L.A. Times rejects Pac Bell ad

In another example of how the Net is unleashing an unprecedented variety of corporate competition, the Los Angeles Times has refused to run an ad campaign from Pacific Bell for a Web site that features a yellow pages directory and editorial content because it competes with the newspaper's own Web site, CNET learned today.

Five years ago, a major metropolitan newspaper never would have imagined a yellow pages directory as a serious competitor in editorial content. But with media companies striving to establish themselves as Internet information centers, they find themselves up against a whole new battery of companies, including online directories, search engines, and even software manufacturers like Microsoft. The conflict is most clearly defined when the newspapers are asked to run ads for companies or services they now view as direct threats.

The Times is refusing to run ads for Pac Bell's At Hand despite the fact that the newspaper has a well-publicized joint marketing pact with the Baby Bell for its Internet access package.

As part of that deal, the newspaper runs ads to promote the telephone company's Net access service and gets paid if a reader signs up for it. Pacific Bell's online consumers also are directed to the Times's site for local news.

But At Hand boasts 1.2 million merchant listings and its own editorial content, and apparently the newspaper feels that this cuts too close to home. Pac Bell also said the San Jose Mercury News had rejected the ad, but a spokeswoman for the newspaper said executives weren't immediately available to confirm that.

The San Francisco Chronicle, Orange County Register, Los Angeles Daily News, L.A. Weekly, and San Jose Metro weekly all opted to run the ad, according to the phone company.

In a letter sent to At Hand last week, the Times argued that the service competes directly with the newspaper's own Web site. The newspaper said readers would be confused by the direct juxtaposition of its own in-house ads and those from At Hand. The letter also said that Times management "understood" that other papers had also refused to run the ads.

A Pac Bell spokesman said the company was "disappointed" in the decision to "freeze out" competition but could not confirm whether other newspapers had done the same. Times executives did not return phone calls.

At Hand, launched in August, features information on entertainment, health, sports, jobs, sports, and travel within California, the phone company's chief territory. It includes restaurant reviews from the Zagat Survey, maps from Thomas Brothers, and editorial content from 14 publishers, including HarperCollins, Hearst HomeArts, the New York Times Company Magazine Group, and American Express Publishing.

This is not the first time that newspapers have rejected ads from online advertisers. In August, a Web site that referred car buyers to dealerships charged that the Boston Globe refused to run its ad for fear that it would cut into the paper's own classified advertising revenue.

The rejection prompted the company's cofounder to file a complaint with the Federal Trade Commission and the Massachusetts attorney general's office.

For the same reason, the Los Angeles Times and the San Jose Mercury News last year rejected ads that pointed readers to the Net for job listings and real-estate information. Both papers have similar services.

Not every newspaper is banning such online ads, however. The Boston Herald, for example, ran the car broker's ad that the rival Globe rejected.