As the ad recession deepens, it’s a handful of Silicon Alley Web companies that are getting one thing right that many Bay Area companies abandoned years ago: the e-mail newsletter. That’s right. The East Coast is leading the way in showing how to make money from those electronic digests of a site’s content, delivered regularly to your already cluttered in-box.

It may sound odd that space on a low-tech newsletter could be so desirable in an age of mass-market blogs, when young people increasingly rely on instant messaging, texts, and such sites as Twitter and Facebook instead of e-mail. But remember that signing up for and opening an e-mail newsletter is a much bigger commitment than passively clicking on a link that takes you to a blog post. Publishers can see how many people open an e-mail, how long they read it, and how many friends they forward it to. Advertisers eat up that kind of engagement, because it’s different, tangible, and more likely to result in an action such as making a purchase.

Web companies considering newsletters also need to respect the difference between a telemarketer call and a treat. Give the user something of value, like news of local events, restaurant openings, and highlighted reviews, as in the case of The Weekly Yelp. And don’t send it too often, either. As a result, recipients will open the e-mail, forward it, and maybe even make a purchase. The advertising will take care of itself. (BusinessWeek.com, February 25, 2009)