TRB - news) interactive division bought ForSaleByOwner.com (http://forsalebyowner.com), a site that helps owners sell their property without an agent.

Classified Ventures, the group owned by Knight Ridder, McClatchey and the Washington Post, has owned Apartments.com and its predecessor since 1997. Its related properties include Homescape.com and HomeGain.com.

Still, owning a site does not guarantee a win. Newspapers that take advantage of long-standing relationships with advertisers by offering a broad set of online and print options appear to be finding the most success, analysts said.

TAMING THE MONSTER

Newspapers are looking at what has happened to its lucrative help-wanted business since the late 1990s, when Web sites like Monster.com (Nasdaq:MNST - news), Yahoo Inc.'s (Nasdaq:YHOO - news) HotJobs.com, and Craigslist.org undercut prices and turned the business on its head.

Gannett Co. Inc. (NYSE:GCI - news), Knight Ridder and the Tribune Co. responded in 2002, joining forces to form CareerBuilder.com -- now one of the leading job sites.

Along those same lines, the Chicago Sun-Times, the Pioneer Press and other suburban and metro newspapers in 2004 launched Chicagojobs.com, an area job board that competes with a growing number of niche job sites that are intensifying competition.

Last year, newspaper employment ad revenue grew 12 percent to $5.1 billion, according to NAA. Online revenue was about $1.75 billion, dominated by Monster, CareerBuilder and HotJobs revenues, according to Classified Intelligence.

But the help-wanted business is also getting a boost from a healthy job market, which has made it possible for newspapers to raise rates, even amid circulation declines.

As the incumbent leaders, newspapers have everything to lose in the classified advertising industry. Last year, classified advertising at newspapers rose 4 percent to $17 billion, while online advertising rose almost 32 percent to $2 billion.

One thing that is clear is that the whole classified advertising market will continue to evolve rapidly -- particularly with Web advertising-savvy tech giants Google Inc. (Nasdaq:GOOG - news), Microsoft Corp. (Nasdaq:MSFT - news), Yahoo and eBay Inc. (Nasdaq:EBAY - news) coming in.

But despite their heft, these Web heavyweights will be challenged to pull in profits as an ever-larger roster of rivals drives ad prices down, a situation that could play to the advantage of newspapers.

"The more fragmentation there is, the easier it is for one local player to capture a lion's share," Zollman said.