According to an article that appeared in Editor & Publisher, Tribune Co.'s Newsday has abandoned AdSense in favor of an "in-house" contextual product powered by Quigo:

As more and more newspapers are embracing Google AdSense and other third-party context-based advertising, Newsday Monday announced its in-house answer.

The Newsday program, called Pay-Per-Click, allows advertisers to place ads on the Newsday Web site associated with specific sections, subject matter, or geographical areas. Unlike classic banner ads — which are usually paid by "impression," or the number of times the ad is displayed — Pay-Per-Click ads are free unless someone clicks on them.

Right now, Quigo is probably touting and pitching this to every newspaper its phone sales staff can call.

Google has historically been very generous with revenue sharing (most of the click) as a way to build out its content network. From Google's YE 10-K filing:

The increase in our operating margin in 2004 compared to 2003 (before the charge related to the settlement of disputes with Yahoo) was partially offset by an increase in traffic acquisition costs as a percentage of revenues. This is because a greater portion of our revenues in 2004 compared to 2003 was from our Google Network members’ web sites rather than from our Google web sites. The operating margin we realize on revenues generated from our AdSense program is significantly lower than that generated from our web sites. This lower operating margin arises because most of the advertiser fees from our AdSense agreements are shared with our Google Network members, leaving only a portion of these fees for us.

Despite Google's generosity, some newspapers have started to regard Google as a long-term competitive threat. Yahoo! offers Content Match, which is extensively used but not as deeply penetrated into the newspaper industry. Google recently enhanced AdSense by offering graphical ad capabilities and the ability to opt-out of certain content sites.

So-called "content pages" vastly outnumber search traffic in terms of potential ad inventory, but monetizing them has been more challenging. Because of the nature of the product, content CTRs are not as high or generally as qualified as search clicks — that's part of the reason behavioral targeting exists.

Even though content targeting hasn't been quite as effective as paid search, it's a critical source of revenue and ad inventory. Revenues generated on the Google Network through AdSense contributed almost US$490 million, or 48% of total revenues in Q4 2004.

A raft of competitors using the label "pay per call" is about to enter the marketplace and compete for business in this up-and-coming arena. The first of these new would-be competitors for Ingenio making a public push is ZiffTalk.

Another is Thinking Voice.

Call measurement firms, such as MediaTraks and those who offer "push-to-talk" services, such as eStara, are also lining up behind the idea of "pay-per-call," which is widely perceived to be a big opportunity for search and directory companies to capture a revenue premium over clicks, as well as the online advertising business of SMEs.

The market is also global and PPCall will soon be in Europe.

Pay-per-call and its progress in the market to date is on the agenda at TKG's Drilling Down on Local conference, coming up in April. Also, as I promised yesterday, more coming on this subject soon.

Thanks to SiliconBeat for pointing out Social Media + Maps site Frappr. It's fun; take a look. Also John Battelle discusses a new button from Yahoo! intended to get more content into social search content repository MyWeb.

LocalLaunch's CEO Justin Sanger several months ago wrote a column that was strongly critical of IYPs ("Internet Yellow Pages Are Dead") as destination sites. So it's very interesting that his most recent ClickZ column is extremely bullish on YellowPages.com.

What does he think makes YellowPages.com different? Sanger says: "A winning strategy that includes sales, destination, and distribution." But you can read his thoughts for yourself.

Here at the Association of Directory Publishers conference in Huntington Beach, CA, the mood seems upbeat and the independent publishers in attendance see blue skies ahead for their businesses, which offer competitive Yellow Pages directories, primarily in the United States. Jim Hail, the ADP’s chairman, set this tone with an address built on the theme of "strength" — in particular, the independent publisher segment’s strength within the directory industry. Referring to a pledge made by previous chair Ken Brock to reach revenue parity with incumbents by 2010, Hail insisted the objective remains on track. His point was that if independents grow at the current 15.4 percent pace (using ADP’s revenue estimates), they will more than double their share in five years, which would bring them to, or near to, parity with incumbents.

My question is,why is parity so important?

I wonder whether independent publishers are better offer remaining the smaller of the two U.S. industry segments. In his remarks, Hail used underdog references, portraying independent publishers as Rocky Balboa to the incumbents’ Apollo Creed (he also compared incumbents to "lumbering dinosaurs").

Being an underdog is a motivational gift from above, not to mention a powerful unifying force. Once they achieve parity, what’s the next goal? And if independent publishers surpass the incumbents in share of revenue, what meaningful distinction would then exist between the two categories? How can you position yourself as an underdog when you are just as tall and strong as the "bully" across the table.

We think parity is possible but not a given. If independents continue to outgrow incumbents indefinitely, it becomes a question of how quickly they reach parity. However, we question whether any publisher based largely in print will be generating positive organic growth beyond 2010; and sooner or later expansion reaches a point of diminishing returns. So it is quite possible that share levels could stabilize at some point in the future. Will independents reach parity before this happens? Maybe, but I’m not sure why it matters.

Ultimately, we see the parity goal mostly as a rallying cry for independent publishers to keep working, keep innovating, keep expanding and keep growing. Achieving the parity goal should not be as important as the true measures of success — sustainable growth and improving margins. Parity is about bragging rights. Business is about making money.

Classifieds provider LiveDeal, which was initially dismissed by some as being unable to compete with Google, Craigslist and eBay, has scored a major coup by partnering with Canadian media giant Torstar Corp. to launch LiveDeal Canada (site not currently available). It immediately becomes Canada's largest online classifieds site.

The company also raised additional financing. Apropos of my previous post (about companies and their end games), CEO Rajesh Navar has said that the company is in this game for the long haul.

In a separate item by David Carr, titled “Why You Should Pay to Read This,â€� the author suggests that paid content is in real danger because youth expect information to be free. They are willing to pay for the distribution vehicles â€" cable, broadband Internet and cellphones â€" but not for the stuff that comes through them.

One of the conclusions that can be drawn from these two news items is that there will always be a market for print and other traditional media, no matter how cool the latest gadget (like videopods) may be. In addition to the nearly one-quarter of adults who are “disconnected,� there are many others who are only semi-connected. Secondly, Yellow Pages, whether print or electronic, has always been free to the user. Directory assistance may be in danger but not classified advertising that brings buyers and sellers together.

Local search is most certainly going to have an impact on the Yellow Pages industry. But look for this media to outlast those that require payment for information.

Google Base (now apparently down) is a content entry system for:

• Description of your party planning service
• Articles on current events from your Web site
• Listing of your used car for sale
• Database of protein structures

This could be the entry point for the rumored Google Classifieds. It appears to be more than that, however — a kind of universal direct content entry system (for local business listings and events, classifieds content or anything else you want to show up in search results).

From Google PR:

We are testing new ways for content owners to easily send their content to Google. Like our web crawl and the recently released Google Sitemaps program, we are working to provide content owners an easy way to give us access to their content.

Think Craigslist + eBay + Upcoming.org + etc. Let's see. More on this in the Local Media Journal.

____

More from Google's official blog (not much meat here). Forrester's Charlene Li has some thoughtful comments.

What is important ultimately is how Google presents all this data that it solicits directly from users. A general search experience is not going to be as rich as a specialized, vertical experience (or a specific classifieds marketplace). And to fully leverage Google Base, Google will ultimately have to start creating Google Locals or Froogles for content-specific areas.

That will be interesting to see (if it does happen) because there's some tension there. Google doesn't want to take users off to 100 different specialized destinations — the company wants to leverage Google.com as much as possible.

Ran into Jonathan Blue of Cobalt Publishing at the ADP conference last week. He pointed out that his company, which publishes Spanish-language directories under the Enlace (Spanish for Link) brand, has moved into its largest market to date by acquiring Miami En Sus Manos and Broward-Palm Beach En Sus Manos. Cobalt has built a niche Hispanic publishing business by focusing on midsize markets with fast-growing Hispanic populations. This acquisition is a big step for Cobalt, which has so far avoided big markets. The new acquisitions have combined distribution of 250,000. TKG’s view of the Hispanic publishing market is that it is a good opportunity for a limited number of players. Cobalt has moved aggressively to own the markets it operates in, and its move into Miami through acquisition (rather than launching a me-too product) is consistent with its approach, even if the market size would appear to be a diversion from its game plan.

A bad bit of news (reg req'd) for the newspaper industry that had been using free metro dailies to reach new audiences — in theory:

While they are attracting some hard-to-reach readers, including younger and minority, they have been small gains that have had more to do with distribution strategies — such as giving papers away free in mass transit areas — than with the availability of alternative, free papers. The main effect has been that heavy newspaper readers simply read more, picking up the freebies in addition to their regular paid dailies.

But see this new effort by The Washington Post (reg req'd) — a very interesting move (video podcasts).

One thing the major dailies (e.g., The Washington Post and The New York Times) realize is that the Internet is not print. Before you say something sarcastic, reflect that newspapers have to date largely reproduced their print editions online, albeit with some dynamic features.

They will ultimately need to do much much much more to get where they need to go. And that may require all kinds of multimedia and dynamic functionality. (They don't need to become Google or Yahoo!, but they need to think and act very differently than they currently do.)

The local market is the newspapers' to lose. Next year we will either see them making strong innovations and gains or falling terribly behind. I hope it's the former and not the latter.

Caroline Little, CEO and publisher of Washingtonpost.Newsweek Interactive, will be one of the keynote speakers at ILM:05 and will address many of these issues.