February 4th, 2006

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The local future of vertical search

Saturday, February 4th, 2006

There’s a key difference between local and national news outlets that has so far insulated small newspapers from online competition but which will eventually leave them even more vulnerable than their bigger brethren.

Unlike national and regional papers, local papers are niche media. They cater to the tiny number of people who care about, for example, Gadsden, Alabama. Nobody else in the world keeps as many boots on the ground in a small- to mid-size community as the local newspaper.

That’s why many newspaper corporations are urging their editors to emphasize local news on their Web sites even more than in their print products. Simply: on the Web, we have competitors for our national and global content. But in small towns, local news content is still back in the happily monopolistic 20th century.

This brings us to search. Search engines let you keep a few big brands in your head, and rely on them to find content from lots of other brands. But Google and the other general-interest search kings don’t target niches well. Yes, googling “gadsden auto sales” is easier than tracking down the Gadsden Times’ classifieds, but the quality is inferior: anyone with an ad in the paper has their information up to date and tells you exactly what they’re selling. And a Google Local search is good at tracking down retailers, not connecting you with local peers.

Local news is even harder to get from a general-interest search engine. (Aggregators like Newsvine may one day have enough users to work in smaller markets, but they’re not very useful when there aren’t very many news outlets to grab from.)

So search is a great way to find things, but general-interest searches are too imprecise to seriously compete with local newspapers. What will threaten local papers–or, phrased differently, what people want but aren’t getting–are “vertical” local search engines, which are engineered to turn up local results for given searches. Search engines that users visit in order to find local results.

Vertical search is hot in niche media, and rightly so. “If Google is going to be CBS, I want to be Turner Broadcasting,” says LookSmart CEO Dave Hills, whose company offers engines for subjects like sports, food, and fashion as well as a few big metro areas. Existing vertical services like LookSmart, Oodle, the still-primitive Google Base and even the ugly, user-unfriendly Craigslist are all quite scalable. They will take over small markets eventually if local brands don’t own those markets first.

And if they do move in, small papers will be devastated, because local advertising, unlike national or regional advertising, is seldom about brand-building, which can occur through accidental encounters with display ads on a news page. Local advertising is about connecting people with stuff they’re looking for. Someday soon, somebody will build a better Craigslist, and the bottom will really fall out of classifieds. But major metro papers can weather that collapse more easily than small-town papers.

For now, those small newspapers have the dominant online mindshare in their communities. There’s no reason they can’t use this–quickly–to dominate local vertical search.

Posted in niche, search, things we should do better | No Responses »

"The heart and soul of journalism is being decided right now."

Saturday, February 4th, 2006

If any one article captures the depth and breadth of the trouble facing newspapers–and calls news-lovers to arms–it’s this AJR piece, via Romenesko.

Posted in inspiration | No Responses »

A nonprofit national newspaper?

Saturday, February 4th, 2006

The other day, my friend David asked me whether I’d ever heard anyone talk about a nonprofit national newspaper, supported in part by philanthropy, a la The Atlantic or NPR. Perhaps the distribution costs would be too high, he wondered, but what about an online newspaper? This is what I told him.

The more common debate at the moment (and I don’t know why it hasn’t happened to a greater extent before) is reprivatization. Some small nonprofits, like the Anniston Star, already exist. And the impending Knight-Ridder collapse has led to talk about some sort of union or employee ownership, which would be cra-zee.

The biggest impediment to a national nonprofit daily would be distribution. USA Today took 5 years of free stories from across the Gannett empire to massage its distribution model into profitability, and nobody has that kind of cash flow except private corporations. (USA Today still moves a huge share of its ink through single-copy sales, and most of those are hidden in the fine print of hotel bills. It’s not high-quality circulation, but they make up for it with their high-quality demographic of traveling businesspeople. So it works, but I’m not sure there’s room for more.)

Even NPR is just a content provider, something like the AP, not a full-fledged distribution organization. It sloughs that work off to its less financially secure member stations.

Of course, the Internet is the heaven to which distribution models all dream of going when they die. And Salon actually comes close to being a nonprofit Internet newspaper. (Nonprofit in the sense that it never turns a profit.)

The basic problem with an Internet newspaper, even a nonprofit one, is that online ads make too little money to support a daily newsgathering organization of national quality. If even a break-even model is going to be found for the Internet, I think for-profit companies are going to have to find it, because nobody else has the money to spare.

All that said, if my nightmares come true and newspapers gradually slice their news operations down to TV station staffing levels, there will be a big upmarket opening for a few companies (perhaps the New York Times, some satellite-distributed version of NPR and a few other big papers) who will continue to provide quality news for the few who can afford it. A nonprofit newspaper might be one of them.

So: I am pessimistic.

Posted in business models | 2 Responses »