Significant Internet milestones - good and bad ones - were reached this year, which ought to make newspaper executives take serious note.

  • First, despite the dot.com bust, Internet usage and audience continues to grow. Nielsen/NetRatings says the number of people around the globe using the Internet grew 18 percent in the last year — to 241.4 million. Further, Internet activity in April 2002 compared with April 2001 showed web users going on line 18 times a month, compared with 16 a year earlier.

"The strong increases in time spent online and monthly Internet sessions go a step further to show that surfers are making more time to include Internet in their daily media diet," said Nielsen/NetRatings' Richard Goosey.

  • Second, the Media Audit reported in May that in the nation's 85 largest markets, newspapers are now reaching one-third of their audience via their online products. The Media Audit said penetration of online newspapers is about 20 percent in those markets, compared with 40-45 percent penetration for printed newspapers. The Newspaper Association of America completed a study that showed newspapers as the "No. 1 source of local news and information online…"
  • Third, the Internet has changed advertising. The Newspaper Association of America (NAA) said the drop in employment advertising in the first quarter of this year was so severe (38.4 percent) that it completely offset gains in all other newspaper classified categories. Auto classifieds were up 4.7 percent, real estate up 2.8 percent and all other classifieds were up 6.6 percent - but the employment bust was so severe that the overall classified category was down 13.6 percent. Experts universally agree that most of the employment advertising decline was caused by the Internet.
  • Fourth, real estate advertising is next on the list of revenue streams that newspapers could lose to the Internet.

The National Association of Realtors recently released a study to its members that says "the Internet has caught up with newspapers … as a preferred method of searching for homes by homebuyers."

Realty Times said: "Forty-one percent of homebuyers used the Internet as an information source, neck and neck with newspapers for the first time in history. Eight percent of homebuyers first learned about the home they purchased using the Internet, while seven percent found the home they purchased through newspapers."

Technology has dramatically changed the real estate business. Not long ago, only select agents and brokers had access to information about homes for sale. Buyers were required to sit across a desk and wait while agents parsed information out.

Today, real estate listings are widely available on the Internet, through national vendors such as Realtor.com, local or regional aggregation sites and real estate brokerage web sites.

The National Board of Realtors issued a new policy on Jan. 1, 2002 called "IDX" or "broker reciprocity." This policy requires real estate brokers who participate in regional Multiple Listing Services to share listings with each other. This enables individual brokers to post all area listings on their web sites - thus becoming virtual multiple listing services.

This is of grave concern to newspapers.

The real estate industry is learning that its customers want information via the Internet, and technology and policy now exists that enables real estate brokers to do more of their advertising directly on the Internet. It's becoming easier to buy less newspaper advertising.

Newspapers can respond by becoming the virtual MLS - some have shown great success doing so. The software is easily acquired, and the newspaper has the great advantage of having the two best promotional tools in the market: the printed and the online newspaper.

The most difficult issue is obtaining the listings from the MLS or from the individual brokers. Newspapers should take the position that the National Board of Realtors broker reciprocity policy allows brokers to freely provide their listings to an aggregation service provided by the newspaper.

Newspapers allowed the Internet to gobble up much of the recruitment/employment advertising - so much so that overall classified revenues have fallen.

More and more of newspapers audiences are reached via the Internet - and the trend likely will continue.

If newspapers are to survive and thrive, they need to make an increased effort to leverage their position as the "No. 1 source of local news and information online" to become the No. 1 provider of local advertising online.

It's possible, if we work hard enough, and have the will to win.

(Marc Wilson is general manager/ceo of TownNews.com. He's reachable at marcus@townnews.com or 1-800-293-9576.)