Newspaper Stocks and the connection with Wikimetro

July 4, 2008

Newspaper stocks all continued to tank yesterday, with companies like Lee and McClatchy reaching prices that are either all-time lows, or lows that havent been see in decades. That is no surprise to us, and relates directly to what we are doing. Newspapers have once nitch left, and that is the local business, and they dont know what to do with it. If you want national or international news, it is better and free on the internet. The only area left for newspapers is local news, they need to transition to the internet, and they have no idea how to do it. That’s why their stocks are dropping so low.

That’s also the niche we are trying to fill. We believe that newspapers can’t solve the problem, for a few reasons. First, they are trying to create the same thing online that they have in print, with more features. But, nobody wants to see a newspapers online, especially a local one, and besides newspapers are horrible at doing anything more than writing stories and printing them. They are not technology companies, and can’t figure out how to hire and train programmers to create sites that people will like. They just do essentially what all newspapers do, which is to write, layout and print, and that doesnt work online.

Second, newspapers need to produce products that are regional, and that doesnt work online. For the same reason that Craigslist cant be segmented and divided into separate regional sites, and wikipedia cant be cut up into sites with different subject matter focus, local newspaper websites cant work. One site needs to aggregate what is useful, and we hope that will be us.

Finally, regionalization makes it really difficult to monetize national sales. Back in the day national advertisers would work with local newspapers, but no more. They work through resellers to reach local markets, and even that is disappearing, since they can just put up ads on Google.

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