Recent examples show that making local news profitable is still a challenge.
The newspapers are dying. The model of paying lots of reporters to write news stories and then delivering it via paper to readers just won’t work anymore.
It’s true, and it has been the driving force behind a lot of geo domain activity over the past few years — the building out of city and local domain names. But in the process, it seems that perhaps geo domain owners tried to emulate the very companies they were trying to replace.
Perhaps the most well known case is SanDiego.com, which was pushed into foreclosure for failure to pay its debt. Rather than focusing on the tried-and-true directory listing business model, the web site went headlong into news and paid a lot of writers.
Another example is Kelowna.com, which tried to push into the local news business in a big way. In April it gave up:
After more than 10 months of hard work by our staff and considerable investment, we have come up short in achieving that goal.
Our local news was second-to-none for timeliness and depth, but it wasn’t enough to capture the hearts, minds and mouse-clicks of this community.
In other words, it just didn’t pay.
Although delivering news over the web is cheaper than paper, the revenue is lower, too. Ask anyone who has sold both print ads and web ads. For some reason people still pay more for paper — perhaps because they can’t calculate their ROI.
The lesson from these two examples is clear: trying to copy the dying news companies isn’t the right strategy. Keep that in mind if when you’re building out your geo web sites.
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