The group has added five more members recently

Jun 23, 2009 14:14 GMT  ·  By

The future may not look bright for the newspaper business, and much of the blame lays with online publications and the move from paper to digital distribution. Newspapers are seeing big drops in advertising revenues, but an unlikely savior may come from the same online businesses that have so far been seen as the enemy, in this case Yahoo!.

The company has announced that five more publications, Freedom Communications’ California flagship, The Orange County Register, as well as The Gazette in Colorado Springs, the North Jersey Media Group’s The Record and Herald News, and The San Diego Union-Tribune have joined its Yahoo Newspaper Consortium, bringing the total number to 814 members, making up 51 percent of the US newspaper market by Sunday circulation.

With the partnership, newspapers supplement their usual local advertisement revenue, which has been dropping for years, with much needed ads from Yahoo!'s large network of sites and, in return, give 50 percent of the ad income to Yahoo!. The consortium has proven a big success for the online giant, but even more so for the newspapers, many of which have come to rely on that revenue. A success story is that of the Atlanta Journal-Constitution, which saw its local online reach increase from 15 percent to 85 percent of the population.

However, one piece of news is troubling many of the consortium's members, as Yahoo! is contemplating the sale of HotJobs, its online job market site, on which 592 newspapers rely exclusively for their wanted ads. Another move by Yahoo! that should worry the newspapers is the recent introduction of its Self-Serve Display Ads, mostly targeted at small and mid-size local businesses that may have traditionally used local papers for advertising.