Internet Gateways Pose New Challenge to Online Newspapers.

By Barry Schaeffer

(reprinted from the May 1999 edition of Newspapers and Technology)

Just when the newspaper industry thought it had a handle on competition from electronic-only news and online classifieds, a new threat has emerged. The Web Gateway or Portal is a site that lures users because it acts as a convenient one-stop home page for those who don't wish to spend their time looking for and storing links to good sites. In fact the web gateway, prime examples of which include Yahoo, Excite, Go and Infoseek (we ignore AOL and Compuserve because you have to pay to be there, but they are part of the threat), is often more popular largely because of what you can get to from it than what it offers. Web gateway managers follow a simple logic; get users to make you their home page, sell ads that reach them, charge other sites for your links to them and, voile!

Actually gateway sites aren't new, many having been around for several years, but the growing interest in them is. Internet users are increasingly restive at the time and frustration involved in getting what they want from the Web. A 1998 study showed that among the reasons why users felt that their Internet usage was deteriorating, lack of time, slowing response time and difficulty in finding desired information ranked one, two and three. Enter the gateway site offering an entire shopping list of prescreened sites and links covering everything from news to classifieds to games to what-have-you. The gateway site encourages users to make it their home page, becoming the first thing visible every time the screen lights up. Users who see Excite or Yahoo when they start the web are likely to use the services and features offered there rather than building and maintaining a favorite list of their own. In TV, it's generally accepted that whomever controls the seven PM slot has eight PM to lose, and the same is true of the Internet home page. What appears first becomes the team to beat. What makes this development ominous is the fact that many gateway sites are functionally and visually indistinguishable from their online newspaper counterparts. It's arguable that gateways lure those lazy souls who are less inclined to demand and locate a specific types and sources of content. Unfortunately, however, these more impulse-directed individuals may also be the most fertile targets for the type of advertising displayed on the web and, thus, are the very readers online newspaper most want to keep for their advertisers.

So what can newspapers' online editions do to combat a loss of readers to sites that don't even compete with their core product? This is no easy question but a few indications are fairly obvious:

  1. With a few exceptions, newspapers' online editions probably can't compete head-on with the gateways; they are too circumscribed by their geographical target areas and journalistic mission, and often do not have the financial or technical resources to keep up. The maxim that "if you can't beat' em, join' em" may apply. Newspapers, while not giving up on their own online editions, must look for ways to get themselves displayed on gateway sites. This may be achieved by a number of means including their superior ability to gather and report local news. The web itself is striving for more focus on the individual user, and local news can be an important component of that effort.

  2. Newspapers that rely heavily on wire service stories for their core news product are probably in for the roughest time; often being little more than gateways themselves. These properties must take a hard look that themselves and work on building a unique product that springs from their own efforts and staff. If readers have their choice of AP and Reuters from the local newspaper's site or from a net-wide gateway, many will choose the latter.

  3. Newspapers, at least initially, may have to negotiate aggressively with gateways to get their links displayed. The wire services have done this; Reuters, AP and ABC News are seen on several. One of the likely factors in this negotiation will be the gateways' demand that online newspapers field their news product in a non-competitive format. This may mean building sites that contain stories with individual links and ads but no "gateway like" features. While it may grate on some newspapers as giving away their cache, you can't impress users who go elsewhere for their news and features.

  4. The newspaper logo, so long a given in paper journalism, must now be sold as the reason for users to select a particular news source. On many gateway sites, the source of offered news stories isn't given in the home page link display. To the extent that readers accept this "generic" news delivery, selecting news sources becomes a low-bid exercise in which he newspaper has few chips to play. Getting one's logo displayed on a gateway site may cost money but is an important part of the newspapers' claim to readers who can select any old news feed with the touch of a mouse button. Popular local columnists and investigative reporters may also be a powerful leverage with gateways. Name recognition, especially with a focus on local issues and by commentators who are not widely syndicated, can provide a useful bargaining chip in convincing the gateway to feature the newspaper's online news product. Gateways are anxious to create unique offerings that set them apart from their competitors and to the extent newspapers have something that will aid in that effort, the gateways will listen.

The rise of the gateway, another of the challenges presented by a technology moving faster than anyone ever thought it could, is reshaping the behavior of Internet users and, with it, the rules for success on the World Wide Web. Newspapers that take the time to understand these developments and respond to them in a flexible and thoughtful way will survive, even prosper because of them. Those that do not may be hearing one more nail driven into the coffin of the grand old age of paper journalism.