@ Media Week: UBS: Borell: Online Reps More Than 50 Percent Of Newspapers’ Revenue Growth

One of the staples for UBS is a forecast morning chock-full of stats and this was it. On the newspaper side, lots of data from Gordon Borrell of Borrell Associates and James Conaghan of the NAA — much of it a review of what’s already out there — but what may be the most interesting item has absolutely no data behind it: Google told the NAA that the first three weeks of its newspaper test exceeded expectations for the first three months. While most major newspaper companies report low-to-mid single digit percentages of revenue from online, Borrell says that revenue represents more than 50 percent of their total growth. But, he warns, if companies aren’t seeing online ad growth of at least 38 percent, they’re losing share.
Beyond that, Borrell’s emphasis on separating online advertising sales caught my attention. His take: selling online as part of a convergence pack devalues online as a standalone product. The four questions he suggests investors ask when evaluating a newspaper company: the percent of online dollars from non-print; market share of online dollars; number of online-only sales people; percent of dollars from non-classified categories. He mentioned a media exec who was proud to have $1 million in sales but had no dedicated online ad sales people; the result was a loss in share.
— Pure play internet local share — Yahoo, Google, AOL, etc. — is up 16.7 percent while newspapers and yellow pages lose share.
Many newspaper sites are generating more revenue than the largest grossing radio station in the market. His prediction: in about two years the revenue will be as large as a radio cluster, five years as large as a local broadcasting outlet and in 10-15 years will equal or out earn the newspaper parent.

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