The battle for billions of dollars in advertising on the Net heated up today as Microsoft said its CarPoint online automotive search service will be featured on five major Internet search sites.
It comes in the same week that print media giants Knight Ridder and the New York Times announced advertising-based online products. Also today, Cox Enterprises said it was gearing up to launch city sites in Microsoft's home turf in Seattle, as well as Phoenix, Orange County (California), and Hampton Roads, Virginia, bringing its total to more than 30 nationally.
The moves underscore the fierce battle that is shaping up between Internet companies and traditional media companies to capture ad revenue on the Net. In addition, the traditional media companies have to worry about losing ad dollars to the emerging medium. At stake is more than $60 billion that advertisers spent on local ads, largely in newspapers, yellow pages, and broadcast media.
Microsoft's Carpoint, along with its Expedia travel booking service, has come to symbolize the threat to newspapers. Although the software giant's move onto the Web has been met with mixed success, Carpoint and Expedia already have proven highly successful. Analysts estimate that the Net may account for more than 25 percent of U.S. car sales by the year 2000.
Yahoo, Excite, Infoseek, HotBot, and Webcrawler all will feature CarPoint in their e-commerce areas. Also today, Microsoft announced an upgrade for CarPoint that includes Kelley Blue Book pricing, side-by-side price comparisons, and expanded car reviews.
"With these agreements, we expect to more than triple the CarPoint audience," said Microsoft vice president John Neilson. The site now is getting 500,000 "unique visitors" per month, or 30,000 per day. Total daily page views comes to about 400,000, a spokesman said. The site, launched in August 1996, expects to be profitable by year's end.
"This is pretty much a torpedo at midship for the traditional newspaper industry," said Bill Bass, an analyst with Forrester Research.
As for CarPoint, "Microsoft has built a great site," Bass said. "There's not a newspaper around that can touch it." Classified ad dollars increasingly are going to "get sucked up" by sites such as CarPoint, he added, putting more pressure on newspapers.
Car and travel ads typically are among the biggest moneymakers for newspapers.
But newspapers are striking back.
Take Cox, for example, a media giant with newspapers, television, and radio stations in 25 U.S. markets. Cox Interactive Media president Peter Winter says the mission of his division is to "protect and grow" the franchise with its network of Web sites.
"The Internet is an important focus for our company because it is no longer a fad but a new medium with its own audience, just as radio had been in the '20s, TV in the '40s and cable in the '60s," said Cox Enterprises chief operating officer David Easterly in a statement.
Similar to Cox, Knight Ridder this week said it would launch a network of 23 existing Web sites, dubbed Real Cities. Knight Ridder's strategy is to stress its "intimate" knowledge of the cities through its existing newspapers and TV stations.
The New York Times also said it would launch a site by early next year, dubbed New York Today, to serve as a city site for the Big Apple.