Details on Yahoo Deal with Newspapers

The newspaper recruitment deal with Yahoo first disclosed here in an Oct. 24 post has finally been confirmed, with some interesting twists. The deal puts in place a recruitment network of seven companies with 176 newspapers in 13 of the Top 15 markets. Additional activities that go beyond the scope of recruitment are to be “filled in later.”

As many as 12 newspaper companies had initially participated in the talks, but some held off joining, apparently tied in to existing vendors, or taking a wait-and-see approach. The participating companies include Media News Group, which is the ringleader; Cox Enterprises, Hearst, Belo, Lee Enterprises, E.W. Scripps and The Journal Register Company. The deal expands upon the affiliation agreements that Media News Group and Belo already have in place with HotJobs.

Designed to rival CareerBuilder and Monster.com, the network was put in place after CareerBuilder’s owners –Gannett, Tribune and McClatchy –refused to consider expanding the ownership roles to others. None of the companies had wanted to be left out in the cold vis a vis recruitment, and its profit potential.

This was reinforced this summer by an influential Deutsche Bank report by analyst Paul Ginnochio. The DB report argued that newspapers affiliated with national sites are significantly more profitable than newspapers tackling the recruitment market on their own. Ginnochio cited the national site’s better technology, enhanced marketing/branding, and more effective reach as contributing factors.

One way to look at the deal is that it signals a stronger commitment to recruitment on both sides. Many of the newspaper companies had been previously partnered with PowerOne Media’s CareerSite (now “nowhired.com), an under-funded and technically under-achieving effort.

And then again, the level of commitment might be questioned. No ownership interest in HotJobs or Yahoo has been provided to the newspapers; it is purely a rev share. Moreover, unlike the CareerBuilder newspapers, there are no plans to rebrand the recruitment sections of the print papers as “HotJobs” (one area where my Oct. 24 “playbook” for the deal didn’t pan out).

For its part, Yahoo’s commitment to recruitment has also been mixed. It bought HotJobs several years ago, and put a former newspaper executive in charge of it – Knight Ridder Digital’s Dan Finnigan. But given all its conflicting priorities, Yahoo was apparently never willing to put the marketing and tech resources behind HotJobs to rival Monster and especially, up-and-comer CareerBuilder.

Now, with this deal completed, Yahoo can rely on the newspapers’ listings, financial wherewithal and content, while bringing in its search technologies, reach and web 2.0 capabilities (Video, photo, calendars etc.)

Yahoo’s deal, however, is not exclusive to the newspaper consortia. Similar terms have been peddled to other recruitment sites – including those serving other newspapers. Moreover, Yahoo has made at least one independent deal with a newspaper (The San Diego Union Tribune), to extend its listings to the HotJobs site, while maintaining its own, Adicio-powered site. That deal was announced in late October. If other deals are made, the end effect may be a Google Base or Oodle-like structure, where newspapers are glad to participate, but are just one part of the equation.

Even with all these issues, it is still a very big deal. It tacitly acknowledges that search is increasingly a three horse race with Google, Yahoo and MSN; and that recruitment relies heavily on search and other technology (and I would argue, “community.”)

It also acknowledges that newspapers maintain the local clout to deliver and sell recruitment listings – and that they need to start sorting out how they can best protect their strategic interests with Google looming over them at all times – even as they keep good relations with Google on other fronts.

Some newspaper execs have been openly musing how they can work with Yahoo to start “monetizing” their content, getting it read across the country with better SEO, and perhaps putting together premium content packages. Newspapers are still mostly focused on their content, even with all the other value areas they participate in. Some of the attachment is undoubtedly sentimental; while some of it is based on the idea that content is what is still unique about newspapers.

All this can happen. The deal can become much, much bigger. But first, Yahoo will want to see how the newspaper industry – widely perceived as under-performing partners in other deals – can deliver in recruitment. And vice versa.