They did not, and do not, see a collapse driven by online services. The key threat continues to be niche players such as home magazines. Newspaper publishers have responded to these challenges in many ways. Some own the niche publications, and many introduce online content and ads. The number of newspaper Internet sites increased 40 percent in 1998.
Executives continue to bemoan the loss of private-party advertising.
Simply put, seeking to identify, build and maintain the narrowly defined circulation desired by major advertisers could have harmed the classified franchise. Further, publishers induced market fragmentation by shifting their newspapers' main focus from mass reach to class reach, in effect deciding that primary readers are the educated professionals with upscale income rather than the entire community. Dailies thus are becoming the key niche product for large advertisers at the risk of losing their communities' broad classified markets. The trend represents a structural change that must be addressed. Retail moves from mass to targeted.