Recent examples show that making local news profitable is still a challenge.
The newspapers are dying. The model of paying lots of reporters to write news stories and then delivering it via paper to readers just won’t work anymore.
It’s true, and it has been the driving force behind a lot of geo domain activity over the past few years — the building out of city and local domain names. But in the process, it seems that perhaps geo domain owners tried to emulate the very companies they were trying to replace.
Perhaps the most well known case is SanDiego.com, which was pushed into foreclosure for failure to pay its debt. Rather than focusing on the tried-and-true directory listing business model, the web site went headlong into news and paid a lot of writers.
Another example is Kelowna.com, which tried to push into the local news business in a big way. In April it gave up:
After more than 10 months of hard work by our staff and considerable investment, we have come up short in achieving that goal.
Our local news was second-to-none for timeliness and depth, but it wasn’t enough to capture the hearts, minds and mouse-clicks of this community.
In other words, it just didn’t pay.
Although delivering news over the web is cheaper than paper, the revenue is lower, too. Ask anyone who has sold both print ads and web ads. For some reason people still pay more for paper — perhaps because they can’t calculate their ROI.
The lesson from these two examples is clear: trying to copy the dying news companies isn’t the right strategy. Keep that in mind if when you’re building out your geo web sites.
eTraveler says
IMHO you need to do both, a directory website by its self is done about 10,000 times by people who do it many times over, yellowpages.com, superpages.com.
You still need to give them a reason to go to a local website other than a directory.
Plus doesn’t google do that pretty good? and yahoo and now bing?
nice try says
I congratulate them for trying.
At least they experimented and tried new ideas as domainers.
I know they put their heart into it but not enough success came their way to keep it rolling.
Andrew Allemann says
@ nice try – I agree. I had a similar biz plan but just couldn’t figure out how I could make it work. Kudos to them for trying.
Justin Allen says
Its interesting to note that SanDiego.com is still hiring….. A job listing was posted on Monster not long ago.
Andrew Allemann says
@ Justin – will be interesting to see which direction the owner takes it.
Rob Sequin says
I think most would agree the best revenue source is from direct advertisers.
Affiliates and ad networks? Forget it.
So, maybe the content is not the problem it’s the sales department.
Look at PalmSprings.com and the Castellos. From the start they went after direct advertisers even when they had no content just the domain PalmSprings.com.
Doesn’t matter what the content is when you have a great domain name and a sales force named David Castello 🙂
I don’t know much about SanDiego.com but I would think if they had more salespeople and less writers, things may have turned out different.
Pick up the phone, hit the street and sell.
You eat what you kill!
Jon says
Ads that are content is the obvious winning biz model – hotels.com, daycare.com, even PalmSprings.com. Writing news and blogs every day seems like a very hard way to go about making a living.
Justin Allen says
Rob,
I think your right – thats why they are hiring sales guys. http://jobview.monster.com/Internet-Sales-Representative-Job-San-Diego-CA-US-88403601.aspx
Mike says
Why pay anyone in this nation when we can AND DO pay people in India and China to do it much cheaper? The cancer that is outsourcing is destroying this nation.
domain guy says
this is not brain surgery you do not pay for writers you get an rss feed and pay a monthly fee…are you telling me no one could figure this out?i figured this out in 2 days 8 yrs ago.you then have up dated news daily and weekly.the reason the castellos have advertisers is because they have type in traffic related to palm springs.all of their efforts are put into sales…not content are you telling me with nashville,palm springs up and going for 10 yrs plus earning one million a yr
domainers cannot figure this out?with a model up and standing? in addition the castellos stated on another board that they have a 90% response rate for their hotel ads on their sites.what this states domainers are all stupid and rick is right and 98%
of the commets on ricks blog are from domainers that are idiots…the truth is ugly better start getting used to it.it also shows that rick is wasting
his time and why frank stopped blogging over one yr ago which was a real tragic loss to the domain world…..
Stephen Douglas says
@domain guy
I write better than you even when I’m drunk. What was that mess you just wrote? All I was able to ascertain was that “rick is wasting his time” — So… which “rick” are you referring to, and what brilliant details is he giving, although you think he’s “wasting his time”?