Major Newspapers Applying E-Business to Their Advertising

Running head: Major Newspapers Applying E-business to Their Advertising

E-business Solutions for Newspaper Advertising

Introduction

According to Business Week 176 daily newspapers are considering teaming up with

Yahoo to extend their advertise section online. What does this mean for Newspapers? Are they giving their revenues to the Internet business? All this can be answered if one pays close attention to what E-business can offer to a traditional business. E-business is a trend that many companies are following due to a competitive business market. Also the profit increase in the application of E-business has caused many large companies to adapt E-business solutions to their business functions. According to the IBM framework for E-business, E-business is an organization that connects critical business systems directly to its customers, employees, partners, and suppliers via intranets and extranets and over the Web.

Newspaper Advertising via Internet (Yahoo) is a means of E-business because it supports the premise of the value of E-business. With this new proposal, the newspapers provide advertising for corporations efficiently, effectively, and reach its customers quickly. The rapid increase in Internet usage around the world has also prompted many newspaper companies to apply the concept of E-business to their media. It is recommended that as the world moves from paper to information technology, it is important for Newspapers to tap into such a rich resource (The internet).

We recommend that Newspapers that experience a decrease in their advertising revenues should apply a E-business solutions such as the panama (a advertising software), and Yahoo advertising. Using the internet as a advertising engine allows the consumer to search for information according to their specific needs. Although, revenues are increased, and newspapers can link their customers via internet, we recommend that because online advertising is a small portion of total spending, newspaper should still invest in making their paper advertising effective and efficient. Critics have stated that paper media in time will become extinct, therfore the decision of many major newspapers using yahoo, and other websites for advertising is critical to their survival.

E-Business Solution

The e-business solution for Yahoo is a combination of business-2-business and business-2-consumer methods. Each works together to form a solution that will increase ad revenues for the internet search giant by twenty percent in the immediate future- about $125 million in the fourth quarter of this year and $600 million next year. The entire solution centers on Yahoo’s Project Panama, which is due to launch next summer.

Project Panama is designed to improve the way Yahoo matches advertisements to the subject of search queries (Holahan 2006). Because of the increase in competition for online advertising, Yahoo has been forced to come up with a concept that Google has had in place for some time now. Even though they are not the pioneers of the process, Yahoo plans to take a technical advantage over their competition by adding some features to their Project Panama that Google lacks.

So what’s the big deal? When a person visits a search engine and requests information, often times along with their results comes some advertisements that relate to the topic of their search. Consumers have been more likely to click on these links when the product being advertised is similar to their initial search. Even if the person was not looking to buy anything, the fact that the advertisement is there increases the chance that the consumer would possibly click the link to explore the product. There is big money in this search related advertising and Yahoo wants a big piece of the pie.

With Yahoo turning it’s full attention to search-advertising in 2004, the task was bigger than they initially expected, partly because Yahoo wanted the system to handle ads with graphs and video eventually, not just text (Hansell 2006). Shortly after Yahoo purchased Overture Services, the company that invented search advertising, in 2003 for $1.6 billion dollar they found out that the software that was being used to run the advertisements was riddled with problems, this prompted the development of Project Panama in hopes to corner the market on search-advertising.

While the new system is being developed and tested the old system “is straining to keep up with the search market. It is harder for advertisers and their agencies to use than Google’s and it has suffered from a series of embarrassing disruptions, leaving paying customers unable to