The Wall Street Journal-20080215-Media Firms Create Online-Ad Network
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Media Firms Create Online-Ad Network
Full Text (706 words)Four of the largest U.S. newspaper publishers have teamed up to create an online ad-sales network, the second such partnership to be formed in the newspaper industry in recent years.
Gannett Co., Hearst Corp., the New York Times Co. and Tribune Co. are setting up the network as a stand-alone company called quadrantOne. Like a consortium created by Yahoo Inc. and a group of newspapers last year, it will allow national advertisers to buy space on certain of the Web sites operated by their newspapers in a bid to capture new sales as revenue at their print editions evaporates.
While Yahoo's partnership doesn't have guaranteed access to the Web- site ad inventory of its affiliate newspapers, quadrantOne will get access to a certain percentage of the ad inventory. QuadrantOne will include more than 120 papers, whose Web sites reach a total of 50 million unique monthly visitors, the company said. All four publishers have devoted funding to the company.
The network doesn't include Gannett's largest paper, USA Today, or the New York Times, which already have their own national sales operations. Instead, those companies will use the system to place ads on local titles such as the New York Times's Boston Globe.
QuadrantOne is designed to let national advertisers buy space in many local papers as well as on the Web sites of local television affiliates, without media buyers and planners having to make calls to multiple companies. If a marketer "can make one phone call to a portal or 100 in local markets to get the same audience" for their product, "the answer . . . would be a no-brainer," said quadrantOne interim Chief Executive Dana Hayes.
The formation of the partnership comes as the newspaper industry is struggling with falling advertising revenue, a result both of advertisers defecting to the Web and the weak economy. Difficult industry conditions sparked a new wave of cost-cutting this week. Yesterday, the New York Times said it will cut about 100 newsroom jobs this year, out of an editorial staff of 1,332, believed to be the largest such reduction in its history.
The cuts, through buyouts, attrition and possibly layoffs, came one day after Tribune said it would shed as much as 2.5% of its staff, including cuts at the Los Angeles Times, Chicago Tribune and Baltimore Sun. Tribune yesterday named Russ Stanton as the new editor at the Los Angeles Times, its largest paper. Mr. Stanton, previously innovation editor of the paper, will be the Times's fourth editor in three years. His three predecessors all invoked budget-cutting issues as a reason for their departures. Another Tribune paper, the Orlando Sentinel in Florida, said its publisher, Kathleen Waltz, was resigning as well after 34 years with the company.
Cuts in the industry have been sparked by investor unrest, leading to some mergers. Tribune recently went private in an $8.2 billion buyout. The New York Times is facing a dissident investor group that has nominated a slate of people to run for seats on its board.
Yesterday, New York Times Chairman Arthur Sulzberger Jr. and CEO Janet Robinson had breakfast with a representative of the group, according to a person familiar with the matter. It is the second meeting the executives have had with a member of the group, which includes hedge fund Harbinger Capital Partners and Firebrand Partners LLC, an investment firm led by Scott Galloway, an associate professor at New York University's Stern School of Business.
A spokeswoman for the Times declined to comment.
The investor group as of Tuesday had amassed 10.5% of the Times's publicly traded shares, according to a Securities and Exchange Commission filing last night, and wants the Times to focus more on its Internet strategy. As of 4 p.m. in New York Stock Exchange composite trading yesterday, New York Times's shares rose 86 cents, or 4.8%, to $18.84.
Earlier this week, the Times nominated Dawn Lepore, the CEO of Drugstore.com Inc. and an eBay Inc. board member, and Robert Denham, the former CEO of Salomon Inc., to its board. It also said that Sara Lee Corp. CEO Brenda Barnes and Centerview Partners LLC partner James Kilts will step down. The company is expected to oppose the directors that Harbinger and Firebrand nominated.
