Media General Online Revs Rise; Zillow, Yahoo Help Boost Classifieds

While most of the pickup in online advertising spending this year has occurred on the national level, Media General’s Q3 earnings demonstrated how it was able to ride the ad recovery wave for its local papers as well. It helps that Richmond, VA-based Media Gen’s holdings aren’t concentrated in particularly weak local markets like McClatchy’s papers are. That’s the main reason Media Gen has been able to realize gains on display ad sales from its membership in the Yahoo (NSDQ: YHOO) Newspaper Consortium and from its separate arrangement with Zillow for its real estate classifieds. Earlier this month, Media Gen, which owns 21 newspapers, became latest newspaper chain to get into the local deals space by partnering with Groupon.

Media Gen’s partnership with Groupon is expected to start showing up on its newspaper websites by the end of the year. McClatchy (NYSE: MNI) also has a similar arrangement with Groupon.

Looking at the details of its Q3 interactive performance, the company’s local media websites saw revenues rise 15 percent. Within that segment, online classifieds grew for the third consecutive quarter, rising 12 percent, which the company partly attributed to its Yahoo and Zillow alliances. Over the past few months, Media Gen has extended the Yahoo and Zillow arrangements to its TV station sites as well as its newspapers.

While online remains the perpetual bright spot, Media Gen’s print side is struggling along with the rest of the newspaper industry, though the declines have been easing a bit this year. Publishing revenues fell 7.6 percent, mostly due to weak retail spending resulting from the weak economy. Classified revenues dropped 11.4 percent from last year, a while national ad dollars headed in the direction of a recover with a 2 percent decline.

Overall, Media Gen saw its net loss narrow considerably, thanks to continued cost cutting. Looking ahead, digital media revenues are expected to increase between 9- and 11 percent in Q4, with publishing falling another 5- to 7 percent. In total, revenues should be up around 6- to 8 percent in Q4, the company said.