Yahoo Inc expandes relationship with newspaper industry

Yahoo Inc. greatly expandes its relationship with the newspaper industry, announcing the addition Monday of four new publishing companies to a consortium that works with the Internet company to sell advertising online.

Photo: Yahoo Inc expandes relationship with newspaper industry

Yahoo is also broadening the scope of the venture beyond its initial phase of selling help-wanted ads. It will now integrate Yahoo's search technology across the sites of the more than 264 newspapers now in the group, which covers 44 states.

Yahoo and the publishers also agreed to share local news stories from the newspapers across Yahoo's large news network and to sell local advertising online and to use Yahoo's graphical advertising technology on newspaper sites.

The original partnership, which was announced in November, was focused on selling job-search advertising online and in print, combining the large sales forces of local newspapers with the national reach of Yahoo's HotJobs online job-search service. Specific financial terms weren't disclosed.

Since that time, four other newspaper publishers have also joined, including McClatchy Co., the third-largest newspaper company in the country by circulation; Media General Inc.; Morris Communications Company LLC; and Paddock Publications Inc.

In late March, McClatchy announced a separate deal with Yahoo to allow news stories and certain online-only material produced by four of McClatchy's eight foreign bureaus to appear on Yahoo. The companies said they would share revenues but did not provide further financial details.

The growing consortium of newspapers working together with Yahoo on advertising widens a division in the industry between those papers and Gannett Co. and Tribune Co., the No. 1 and No. 2 publishers by circulation. Tribune and Gannett have been working to form a separate national network for selling advertising online.

Gannett and Tribune are also the largest owners of CareerBuilder, a major print and online venture that sells help-wanted classified advertising. McClatchy owns a minority stake in CareerBuilder.

Seeking ways to build up their online advertising revenues is a critical imperative for newspaper companies as readers and advertisers continue to migrate to the Internet. Many newspapers have reported growing revenues from online advertising, but print advertising, which is still the vast majority of their business, has been slumping.

Last month, the Newspaper Association of America, an industry group, reported that overall print advertising at newspapers fell 1.7 percent in 2006, outweighing a 31.5 percent increase in online advertising. Total revenue edged down 0.3 percent.

The initial deal to cooperate on selling recruitment advertising last fall included Yahoo and the newspaper publishers MediaNews Group Inc., Hearst Corp., Belo Corp., Cox Newspapers, E.W. Scripps Co. Lee Enterprises Inc. and Journal Register Co.