Resnick, a veteran business and technology writer, specializes in online services.

She is editor and publisher of Interactive Publishing Alert, a bi-weekly newsletter from which this is excerpted.

Views expressed are not necessarily those of NewsLink. Grab Your Partner! Do online alliances help or hurt local publishers?


By Rosalind Resnick
LOCAL NEWSPAPAPER and magazine publishers are being deluged with proposals from online city guides looking to trade their traffic for the publishers' content. With the $60 billion market for local advertising at stake, competition is fierce and likely to get fiercer. CityScape, CitySearch, Digital Cities, BigBook, At Hand, Yahoo! and others are rolling out nationwide, so publishers are likely to see many offers from geeks bearing gifts in the months to come.


      "Newspapers have to decide what their goals are," says Susan Bokern, associate director of Gannett New Media. "It's not about regurgitating content. It's about extending your brand name in a new medium. Partners are great, but you need to be careful that you're not building someone else's brand."


      Stern Publishing, Inc., the New York publishing company that owns the Village Voice, LA Weekly and OC Weekly, is providing content to America Online's Digital Cities and/or Yahoo!'s regional directories in California and New York.


      "Shying away from alliances is an old print business model," says Linda Nelson, Stern's vice president of new media.


      It's important, Nelson says, to choose partners carefully and not give away the store. Only the basic Voice events listings are available on Yahoo! New York. To see the rest, readers must click through to the Voice's site. Nelson also refused to let go of the Voice's personal and real estate classifieds, both of which are major draws for her site.


      "I feel that what's up there [on Yahoo!] is very limited information, and I feel it's good for our brand and our visibility because a lot of people go in there," Nelson says. "If, at the end of the year, my web site is doing great, then maybe I won't need [Yahoo!] any more."

ON THE WEB, site traffic -- whether you measure it in terms of hits, page views, or click-throughs -- is what determines how much you can charge for advertising. Most of the ad dollars on the Web are going to search engines and directories like InfoSeek, Lycos and Yahoo! The most heavily trafficked site is Netscape, the default home page for many Internet users. As a result, many publishers are happy to trade links with just about anyone in the hope of generating more traffic.


      And that's exactly what these online city guides are offering -- link exchanges, joint promotion, ad revenue sharing and other sorts of cooperative partnerships. But publishers must be careful about entering into ventures whose primary purpose is to build the guide's brand at the expense of the paper's own.


      With all the competing city guides springing up, there's bound to be a shakeout -- and soon. Last month, giant AT&T pulled the plug on a Sacramento, Calif., guide called Home Town Network which delivered information about local government and entertainment in addition to classified ads. AT&T said it decided that the service would have been too expensive to roll out nationally.


      "I don't sign any deals that are longer than a year," Nelson says. "I have no idea what the market will look like then."


      Here are the deals some of the city guides are offering today:

  • At Hand: The newest player in the regional content game is Pacific Telesis' At Hand service, which launched its guide to California on Aug. 30 after close to a year of development and a month-long test. At Hand is partnering with local content providers to create a service that provides a "one-stop problem-solver for shoppers," says Jeff Rios, manager of interactive services for The Good Guys, a regional electronics retailer that is one of At Hand's charter advertisers.


          For now, At Hand is clearly positioning itself as a distributor of information, not a publisher. At Hand's focus is home, entertainment and sports, not local news. The guide includes 1.2 million merchant listings plus articles on related topics from 43 magazines and newspapers and ads from 65 sponsors including Black & Decker, Cobra Golf, Good Guys, Kodak, Mastercard, Williams-Sonoma and the San Diego Zoo.


          Editorial content for the site is being provided by 14 widely known publishers, including American Express Publishing's Travel & Leisure Guide and BPI Communications' Billboard Magazine and Hollywood Reporter. Time Inc. contributes Picks & Pans and Celebrity News content from People Magazine, Zagat Surveys serves up reviews of restaurants based in the Los Angeles, San Francisco and San Diego areas plus information about local hotels. Tribune Media Services shares Siskel's Flicks & Picks.

  • CityScape: Building on its MSNBC launch, Microsoft plans to roll out the first of its online city entertainment guides in Seattle in the first quarter of next year. By midyear, the company expects to have the advertiser-supported guides in New York, Boston, and San Francisco. Preliminary plans call for guides to movie listings and restaurant reviews. Microsoft is hiring its own staff to create original content but may team up with local publishers if it makes sense, according to published reports.


          Newspaper publishers breathed a sigh of relief last month when Microsoft announced that it would hold off on seeking classified ads for the new venture, focusing on entertainment-related ads and information instead. But publishers would be wise to keep a close eye on the boys from Redmond. CityScape has hired CUC International of Stamford, Conn., and its 1,200-strong national sales force to sell ads in its local guides.

  • CitySearch: CitySearch, bankrolled by ATT Ventures, Goldman Sachs, director Steven Spielberg, Compaq founder Ben Rosen, and Cybercash founder Bill Melton, is aggressively pursuing the local information market. Like Microsoft, CitySearch has stated publicly that it, too, will not seek classified advertising on its own in the local markets it enters, cooperating with local publishers instead.


          Much of CitySearch's current focus is small business, local government and non-profit groups. The La Crescenta (Calif.) startup employs 240 people and generates revenue by putting up Web sites for local advertisers in addition to selling ad space. CitySearch already has sites in Raleigh, N.C., and Pasadena, Calif. and moved into New York City this spring by acquiring the Metrobeat (http://www.metrobeat.com/) events listing site. San Francisco is scheduled to go up in October, and sites in Austin and Salt Lake City are on the way.


          CitySearch's cooperative model is best seen in Raleigh-Durham where the company is working closely with The Independent, Raleigh's major newspaper, and one of Raleigh's television stations, WTVD. Content providers share in the ad revenue that CitySearch sells on the site.


         

  • Digital City Digital City, the America Online-Tribune Co. joint venture, already operates virtual communities in Washington, D.C., Boston, Atlanta, San Francisco, Los Angeles, and Philadelphia. Currently, these local guides are available on America Online's proprietary online service with a Web version slated for launch this fall, according to general manager Bob Smith. Plans call for Digital Cities in 400 cities worldwide.


          Digital Cities has positioned itself as an aggregator of content, partnering with local publishers in each city where it rolls out.


          "The Web components of our deal look a lot like other Web cross-promotional or cross-linking deals," Smith said. "We have some deals where no cash is exchanging hands, and it's strictly cross-promotional. We've also some deals that let the partner sell the space and we're given a small cut. It really varies."


         

  • Yahoo! Yahoo!, the de facto Yellow Pages of the Internet, just rolled out its first three community sites in San Francisco, Los Angeles and New York. Other sites are going up in Chicago and Washington, D.C. Unlike CitySearch, Yahoo! is not in the business of setting up Web sites for local advertisers, preferring to build co-branded intermediate pages that link readers to a publisher's site.


          Ellen Siminoff, director of Yahoo! Communities, wouldn't disclose specifics of Yahoo! content deals but says that some publishers earn revenue while others do not. Siminoff says that traffic levels and commitments to exclusivity are the determining factors in any ad revenue split.


          Current publishing partners include KPIX, a San Francisco CBS station; the San Francisco Bay Guardian; KNX, a Los Angeles-based TV station; KIIS-FM, another Los Angeles radio station; The Orange County Weekly; The Orange County Register; The LA Weekly, The Village Voice, and The Daily News.