Newspapers Losing Verticals to Online

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.