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Newspapers Losing Verticals to Online

Posted on Wednesday, Mar 14th 2007

Big chunks of the revenues of newspapers traditionally came from the verticals (Jobs, Classifieds, Personals, Real Estate, Cars, Travel, Events, Reviews). With the popularity of the online services ascending, and with huge investments made in each of those categories, the newspaper industry has been suffering, as ad dollars systematically flow out of print, and onto online. Not only that, the dollars flow out of the newspapers into specific vertical portals.

The companies that have been hurting are: Gannett (GCI), Tribune (TRB) McClatchy (MNI), Dow Jones (DJ), New York Times (NYT), Washington Post (WPO) amongst others.

This, however, is a perfectly addressable situation. In each of the categories in which the newspapers are losing verticals, they can either build verticals, or roll up verticals.

We have just started analyzing the Personal Finance vertical, an important advertising driver for the entire media industry. The leader in the vertical is Yahoo! Personal Finance. There is no reason, however, that each of the media companies above cannot build up online Personal Finance properties of their own that are equally as deep as Yahoo’s.

The same applies for the other verticals : Real Estate, Cars, Travel, etc.

There will be literally hundreds of startups in the vertical portal area that would look for exits within the next 9-18 months. It’s a GREAT opportunity for newspaper companies to look to fill their holes.

And when they do so, they should look to leapfrog web 2.0, and jump directly into web 3.0.

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What is your definition of web 3.0?

charlie Wednesday, March 14, 2007 at 6:16 PM PT

click the link above.

Sramana Mitra Wednesday, March 14, 2007 at 6:29 PM PT

I laugh loud when I hear such things, Technology is a threat to all industry, one man sitting somewhere can eliminate the whole industry through a simple site. Internet allows free communication (or cheaper).

Watch out fellows, Tech can kill. The best defense is to attack, use the existing newpaper market and start integrating it with online market. Its your choice now but soon it will not be your choice :). Enjoy internet, I love it.

AjiNIMC Friday, March 16, 2007 at 5:02 AM PT

[…] Shift in industry dynamics Circulation of US daily newspapers declined by 2.8% during the six months ended September 30, 2006 (Audit Bureau of Circulations). Newspaper revenues of the vertical segments (jobs, real estate, travel and classifieds) have moved o…. […]

Sramana Mitra on Strategy » Blog Archive » Will Gannett Pull It Off? Friday, March 16, 2007 at 8:25 AM PT

[…] NYT is working on organizing its online business on the basis of key verticals, which will allow the company to extend its popular classifieds sections like luxury real estate, travel, and entertainment, increase user engagement and aid in monetization of the sites. The recent partnership with Monster to build its online recruitment product offering is a step in the right direction as it will allow the Company to be present in a key vertical, clearly one of the biggest revenue generators online. [Read Newspapers Losing Verticals to Online] […]

Sramana Mitra on Strategy » Blog Archive » NYT: Print to Digital Monday, March 19, 2007 at 12:30 PM PT

[…] We have been discussing the vertical segments that old media companies are losing to new media, and have focused on Personal Finance as an important category. We covered Yahoo from a Web 3.0 perspective earlier, and here we take a look at Microsoft’s offering. […]

Sramana Mitra on Strategy » Blog Archive » MSN Money Monday, March 19, 2007 at 1:07 PM PT

[…] Unsexy? Indeed. The Verticals. The Verticals is where the money comes from. And Newspapers have been losing their verticals lately to online. […]

Sramana Mitra on Strategy » Blog Archive » NYT : Try Web 3.0 Friday, March 23, 2007 at 12:18 PM PT

[…] its peers (Gannett, McClatchy, NYT) Tribune is also suffering from declining advertising revenues and newspaper circulation. The Company’s ad revenues decreased 5.1% to $233 million in February 2007 compared with $245 […]

Sramana Mitra on Strategy » Blog Archive » Tribune: Will buyout save Tribune? Tuesday, March 27, 2007 at 11:24 AM PT

[…] like Washington Post or NYT could easily, with relatively minimal investment, get into the finance vertical by leveraging Seeking Alpha. A revenue sharing deal with some upfront license fee would be easy to […]

Sramana Mitra on Strategy » Blog Archive » Web 3.0 and Seeking Alpha Thursday, March 29, 2007 at 11:54 AM PT

[…] economic conditions and the attack from digital media. The main source of their revenues – vertical classifieds – have steadily been moving online. Their response should be to invest in and acquire online verticals, which has happened to some […]

MaximumCEO » Blog Archive » Newspaper Stocks: NYTimes, Gannett, McClatchy: business strategy, supply chain management, outsourcing Monday, August 25, 2008 at 7:34 PM PT

[…] Newspapers Losing Verticals to Online | Sramana Mitra on Strategy […]

Offline Advertising for Increased Website Traffic | Website Traffic Tactics Sunday, February 28, 2010 at 1:26 AM PT

It's even murkier for newspapers now in 2010 as they have yet to successfully adapt an online strategy industry-wide.

Editorial App Wednesday, September 29, 2010 at 12:12 AM PT