Yahoo! is set to place contextually relevant display ads with its newspaper consortium, which now represents 40 percent of all newspaper circulation. The new AMP program for newspapers begins by the end of 3Q at the San Jose Mercury News and SFGate.

Yahoo! and the newspapers are banking big on AMP’s success. Indeed, it has been reported that Yahoo! has 800 people involved in some fashion with the consortium (something I’d like to learn more about).

Working with AMP’s behavioral capabilities, newspapers are hoping to double CPM rates, in some cases, and also see some new advertisers from Yahoo!. Analyst Ken Doctor notes in a blog post that many of the newspaper execs he talks to believes AMP is the most important part of the consortium deal.

But how big will it get? And at what point does Yahoo!’s ContentMatch search service, which is being beta tested at some newspapers, get commingled with AMP? It is hard to say. One thing that isn’t likely to happen is that Yahoo!’s search deal with Google boosts the revenue received by the consortium. Doctor, in his blog post, says the consortium deal already has a guaranteed level of revenues from ContentMatch.

If you believe at all in the “marketplace” vision of next generation commerce, it is hard to dispute that Yahoo! remains front –and- center as a verticals factory. This core strength of Yahoo!’s is especially important to note in the wake of Microsoft’s pullback from acquiring the company.

What accounts for Yahoo’s focus on verticals is the critical “engagement of advertisers and publishers” in areas they wish to target, noted VP Michael Yang, who runs autos, real estate and now health for Yahoo! “Yahoo! aspires to be the starting point of the Internet,” he said at The Kelsey Seattle conference. “We want to increase the size of the funnel at the beginning level (awareness).”

Yang argued that the company’s goal with verticals is to be #1 or #2 in each area. In the case of finance, news and sports, it is already there. “In other areas, we aspire to do that.”

Yahoo!’s traditional focus on community also informs the development of every vertical. “It is where automotive is going, and where we are taking health,” said Yang. “We are taking a truly national, centralized experience” and “trying to be holistic.” Yahoo! is also focused on “exposing new data” wherever relevant.

(This post is excerpted from an advisory written for Kelsey Marketplace clients)

Alibaba, is China’s answer to Google and Yahoo!. The online site is 39 percent owned by Yahoo and recently entered a strategic partnership with Infomedia, the second-largest Yellow Pages publisher in India.

The agreement with Infomedia provides Alibaba access to the second-largest population in Asia. The deal with Infomedia opens the opportunity to sell online advertising to its more than 750,000 advertisers and leverages Infomedia’s sales force of 650 that can immediately begin to access a wider array of India’s SMB base.

According to The Wall Street Journal, “[Alibaba’s] move into India is part of its strategy to grow globally, as a large chunk of its revenue comes from domestic trade listings within China.”

As Google, Yahoo! and MSN continue to struggle in Asia and China in particular, homegrown Alibaba and Baidu continue to prosper in Asia. By tapping into population-dense countries, both Alibaba and Baidu have set themselves up for tremendous growth as both China and India’s middle class grows at exponential rates followed closely by the rapid adoption of broadband, mobile Web access and more stable business environments.  

I use My Yahoo! as a personal portal to browse headlines within the long list of RSS feeds I’ve set up. I find it’s easy to personalize and set up news feeds, weather, e-mail, team schedules, movie times, etc.

In all this talk of “universal search,” personalized portals like this (others include Netvibes and Pageflakes) take the theme to heart that various sources and formats of content can all be browsed in one place. As we’ve argued, this model should be examined by newspapers when forming online product models to battle print usage declines. It’s the whole “if you don’t do it, someone else will” argument (and many have).

As part of this personalization experience for AT&T broadband subscribers, the site has integrated a Yellowpages.com “module” which is basically a small local search widget that users can plant wherever they want on their My Yahoo! page. This is related to the recent move that replaced Yahoo! Local with Yellowpages.com as the official local search engine for AT&T broadband subscribers (AT&T and Yahoo! have a longstanding deal to offer  broadband subscribers premium Yahoo! content including a specialized My Yahoo! page).

The widget is a nice addition and I’m likely to use it while I’m already pecking around that page for various things such as the score of today’s Red Sox game, this weekend’s weather, or what movies are playing at the pre-set theaters near me. My only complaint was that it was hard to find and was buried under a few menu items (Personalize > Content: Add Module > AT&T Yahoo! Services > Add Yellowpages.com).

A search done within the widget takes users directly to a Yellowpages.com list-view results page. This of course means additional traffic back to Yellowpages.com and more ROI potential for its advertisers. As such, this is the way IYPs should be thinking to drive traffic. A similar strategy is to launch and promote branded toolbars (which many IYPs have done), although this is a challenging proposition given limited tool bar real estate.

Other opportunities beginning to make themselves known include using their expanding ranks of video content to drive more traffic through blended search queries in popular search engines. Given the amount of upstream traffic IYPs receive from search engines, this should be considered.

Most major U.S. IYPs have great URLs (can you ask for anything better than “yellowpages.com”?) and strong brands, which amounts to a certain level of direct navigation traffic. But better SEO efforts and more toolbars, widgets and other hooks (see AgendizeMe) can drive even more users back to their sites, and to their advertisers.

Yahoo! announced that it will make a considerable change to its result pages, and the content it will allow Web sites to provide in organic listings.

According to the Yahoo! Search Blog:

Site owners will be able to provide all types of additional information about their site directly to Yahoo! Search. So instead of a simple title, abstract and URL, for the first time users will see rich results that incorporate the massive amount of data buried in websites — ratings and reviews, images, deep links, and all kinds of other useful data — directly on the Yahoo! Search results page.

Yahoo! calls out Yelp specifically as being a beneficiary of this move, in being able to have direct links to its reviews for specific businesses when searches are done for those businesses (users are a primary beneficiary too). Yelp’s deep review content currently makes it very SEO friendly and it often does rank well in result pages for local businesses with lots of reviews.

But what’s different about this is the structured presentation of organic listings, in the spirit of the “blended” search results users are coming to expect. In that way, this is yet another move toward universal search, blended search, whatever you want to call it. I’ll be at SMX West tomorrow where Yahoo! has a big presence, and I’ll find out as much as I can.

Before & After (care of the Yahoo! Search Blog):

The 19-company Yahoo! newspaper consortium is set to launch beta tests with two newspapers of Content Match, an AdSense-like product. The beta tests are expected to be followed by a launch throughout the entire consortium in September, according to Lee Enterprises VP of Interactive Media Greg Schermer. Schermer, a frequent spokesperson for the consortium, made his comments during a panel discussion at the NAA Marketing Convention this week in Orlando.

While there has reportedly been some tension in the consortium as many newspapers sought shorter terms and opt-in, opt-out rights — and some newspapers missed deadlines — Schermer reflected on its overall progress. The consortium has imposed a real discipline on the newspapers that are participating, and they have improved their response rate, commitment and time to turn around, he said.

It is also making money. Lee, for instance, raised its online rates for recruitment by fivefold. “We thought we’d get more pushback from customers,” but the value of the technologically superior platform, and improved traffic volume, has quickly proved itself, he said.

The consortium deal has always been about much more than HotJobs, Schermer added. “We signed with Yahoo! because we thought there were other possibilities.”

And in fact, three additional contracts have been signed since HotJobs – a graphics ad (i.e., banner) alliance, which he predicted would lead to a national network; a shared content deal across Yahoo! that inserts newspaper headlines and other content into many Yahoo! channels; and the new Content Match product.

As Yahoo! and the consortium have gotten to know each other better, they have gotten the deals done much faster. The HotJobs deal took 18 months to negotiate. That’s not surprising, since there were 18 sets of customers that overlapped. The consequent deals took six months. The consortium has also brought greater commitment to online and discipline among its newspaper members.

But it hasn’t always been easy. “The toughest thing is the data handling,” Schermer said. “It required lots of heavy lifting by the IT staff. Another challenge was setting up financial reporting across the 19 participating companies. There are three, five accounting firms involved,” he noted. Creating an outbound telemarketing team was also a challenge. “[Rival] CareerBuilder is the gold standard.”

But the ease of pricing and training turned out to be a pleasant surprise. Going forward, Schermer expects to see future deals with the consortium to be “less formalistic and more flexible.” The work in developing the Yahoo! tie was also used to good effect in the consortium’s real estate deal with Zillow, which has required data standards to be set for listings, premium listings and EZ Ads.

Schermer did not discuss, however, why the consortium is working with Zillow instead of Yahoo! for real estate, which would appear to have been logical, given the broad relationship. Conflicting reasons have been provided by insiders.

A new national newspaper network has been set up by Gannett, Tribune, New York Times Co. and Hearst Newspapers, representing 37 of the top 40 U.S. markets.

The network, Quadrant One, will compete (or extend) McClatchy’s RealCities; the NAA’s National Newspaper Network; Centro, which is independently run and includes a wide range of local media; and Yahoo!, which trickles down its display advertisers to its consortium members.

Smaller papers link up via the Suburban Newspaper Network and TownNews’ Dot Connect Media. Other efforts include BlackBox Media, a boutique agency working with a number of mid-tier papers.

QuadrantOne has apparently been in the works for a year. While its reach is impressive, two of the owners’ premier titles — Gannett’s USA Today and The New York Times’ flagship – are excluded. As “national” titles, they’d presumably compete for the same advertising.

Mostly, the effort seems like an extension of Tribune’s titles, which have been selling as a national buy for some time. Two executive leaders – Interim CEO Dana Hayes and VP of Sales Donna Stokley – are longtime veterans of Tribune.

BlackBox Media’s David Teitler, a longtime national ad exec for newspapers, is supportive of the national network concept. Media are still too hard to buy. But he is concerned that there aren’t other types of local media companies involved beyond newspapers – “a silo within a silo.”

He also wonders if “there is a strategic objective in place beyond ‘smiling and dialing’ to sell into top agencies. What is the strategic objective in the next three to five years?

“Is it to provide proof that local online media helps marketers achieve their brand and commerce goals better than other media options?” he continues. “What is the inflection point between brand and commerce that local online media can do better than anyone else?”

This morning I noticed something vaguely different about Google. Just like when a friend or significant other changes something like a haircut, and you get an overall sense that something is different but you can’t pinpoint it.

Finally I saw that a “Photos” tab had joined the standard “Web,” “News” and other top spots after I had logged in to Gmail. This might not be new, but it’s the first time I’ve seen it. After clicking this, I was taken to a sign-up screen for the Web version of Google’s Picasa photo organizer.

Picasa Web Albums was launched in 2006 for Picasa users to upload photos where they can “live” and be shared online. For Google, the product accomplishes a few things.

1. This is one of the many free products from Google that increase its general stickiness and thus traffic (traffic that is monetized in other ways). Google’s reach and registered users position the product better than the competitive iPhoto.

2. It pushes Google further down the path of being a content generator rather than just a raw indexing and search machine. Similar efforts that involve users contributing original content include Google Base and user reviews in Google Maps. Through these efforts, it’s very slowly becoming more like Yahoo!.

3. Speaking of Yahoo!, Picasa Web sharing is a clear shot at Flickr. Flickr is a great product with a commanding market share lead among photo sharing services. But given Yahoo!’s highly public trials and uncertain future, registered users of its various products could be uncertain themselves.

For this reason (and point No. 2), Could Google be pushing Picasa as an opportunity to convert some users with the implicit appeal of a stronger overall brand and an attractive product set (see point No. 1)? If it isn’t, this still brings up an interesting strategy that we could see Google execute in other ways over the coming weeks.

Newspapers increasingly see an opportunity to sell SEO/SEM solutions to local advertisers. Such efforts probably began in earnest last year with members of the Yahoo! consortium using Yahoo!’s platforms. Others have been working with WebVisible and other resellers on a custom basis. But things seem to have been heating up, prior to the NAA Marketing conference in Orlando at the end of the month.

Some high-profile (and well-respected) industry execs have recently left their posts and are apparently consulting to the newspaper industry on local solutions. Scripps Interactive VP Bob Benz and former Belo Interactive President Wes Jackson have teamed up with former WebVisible employees Chris Tippie and Charity Huff to sell solutions via a recently formed company named Maroon Ventures. Tippie, 36, left WebVisible one-and-a-half years ago to move to Crested Butte, Colorado, a resort town that is now headquarters for the company.

Maroon already claims to provide “daily operational oversight” of the far-flung Yahoo! consortium to 21 of its members, including Hearst, E.W. Scripps, Philadelphia News Holdings, Media General, Lee Enterprises, MediaNews Group, Cox Newspapers, New York Times Regional Group, Belo, McClatchy and Morris Communications. It also claims a relationship with Metrix4Media, a little-known search firm in which Hearst has a financial stake.

In a press release, Maroon is described as “a professional services firm that connects emerging business opportunities with media companies to help them execute in local markets. Its members draw on extensive operational and strategic experience to drive innovation throughout the business lifecycle.”

Looking at the big picture, we’re pondering Yahoo!’s role in newspaper SEO/SEM. If the deal with Microsoft is consummated, is the consortium solid enough to convey? After all, it was mostly founded to partner with HotJobs, which accounts for the bulk of the deal’s revenue. But banner advertising, behavioral targeting and SEO/SEM are also being added on a tiered basis with some of the consortium members.

Basically, the Yahoo! consortium is entirely a pick-and-choose affair. And sometimes it won’t even end up with Yahoo!. Last year, for instance, in real estate, it chose to work with Zillow.

Theoretically, a combination between Yahoo! and Microsoft and its aQuantive properties would aid the display piece, which is highly coveted by newspapers – especially in building creative capabilities. But that will probably be treated separately from the search equation, where newspapers might want a more independent role.

WebVisible head Kirsten Mangers won’t comment on the development of Maroon Ventures. But she tells us her company has had some success with newspapers in selling SEO/SEM solutions, especially for new advertisers that haven’t previously worked with newspapers. WebVisible has ongoing relations with companies such as MediaNews Group, McClatchy and New York Times and some Gannett-owned properties.

Mangers says the company does best when substantial sales and marketing resources are provided to the partnership. Strong results are being recorded in markets such as Minneapolis, where a dedicated salesperson has been allocated to The Star Tribune. Traditional newspaper sales reps tend to have a hard time focusing on the new SEO/SEM opportunities, due to the fact they carry so many products in their bag, she notes.

Mangers adds that newspapers may be working with several different vendors … even at the same company. Freedom Interactive President Michael Mathieu notes that The Orange County Register, for instance, works with both RHDinteractive’s LocalLaunch and WebVisible. “There is no ‘approved’ vendor” for the industry or for the consortium, she says.

Ultimately, Mangers expresses confidence that her 64-person company has the software, know-how and commitment to be a strong contender in the space. Several newspapers and Yellow Pages companies have gone with other solutions only to come back to WebVisible, she notes.

Other newspaper execs have left their companies also to provide consulting, although they have not specified that they’ll zero in on SEO/SEM solutions. These include MediaNews Group VP Teresa Lawler and Maine Today President Joe Michaud. Similarly, longtime Tribune Interactive head Tim Landon has left Tribune — but that probably has more to do with the change in Tribune’s ownership.

Amid all the noise about Microsoft and Yahoo!, one of the unanswered questions has to do with MS’ intent toward the recruitment business – a business that actually has some relationship with Microsoft’s core enterprise solutions (as opposed to its less established interests in social networking and arguably, search).

As Ken Doctor points out, HotJobs comes as part of the package when you buy Yahoo!. As recently as June 2007, however, Microsoft acquired a 4 percent share in rival CareerBuilder – probably to cement its technology and advertising ties with the site, and with its owners: Gannett, Tribune and McClatchy.

Is a rollup of CareerBuilder and HotJobs possible? Alternatively, would Microsoft opt out of its interest in CareerBuilder, and instead form a duo with Monster, an independent, publicly owned entity with its own newspaper ties? Indeed, just thinking of Microsoft in the recruitment space makes me wonder: Should local media concerns be owning these incredibly complex, technology-driven verticals?