According to a New York Times story this morning, circulation across the US newspaper industry fell about 3 percent over the spring and summer compared with figures from the same period last year. The drop in paper sales is indicative of a change in the way people consume news content, shifting especially toward the Internet, where traffic to newspaper web sites has risen. Even paid online content is doing well, with the Wall Street Journal reporting over 1 million paid online subscribers, now accounting for about half of its paid circulation.

Newspapers are not taking this shift in news consumption behavior lying down. The Chicago Tribune reports that five major US newspaper publishers are considering forming a joint online ad network. Gannett Co., Tribune Co., Hearst Corp., Media News Group and Cox Newspapers are in talks to form an ad sales consortium that would, according to a Tribune source, capture seven of the top ten US newspaper markets.

The alliance would compete with the newspaper ad network that Yahoo! has been building since last November. Yahoo!'s network includes both Hearst and Cox, and has a reach of over 400 newspapers. Though Yahoo! initially formed partnerships with newspapers to push their HotJobs career classifieds service out to a broader audience, they have plans to expand to search advertising by the end of this year, and display ads sometime in 2008. Tribune and Gannett co-own chief HotJobs rival, CareerBuilder.

Cox and Hearst say that talking to the Yahoo! rivals does not signal a rift with Yahoo!. An unnamed executive at one of the Yahoo! alliance papers seemed to indicate that while papers may be pleased with the Yahoo! partnership, they're not opposed change. "Fundamentally, there is a need to make it easier to buy ad space on our Internet sites," said the executive. "Yahoo still has the best technology platform. But why shouldn't the newspaper industry have its own [ad sales] firm? Don't you want to get out and tell your own story?"