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Newspapers Are Fighting the Good Fight
By Patrick Riley  Fox News
Will the rise of online job ads and other classified listings deal a death blow to newspapers?

NationJobs Network Vice President Bob Levinstein predicts that "certainly within ten years" the Internet will become the dominant source for job listings. "We're going to be seeing a lot of newspaper failures over the next ten years," he adds. "They can't charge what they used to be charging for these ads, because they're not a monopoly anymore."

"It's a threat to print ads," said Kate Wendleton, president of the 5 O'Clock Club, a career counseling group.

A recent study by Forrester Research indicated that 15 percent of respondents would turn to the Internet over the newspaper when looking for a job. That's a small number, but it jumps to 21 percent for those who have been online for more than 42 months. And Forrester's prognosis is that it will continue to increase — cutting into newspapers' share of revenues.

But don't count newspapers out just yet. Charles Diederich, director of recruitment advertising for the Newspaper Association of America, said that newspapers are not sitting idly by while classified ad revenue flows to the Internet.

More than 900 of the 1,500 NAA members — North American weeklies and dailies — already have their recruitment advertising on the Web, Diederich said. That's up from 500 just six months ago.

This can't-beat-em-join-em approach was born out of necessity, he said. "Newspapers, along with other broadcast media, are contributing to the hype around the Internet, but if they didn't report on its growth, they'd be irresponsible — and if they didn't participate, then they would be irresponsible."

The Internet hype, at least in the classifieds category, is related to the low costs of the medium — something which won't last, Diederich said.

"It's cheaper now because the results aren't as great and because it's not a proven [worth]," he said. Internet job sites "are going to have to raise their rates or they're going to go out of business because none of them are making any money."

Richard Johnson, founder of, a burgeoning online employment site, argued that some sites, such as, are profitable. And others, including his own, are on the right track.

"Currently we've chosen not to be profitable in the hopes to carve out our brand," he said. "We have great expectations for being profitable in 2001. We're forecasting revenues of $15 million this year and $50 million for 2000. We're not projecting to break even until last quarter of 2000."

Part of this breaking even will include higher rates, Johnson admits. "The prices will go up, but they're not going to go up until the shakeouts happen, until the preeminent brands emerge," Johnson said.

But he said companies don't turn to the Internet for recruiting merely to save a few dollars on the cost of ads.

"Why these companies race to the Internet is not because they could save money but because their traditional methods of finding employees were failing," Johnson said. "They couldn't hire enough people."

Glenn Gutmacher, who teaches a seminar on online recruiting and is employment product manager for, agrees. "Because the unemployment rate in the country is at an unprecedented low, you have to take more drastic steps to fill the job," he said.

One reason Internet job sites have been flourishing is the robust health of the economy that is driving unemployment rates to unprecedented lows. When the economy begins to slow down and unemployment rises, Internet job sites will be challenged to prove they are not merely one-trick ponies.

"The price of energy is as low as it's been in years," said Diederich of the Newspaper Association of America. "One day we're going to have a recession. Fewer businesses will be running help wanted ads. [For] job sites on the Internet, that will be a telling moment."

Diederich predicts, however, that job sites will be beaten at their own game within five years. "Every business with, let's say 100 employees or more, will have its own job site with all its jobs listed. Why wouldn't they? It's a simple thing for them to do.

"What they will still require is a mechanism to drive eyeballs to their site — and I believe newspapers will play that role as they do now."

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