In discussions with folks about the Google Automat story, there’s much handwringing that Google’s foray into online classified ads, if true, is bad, bad, bad news for newspapers and other media that rely on classifieds. But what about another scenario that is not necessarily so dire and which actually might be a plus? Consider a world where Google aggregates a big chunk of the classified ads and then lets publishers carry them on their Web sites. Both parties split the revenue. That’s how Google’s AdSense works now, and the model logically extends to classified ads, as well.
Taken a step further, imagine a world where a newspaper outsources all its classified advertising to Google in return for a revenue split. Although their overall revenue might be lower, newspapers could shed significant labor costs with such a move. Newspaper execs (and labor leaders) would likely cringe at such a scenario. Who wants to lose control over a key revenue stream? But it’s the Internet companies that are defining the economics of the ad industry these days.
We’re not the only ones thinking along these lines. LiveDeal, the Santa Clara classifieds start-up, announced a program today called AdShare. LiveDeal describes it as a “turn-key program that enables media companies to instantly launch branded online classifieds web sites — complete with photos, e-commerce and email capabilities — at no cost via LiveDeal’s online classifieds platform…LiveDeal creates a free media-branded classifieds web site for its AdShare partner powered by the LiveDeal online classifieds platform…pre-populated with local listings from LiveDeal’s extensive customer base. The web site includes the partner’s logo, brand and URL — e.g. “www.YourBrand.com.”
Most LiveDeal classifieds are free. But LiveDeal media partners could earn “revenue on listing upgrades and lead generation programs,'” the company said. “Media companies can instantly start cross-selling online advertising, up-selling traditional print advertisers to online listings, and enjoy new revenue streams through online pay-per-lead programs in the highly lucrative automotive, real estate and employment verticals.”
It’sa new world.