Newspaper publisher, Yahoo form alliance

McClatchy Co., the nation’s third-largest newspaper publisher, will begin providing international news coverage and commentary to online powerhouse Yahoo Inc. in a partnership that further underscores the media industry’s shifting balance of power.

The deal announced Wednesday is the latest example of a long-established media outlet teaming up with an Internet leader in search of a wider audience and more revenue.

Sunnyvale, Calif.-based Yahoo already has been working to sell more online advertising with an alliance of major publishers that own more than 200 newspapers across the country. Sacramento-based McClatchy hasn’t joined that group yet.

Beginning in the second quarter, McClatchy will provide news from four international bureaus: Baghdad, Cairo, Jerusalem and Beijing. Many of the stories also will appear in McClatchy’s newspapers as well as their respective websites.

McClatchy’s correspondents also will provide exclusive information and commentary to Yahoo in less-formal blogs.

Yahoo expects McClatchy’s contributions to supplement the international news coverage that it already receives from the Associated Press, Reuters and Agence France-Press, said Neil Budde, Yahoo’s editor in chief of news, finance and sports.

Financial terms of the deal weren’t disclosed.

The new package will be branded as Trusted Voices, in tribute to McClatchy’s long history in journalism.

With roots dating to 1857, McClatchy is trying to overcome perceptions that it has become part of a dying breed as more people shun newspapers in favor of online sources such as Yahoo, which didn’t even exist until the mid-1990s.

That trend had caused many newspapers to view Yahoo and Google Inc. as adversaries, but that appears to be dissolving, Budde said. “We have gotten so big that they are starting to realize it makes more sense to work with us than shy away from us.”

Yahoo’s news section attracted 36.3 million visitors in February, more than any other website, according to ComScore Media Metrix. The combined paid circulation of McClatchy’s 31 daily newspapers averaged about 2.84 million during 2006.

McClatchy expanded last year with its $4.6-billion acquisition of Knight Ridder Inc., which was pressured into selling by major shareholders who didn’t believe the company could cope with the financial upheaval triggered by the rise of the Internet.

That deal hasn’t helped McClatchy’s slumping stock, which has plunged nearly 50% since the end of 2005. The company’s shares fell 25 cents to $31.36 on Wednesday.

McClatchy hopes some of the revenue from the Yahoo deal will help defray some of its costs for gathering international news.