Wal-Mart doesn't know it yet, but it may be the savior that local newspapers have been praying for. The big-box retailer launched a new service without any fanfare last month and dubbed it Wal-Mart Classifieds. It slunk into WalMart.com's left navigation bar, where it still sits inconspicuously--a dozen links from the top of the page without a hint of its brand-new status or its potential power. Its promise is well-hidden; as of now, Wal-Mart Classifieds is a clunky marketplace with spotty listings and a poorly designed interface. But its sorry debut doesn't have to remain its destiny. Wal-Mart can use the tool to liberate newspaper balance sheets from Craigslist--the misunderstood villain of the classified industry.
At this point, it's passé to say that Craigslist has demolished local newspapers nationwide. Newspapers' classified-ad revenues climbed reliably for a half-century, beginning in 1950 and ending in 2000. Once the new millennium arrived, though, expenditures crested and started to fall like a stiff log off Splash Mountain. Last year they declined by 16 percent. Craigslist, meanwhile, watched the plummet from the observation desk, soaking up business (but not necessarily profits). Stripped of their classified revenue streams--which had especially high profit margins--newspapers were forced to start stripping their payrolls.