INTERNET—Offline News Sources Struggling Online

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By now, print journalism was supposed to be a relic; broadcasters like Brokaw, Jennings and Rather were supposed to be dinosaurs and online journalism was supposed to be the glitzy titan of news media. Yeah, right.

Despite traffic in the millions and especially high numbers during the November presidential election none of the heavy hitters in online journalism earn a profit. Most major news sites have recently dumped staff because of profit pressures and slackening advertising revenue. But according to industry experts, a handful of sites including Tribune Co.’s latimes.com are poised to make it big online.

The layoff announcements made this month alone are, however, ominous:

-Standard Media International, publisher of the Industry Standard magazine and TheStandard.com let 36 staffers go, all from the online division.

-New York Times Digital, the Internet division of The New York Times Co., laid off about 70 employees.

-Rupert Murdoch’s News Corp. announced plans to lay off hundreds from the company’s New York and L.A. offices of FoxNews.com, FoxSports.com and Fox.com.

Disney Internet Group the online spinoff of entertainment giant Walt Disney Co. could be next. The unit has yet to layoff any of its 3,000 employees, even though it lost $217 million in the fiscal year that ended in October. As big media companies scale down their Internet divisions, they seem to be conceding that those divisions will not survive as standalone businesses and will likely play a mere supporting role.

Still, no one is talking about abandoning the Internet entirely. The question is how to maintain an online presence during a time of investor skittishness and an advertising slowdown.

“It’s dangerous to say that online journalism is going down the tubes,” said Larry Pryor, executive editor of the Online Journalism Review at USC’s Annenberg School for Communication. “We’re right at the first five minutes of the hour.”

Pryor points to sites operated by the Wall Street Journal, CNN and ESPN that consistently have high traffic and which, he said, will reach profitability by next year.

Coming into its own

“The sites that are making it have multiple revenue streams and a physical presence that complements the virtual presence,” Pryor said. “The successful sites also offer a particular brand of information that people consider valuable, whether its technology news, financial news or sports and entertainment information.”

Betty Cho, Internet analyst with Nielsen/Net-Ratings Inc., said that despite layoffs and some closings, online journalism sites actually “came into their own” in 2000.

“The Olympics and presidential elections were the best thing that could happen to news and information sites,” Cho said. “News sites proved they were up to the task of posting real-time information. As a result, more people have come to trust and rely on the Web for their news and information. The Web sites that handled these breaking events well ensured residual success.”

Latimes.com is slowly emerging as a player on the competitive field of online journalism, thanks to the established and trusted brand name of the L.A. Times print product and to the Tribune Co.-Times Mirror Co. merger.

Chicago-based Tribune Co. bought L.A. Times parent Times Mirror Co. last June for $6.5 billion.

Traffic to latimes.com skyrocketed during the month of November, when a national audience turned to the site for updates on the presidential election. The site’s unique visitors numbered more than 2.5 million, about 1 million more than the Wall Street Journal site, according to Nielsen/NetRatings.

Latimes.com General Manager Steve Barth would not disclose specific financials, but he said the site is “reasonably close to breaking even” and that revenues are projected to grow by 75 percent in 2001.

The site makes most of its money from its classified advertising section, which includes recycler.com and cars.com.

“With the acquisition by Tribune, we are under the marching orders to make this site a real business,” Barth said.

Toward that end, 20 workers at latimes.com were laid off in mid-October as part of a 12 percent cut in Tribune Co.’s Internet operations.

Also, marketing dollars were shifted from the news and content side of latimes.com to the classified side of the business, according to Barth.

“Tribune is extremely innovative in the ways that it integrates its various print, broadcast and online properties,” Pryor said. “We’re only beginning to see how they do that. Latimes.com is going to become an important part of that convergence, but it’s not something you can do overnight. They seem to be taking their time because they want to get it right.”

Indeed, latimes.com’s newly appointed editor, Richard Core, said “the excitement of the project is how to follow the equation of what works on the Internet.”

Leveraging staff

Increased traffic at latimes.com has been both a blessing and a curse for Core, who said one of his toughest challenges is leveraging the already busy print staff to break news on the site.

Core depended on L.A. Times print journalists for breaking news from Florida in November, and the site was better off for it, he said.

That blending of print talent with the Web side isn’t always seamless from a compensation standpoint, however. Some dailies have had to negotiate premium wages with print staffers who write separate stories for their newspaper’s Web site.

“At many daily newspapers, paying writers a premium to write for the Web has become an issue,” said Gary North, former president of the L.A. Newspaper Guild.

Because the L.A. Times is a non-union operation, such negotiations are a non-issue.

“It’s understood that we’re all part of the L.A. Times,” Core said. “If reporters write for the newspaper, they get put on the site. Whenever possible they can be tapped to write for the site.”

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