Yahoo joins hands with major newspaper groups

Internet giant, Yahoo Inc., has joined hands with major newspaper groups as per reports coming in this Monday. The agreement to share online advertising, technology and content involves 176 regional newspapers, which would be using Yahoo’s classified section from December 2007 onwards.

The alliance was established almost five months ago, and more additions are being made to it, with five more companies added to it recently, including McClatchy Co. the third largest newspaper circulation wise.

These five new newspaper companies coming into the alliance takes the total to 264 newspapers nationwide which is a major increase from last November. The newspapers will be putting up more of their news and stories through Yahoo, in order to increase traffic on their websites.

Although, the exact financial details are not disclosed, newspaper companies expect a major increase in their revenues next year on internet news. The coalition is being seen as an effect of falling advertising revenues in print media since much of advertising budget is being spent online. According to last year’s statistics, spending on print advertising fell 1.7 percent worldwide the year before, whereas, online advertising rose to 31.5 percent.

This newspaper pact will help yahoo in two different ways. By expanding its audience for search engine compelled advertising and also gaining in competition with rival Google Inc’s recently announced $3.1 billion acquisition of DoubleClick Inc.

It is estimated that more than 500 million people visit Yahoo websites every month. After this deal, Yahoo’s regional exposure would enhance, and the newspaper companies would gain exposure for their local advertisements and content.

This announcement of the consortium of newspapers with Yahoo Inc., has invited a lot of skepticism on the growth of the newspaper industry from the Wall street, as a result of this skepticism, sales have already gone up for Tribune Inc. and Knight Rider Inc. , the country’s second largest newspapers.

McClatchy Co. chairman Gary Pruitt said during Monday’s conference call, “This is where the momentum is, our message to other newspaper player is, ‘come on board’.” This news has provided a boost to the widely traded newspaper publishers, who are all involved in this syndicate.