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Newspapers respond to the online onslaught

The media landscape is rapidly shifting. Newspapers and magazines have seen the writing on the wall, with over the last six months US newspaper circulation dropping 1.9% and newsweeklies also slipping fast. Classifieds – which represent almost half of newspapers’ advertising revenue – are being assailed by online alternatives. McKinsey & Co executives recently forecast newspapers will lose 20% of their classifieds revenue by 2007. This is undoubtedly too optimistic. Competition is not just coming from the online recruitment sites such as Monster.com and local city classifieds such as Craigslist. An entrepreneurial unit in eBay has established Kijiji as an independent classifieds site, with local operations around the world, including across many Chinese cities. Newspapers have been responding by buying online properties, notably Washington Post buying Microsoft’s online magazine Slate in January, and New York Times acquiring About.com in March for $410 million.

In the next phase media is focusing on the power of social networking technologies. News Corporation spent $580 million last month to buy Intermix, with the youth networking site MySpace the jewel that merited the price. This gives News Corp access to a whole strata of society who are not prime consumers of traditional media. Its Australian rival Fairfax recently spent $A39 million to acquire online dating site RSVP. Google, which is increasingly moving into media space itself, acquired mobile social networking company Dodgeball earlier this year. The future of news media – and especially its revenue models – is increasingly focused on running the networks within which people interact, rather than simply broadcasting information one-to-many. Watch this space.

For the most current insights and trends in the living networks, follow @rossdawson on Twitter!

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Ross Dawson is globally recognized as a leading futurist, entrepreneur, keynote speaker, strategy advisor, and bestselling author. He is Founding Chairman of AHT Group, which consists of 3 companies: consulting, publishing, and ventures firm Advanced Human Technologies, future and strategy firm Future Exploration Network, and events company The Insight Exchange.

Ross is author most recently of Getting Results From Crowds, the prescient Living Networks, which anticipated the social network revolution, the Amazon.com bestseller Developing Knowledge-Based Client Relationships, and Implementing Enterprise 2.0. (click on the links for free chapter downloads). He is based in Sydney and San Francisco with his wife jewellery designer Victoria Buckley and two beautiful young daughters.

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