U.S.: real estate ad money shifting to Internet

    BEIJING, July 30 (Xinhuanet) -- U.S. newspapers have seen a significant loss of in real estate advertising because of the drop in the housing market, and because of a shift in advertising from the print medium to the Internet.

    This week Tribune Co., the No. 2 publisher by circulation, posted a 24 percent drop in the second quarter, while industry leader Gannett Co. has reported a 9.9 percent decline and McClatchy Co. reported a 19 percent decline, citing big losses in California and Florida.

    Like the housing market itself, much of the up-and-down movement in newspaper real estate advertising can be viewed as cyclical, meaning it will be weak in down markets and bounce back in the upward part of the cycle, whenever that comes up.

    But what's worrying analysts this time around is that real estate could become the next category of classified advertising — after help-wanted ads — to mark a significant and permanent shift away onto the Internet.

    The stakes are big for newspapers since classifieds are highly lucrative and make up more than 35 percent of their revenues.

    Mike Simonton, the top media industry analyst at the Fitch Ratings credit analysis service, says that currently a good 30 percent of help-wanted classified advertising is now online, while the Internet's share of real estate and auto classified advertising is lower, at about 15 to 20 percent, but poised to move higher.

    "The threats from the Internet are real," Simonton said. "Newspaper advertising should remain under pressure until newspapers are better able to address the threat of online advertising."

    Representatives of several major real estate franchisers said in interviews that many home sellers still see newspaper advertising as an essential component of selling a home, but that younger brokers, home sellers and buyers are clearly more focused on using the Internet.

    (Agencies)