This isn't officially confirmed, but Yahoo! is apparently close to finalizing a major deal that would pair its lagging HotJobs recruitment site with a consortium of "non-CareerBuilder" newspapers. The deal has been in the works since at least July. Apparently, it has become a high priority for new Yahoo! listings head Hilary Schneider, who was recruited from the embers of Knight Ridder, where among other things, she oversaw the company's share of CareerBuilder.

A deal would help ease the doldrums that have seized Yahoo!. Since this summer, the portal has been hit with a mountain of bad news. Its contextual search service has suffered delays, it has entered a sales slump, it suffered a bad earnings announcement, it lost market share to Google, and it "lost" YouTube to Google.

Leading the newspaper side has been Dean Singleton and his lieutenant Eric Grilly at MediaNews Group. MNG has been emboldened by its takeover of The San Jose Mercury News and some of the other former Knight Ridder properties — and its apparent inability to buy into the CareerBuilder consortia.

My source told me that as many as 12 newspaper companies have been involved with the negotiations, but as few as six may end up participating. At this point, contracts haven’t been signed.

One can assume that none of the CareerBuilder owners (Tribune, Gannett, McClatchy) will "quit" the alliance to join HotJobs. Then again, some of CareerBuilder's affiliates might. One source told me that "Dean Singleton is the ultimate pragmatist." This source could envision that Singleton would always seek as broad a distribution for his want ads as he could: even putting ads on Monster.

HotJobs has been led by Dan Finnigan, a predecessor of Schneider's at Knight Ridder. It isn't clear if he will remain in charge. Whether it is Finnigan or someone else reporting to Schneider, the effort will hinge on the ability to leverage the promotional might of newspapers and their online/offline synergies.

Here's the playbook to level the playing field with CareerBuilder and Monster (if the deal is completed). The first thing they are likely to do is to re-brand newspaper recruitment sections as "HotJobs." CareerBuilder has done the equivalent. The second thing they'll do is build up a national presence, probably taking out expensive national ads and other marketing. HotJobs hasn't been a contender in this area.

Over time, they might go "a step beyond" by integrating newspaper and Yahoo! content — a step that could lead to an even broader alliance. Separately, they may also step up the site’s technology. For now, however, it is apparently "all about jobs."

In the online shopping space, the only differences between the players are on the surface, in their branding and marketing. Typically, shopping engines list retail feeds in search results on a pay-per-click basis, which means consumers find the same results from the same feeds across most of the major sites. This has created a lack of brand affinity, which leads consumers to default to the major search engines to find products to buy online or locally offline.

Pronto, the latest contender in the crowded online shopping space, is attempting to be a destination site that offers this elusive brand affinity. The site differentiates itself with a more user-centric model than those of other shopping engines. Instead of offering 100 percent sponsored listings, it includes all possible listings in its organic-style search results.

Pronto does this by taking retail feeds and also crawling the Web for retail feeds using a proprietary technology. This has allowed it to list 45 million products from 52,000 retailers, compared with the 5,000 to 10,000 retailers other shopping engines offer, says Dan Marriott, Pronto’s chief executive officer.

Limiting results to sponsored listings not only compromises the integrity of search, according to Marriott, but also limits the scope of results. As a result, most shopping engines, independent of branding, seem the same.

“I compare this to shopping at a store where two-thirds of the shelves are empty,” Marriott says.

Another problem with such sites is that retailers don’t supply feeds for items with insignificant return on investment because of the paid inclusion models the shopping engines have in place.

“Most retailers are sending a third of products to shopping engines because of ROI. They’ll list a digital camera, for example, but not the camera case or lens cover,” says John Foley, Pronto’s chief operating officer. Free inclusion in organic results, the thinking goes, will considerably boost the number of retail feeds.

The company also offers a browser plug-in that follows Web searchers to different shopping sites and alerts them if they come across a product for which Pronto has a less expensive listing. This user-centric approach is also meant to drive traffic, which Pronto can then leverage in signing paid advertisers through sponsored links it displays above and below organic results.

The company has essentially taken Google’s search engine result pages model and brought it to online comparison shopping where, Marriott contends, it makes the most sense.

The Bottom Line: Because there is a lack of effective branding in the online shopping space and most of the traffic comes from product searches on major engines like Google, it will be difficult to get users to go straight to Pronto. The company will also have to appeal to advertisers with a model that is different from what they are used to at other shopping engines. However, the model’s similarity to Google’s paid search advertising could bode well for its selling efforts.

Still, any attempted paradigm shift in online products brings significant challenges in consumer and advertiser education and marketing. On the plus side, Marriott contends the company’s unique crawling technology — a vestige of defunct search technology company Wiz Bang — would be difficult to replicate. More important, according to Foley, is that replicating this model would require other shopping engines (some owned by public companies) to take a step back in terms of the short-term revenue levels they have reached in pulling in only paid listings. So its competitive differentiation is well-protected, at least for the time being.

Hearst Corp. is listed as a lead investor in Jingle Networks' new US$30 million financing round, along with Goldman Sachs. Jingle is the two-year-old provider of 1-800-FREE411, an ad-supported, "free" directory assistance service. Other investors are repeaters from earlier rounds. They include Comcast Interactive Capital, Liberty Associated Partners, IDG Ventures Boston and First Round Capital. The new round of financing comes on top of earlier rounds, including US$26 million from Liberty Associated.

Free DA is currently something of a black hole. Most of Jingle’s new money will probably need to go to subsidize money-losing calls, while the company perfects its automation and builds up the market, market share and its targeted inventory. Many calls to 1-800-FREE411 today, for instance, do not have any advertising. In addition, many calls revert to live operators, which is good service but highly costly. Earlier this month, the challenge of building the marketplace claimed InFreeDA, the provider of 1-800-411-METRO, one of Jingle's highest-profile competitors.

Hearst's investment suggests that it might seek synergies for free DA beyond the national advertisers that currently dominate the category (and which it reaches via its magazines). Hearst's local properties include Hearst Newspapers and White Directory, an independent Yellow Pages publisher.

Hearst doesn’t have much of a track record in pulling off cross-media "synergies." The acquisition of White in 2003, for instance, might have led to a directory presence in various Hearst newspaper markets, which include Houston, San Francisco, San Antonio and Albany. But the development of such ties has been a non-starter. To this day, there is no apparent relationship between the divisions. Still, the appeal of free DA might provide another way in.

Are most of the businesses in your address books ones that you would endorse? How about the mentions in your calendar of restaurants where you are meeting colleagues? How about the businesses in your photo software that you have bothered to tag? Or the ones you mention in e-mails, various Web sites and other sources?

Generally, the answer is: "Yes. I like them. That's why I use them." And that's the premise behind Grayboxx, a new San Francisco Bay Area-based company that is "four to eight weeks" from being funded, and hopes to mine user data from a variety of sources to come up with "most popular" ratings (although in this case, "most popular" is translated as "most mentioned").

Company founder Bob Chandra thinks the system is going to prove vastly superior to the ratings and review sites, like CitySearch, Judy's Book, Insider Pages, Yelp and Kudzu. Unlike the others, he claims, it achieves a critical mass of reviews, without changing the essence of user meaning. Aside from popular categories like restaurants, most businesses on other ratings and review sites have just one or two reviews and many don't have any, he says.

True, Google Base and MSN Live Expo have gotten closer to criticial mass by aggregating reviews from several of the sites. That helps. But they don't always have enough, either.

So Grayboxx sounds like a good starting point. But by no means is it a perfect solution. Speaking personally, my Palm tends to only contain service providers, such as painters, electricians and termite killers. The only restaurants that I tend to list are a few upscale ones that require reservations — usually in cities where I travel on business, rather than where I live.

Although I have reviewed them on the ratings sites, I certainly have no need to list the Mexican restaurant that I go to every Friday night in my address book — Fidel's. I also don't list Linda's Homemade Yogurt down the street, where I finish my pigout. If you want to follow in my footsteps, gastronomy-wise, you won't get satisfaction from reading my Palm.

For that matter, I don't actually tag the names of businesses in my PhotoShop, either. The best you will get out of me is a photo outside "The Plaza Hotel" in New York, where Redford and Streisand once stood. It would be kind of an aberration for me to tag, say, a Marriott Courthouse in Overland (even though I am a proud member of Marriott Rewards).

But you got to start somewhere, right? And the Grayboxx solution is certainly inventive — assuming it doesn't alienate people by taking their address book and e-mail info — even in aggregate. The company also gets brownie points with me by hiring a marketing exec who has had some exposure to local sales — former SBC Senior Director of National Advertising Doug Threet. That's kind of unusual for a Bay Area start-up these days; hats off to them. (Innocent question: Why would a VC invest millions of dollars in a local concept company that hasn’t hired an executive or consultant without any kind of local experience, or even exposure to a local media company?)

With this in mind, I had a phone conversation with founder Bob Chandra. Chandra says I am probably atypical in my limited mentions of local businesses. In Grayboxx's early testing, most address books alone yield three-to-five businesses apiece, providing aggregated review counts of 25 to 100 for businesses in the Bay Area, where the company has been doing some prototypes. On Yelp, he says, you might see just one or two.

Chandra says his ultimate ambition is to collect a base of 50 million reviews. He also plans to go vertical, with such products as a "home contractors" page and a "business to business" page — both areas of particular strength. His goal is do an "effective job" of providing ranked results in 3,000 categories; 600 of which he hopes "to provide at least 200 recommendations."

To reach his numbers, Chandra is currently leaning heavily on a national data collector (whose identity he won't publicly reveal, but if what he told me checks out, it is an interesting one). Looking forward, he envisions a number of additional sources for data, including the aforementioned photos, but also such sources as free directory assistance queries. One imagines there is real potential with that as well.

So what do I think? The company's solution is kind of left field. And it isn't going to be nuanced enough to plan a date. Based on sheer number of mentions, you'd probably end up at Applebee's.

But Chandra disagrees. To paraphrase an old record cover, to him, basically, 50 million Elvis fans can't be wrong — especially when they are weighted with some unique Grayboxx algorithms for negative comments, etc. "Please see our correlations with quality (user rankings and critics picks)," he says. "I invite you to conduct searches against Yelp or Yahoo!."

What else do I think? Assuming Grayboxx gets the right partners, and its concept goes over, I think it may well get over the serious hump of "critical mass." And then it could be perfectly positioned to build its own review database, since it will be operating from something. I also think its chances are somewhat stronger in vertical categories, where it can go up against approaches like LinkedIn's new Yellow Pages.

I just hope it doesn't take its algorithms too seriously. This isn’t about computers. Ultimately, review sites/social networks really are about individual taste. There's nothing in Grayboxx that helps me with that. Yet.

Online classifieds revenue is OK. But since it typically represents just a fraction of a fraction of existing print dollars … you'd rather base your growth on display ads. Especially, targeted, premium-priced ads that represent "new dollars" for the company.

That's the problem with yesterday's earnings reports from several newspaper companies. To be sure, online remains a bright spot in otherwise dour earnings. 3Q growth rates for online were 21.4 percent (New York Times Co.), 28 percent (Tribune) and 50 percent (Belo). And the growth is beginning to add up. Online revenues account for 7 percent of Belo's total earnings from newspapers, for instance.

But online classifieds are cheap. They don't really approximate the value of print ads. If they are inching up in share, it means that the high-value ads aren't selling very well.

Tribune, for instance, reported during its earnings call that "roughly 80 percent" of its online revenues now come from classifieds. If that number was closer to 50 percent, it would be much healthier. In print, classifieds account for roughly 34 percent of earnings, industrywide (albeit 50 percent of profits).

Largely, the growth of classifieds' share is due to the hearty rebound of real estate advertising and fairly neutral results from recruitment and auto. (yes, the real estate market is bad. That's why Realtors are advertising again).

Perhaps the number is not as significant as it seems. It isn't exactly clear what Tribune's "80 percent" covers. Does it, for instance, include X percent from CareerBuilder, Cars.com and other verticals? I couldn't tell. Moreover, display categories such as real estate feature ads are sometimes lumped in with listings. Still, it is a concern, and suggests that the replacement of print dollars with online dollars continues to be a tough road to hoe.

Right now, major newspapers are laying off or buying out hundreds of workers, citing, as Belo did, an "Internet-centric" marketplace. Meanwhile, some of the online divisions are hiring. One newspaper that I know, for instance, is trying to jumpstart its tiny online division by hiring 80 to 100 workers. We'll see whether the revenues it produces ultimately justify the faith in online growth. Whatever the amount, it can’t be made up of "80 percent classifieds."

Canada’s Yellow Pages Group has launched its second hybrid vertical product — a mixture of magazine editorial content and Yellow Pages headings — this one for the family-care vertical. Here is a link to YPG’s press release announcing the new product. YPG’s partner in this venture, and an earlier effort in the home improvement category, is Transcontinental Media.

The product targets those in the "sandwich generation" who have dual responsibility for caring for children and aging parents. The target demographic is women in their 40s, which happens to be the core audience for Canadian Living magazine, a Transcontinental property.

TKG previewed YPG’s plans for this vertical in the July 13 edition of Local Media Journal. In that write-up, this is what YPG’s Ezana Raswork told us:

"There is a broad set of services that these people are looking for and … they need to do it remotely because some of them don't live with their parents, for example, and this just adds a degree of complexity. I've never seen a group of folks that had such a desperate need for a source to help them navigate all of this."

This just in. Verizon has OK’d the spin-off of its Yellow Pages unit, Verizon Information Services, as a separate public company. We knew this was coming, but now it is official. If you thought Verizon was an unusual name, try "Idearc."

This is from the Reuters write-up:

Oct 18 (Reuters) - Verizon Communications Inc. (VZ.N: Quote, Profile, Research) on Wednesday said its board approved the proposed spin-off of Verizon’s U.S. print and Internet yellow pages directories company to its shareholders.

The spin-off will result in a new public company, Idearc Inc. and its shares will be traded on the New York Stock Exchange under the ticker symbol "IAR," Verizon said.

I’ve been hearing more and more, and becoming more and more intrigued, by the multi-player game-like virtual world of Second Life. This Popular Science article literally dives into the phenomenon and alludes to some of its local advertising potential.

Here are a few notable excerpts from the article:

… Although no major brick-and-mortars are doing business from within SL yet, they are taking note. The banking giant Wells Fargo built its own branded island inside SL, designed to train young people to be financially responsible. Wal-Mart, American Express and Intel are looking at using SL for their corporate training. And why not? With its natural interactivity and open platform for creation, Second Life, or some­thing like it, may very well be the next generation of the Web. For example, if I was online banking in SL, I wouldn't have to browse through several static screens of text. I could just walk into a virtual bank, stroll up to a teller, and deposit real-life money the newfangled, old-fashioned way: by talking to a person …

… Rosedale says the next frontier for SL is work, not play. In the past year, several companies have built replicas of their conference rooms in SL so that far-flung employees can meet and exchange information, and even collaboratively build prototypes of real-world projects. A company called Electric Sheep recently began selling its services as a kind of virtual architecture firm. Corporations and universities pay Electric Sheep to create office buildings in SL for meetings, events and special projects. Working in SL will only become more appealing as graphics become more detailed and SL adds voice chat, eliminating the keyboard-and-bubbles bit …

This is something that takes the user interaction, characteristic of Web 2.0, to a new level. And it could likewise have the same commercialization potential for real offline businesses. This is something to watch closely for its advertising possibilities and for the sheer techno-cultural phenomenon factor.

Local online shopping site NearbyNow (which we wrote about here) is expanding. The company announced today that it will extend its service to 20 U.S. cities, including Portland, San Francisco, Virginia Beach, Tucson and Spokane. This will happen through an expanded partnership with the Westfield Group.

It also announced that its mobile search application will be available in December to receive local product information on mobile devices via SMS. The company provides a platform for shopping centers to list all their stores, product information and inventory data. NearbyNow CEO Scott Dunlap will sit on a panel at ILM:06 titled "A Look at Local Shopping Innovation."

The San Diego Union-Tribune has used Citysearch as the default city guide for its SignOnSanDiego Web site since 1999. The arrangement, one of several Citysearch struck with newspapers in that time period, gave The UT exclusive rights to sell Citysearch advertising in San Diego and also gave it default traffic whenever someone types in "San Diego" on the Citysearch home page. In return, Citysearch received licensing fees, the use of restaurant reviews and other UT/SignOn content, and some revenue share.

Such deals saw Citysearch through some lean times when it couldn't count on advertising revenues. But now Citysearch has gone in a different direction, choosing to own localized sites in every major market across the U.S. (with the exception of Washington, D.C., where The Washington Post bought exclusivity from Citysearch in perpetuity).

Come Oct. 31, The UT will launch its own homegrown city guide. Already, the two longtime partners have started selling against each other. Citysearch publicly announced its presence to the San Diego ad community a couple of weeks ago at a rooftop party for media and advertisers in the historic Gaslamp district. It also announced a new local media partner: San Diego, an upscale city magazine.

We talked to Chris Jennewein, The UT's VP for new media, about the change's impact on his company. Jennewein noted that both sides have felt increasingly constricted in their relationship. The UT hadn't been in any hurry to end the deal, however, because the switching costs were high.

Now that the break has finally occurred, Jennewein said The UT is eager to develop a truly local service that will stand out against Citysearch's "national" approach. "They have a completely different model," he said.

The new UT entertainment guide will be Open Source and will use zope.com as its primary vendor. It will also have "plenty of bells and whistles" that weren't possible using the Citysearch platform, including the integration of SignOn's new Internet radio station, and Flash audio-visual.

The end of the Citysearch deal means users won't default to SignOn from Citysearch's home page anymore. But Jennewein said that will have a negligible impact on SignOn's traffic. It accounts for "less than 1 percent" of his entertainment guide's traffic, he noted. Most of SignOn's traffic from outside the area is generated from search engines.

As to whether he is worried about Citysearch's competing sales force, Jennewein said only that he "is worried about every competitor, large and small." But SignOn is on pace for record growth in usage and advertisers.