Yahoo! Is the New Philly Phanatic

Stop the presses! Yahoo! (Nasdaq: YHOO  ) has landed yet another deal to help enhance a local newspaper's website with Yahoo!'s wider network of online advertising inventory. Philly.com, the online hub of privately owned The Philadelphia Inquirer, is the latest player to team up with Yahoo!.

The search engine giant's consortium of local media partnerships now covers more than 400 daily newspapers, representing a circulation of more than 21 million.

It's a good place to be for Yahoo!, with the local Internet advertising market projected to grow from $3.5 billion annually today to $12.5 billion over the next six years. Cities have come to count on their local newspaper websites to keep them up to date with the latest news, events, and job listings. Partnering with them is perfect for Yahoo! as it seeks to erode rival Google's (Nasdaq: GOOG  ) dominance in paid search.

Yahoo!'s ability to line up so many papers is impressive. Yes, newspapers with stagnant circulation growth stand plenty to gain by beefing up their interactive presence, but Yahoo! isn't the only game in town. Others are angling for a piece of that high-traffic market. Yahoo! isn't just battling the obvious search engine stars like Google, Microsoft (Nasdaq: MSFT  ) , and IAC/InterActiveCorp's (Nasdaq: IACI  ) Ask.com for handshakes. Job-listings juggernaut Monster (Nasdaq: MNST  ) is also striking similar deals.

Yahoo!'s biggest advantage is that it remains the world's most visited website. Even at the local scene, where newspaper websites are lucky to reach 10% to 20% of their markets, Yahoo! reaches between 70% and 80% of the wired locals through sticky applications like free email, search engine, and Flickr's photo-sharing site. That's a pretty impressive stat that Yahoo!'s Hilary Schneider -- executive vice president of local markets and commerce -- dished out two months ago during the Deutsche Bank Securities Media and Telecommunications Conference.

So what's black and white and red all over? All of the other search engine heavies, hopping mad that Yahoo! seems to be corralling all of the paper boys.

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Longtime Fool contributor Rick Munarriz still loves to wake up with the morning paper, even if it seems like old news. He does not own shares in any of the companies in this story, save for Disney. He is also part of theRule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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