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September 17, 2005

Bad news for newspapers

By

Frank Barnako reports on Market Watch:

McKinsey & Co. paints bleak outlook for newspapers

The consultants who are helping News Corp. (NWS) develop its Internet strategy warned the nation's newspaper publishers that the Web could cost them $4 billion a year in lost classified ad revenues by 2007. Speaking at the Newspaper Association of America's annual conference in San Francisco, Luis Ubinas, a McKinsey & Co. analyst, said the loss could amount to 9% of papers' total revenues if trends already affecting help wanted ads spread to automotive and real estate ads, AdAge.com reported. The problem is not the competitors, like Craigslist.com or Monster.com (MNST), he said, but rather what their pricing is doing to the business. He called it "price destruction." He said the volume of help wanted ads in 2003 was 50% less than would have been expected if decades of trend lines for the business had proven true.

Ed Lasky  4 21 05