Papers Embrace Enemy

When it comes to the rise of Web giants like Google (GOOG Quote) and Yahoo!(YHOO Quote), newspapers are teaming up in reciting an old adage: If you can't beat 'em, join 'em.

Separate deals announced recently by both Internet companies show that major newspaper publishers across the country are forging relationships with the Web titans in hopes of tapping into the massive online advertising market that has largely left them in the dust.

That said, the willingness on the part of Google and Yahoo! to cut revenue-sharing deals with publishers that have been written off by some investors as a dying breed is evidence that daily papers, and their expensive news-gathering operations, still provide indispensable content for their local audiences.

"A core part of our investment thesis in newspapers is the growing opportunity of the Internet," says Charles Bobrinskoy, vice chairman with asset manager Ariel Capital, which has holdings in Lee Enterprises(LEE Quote), Journal Register(JRC Quote), Gannett (GCI Quote) and Tribune(TRB Quote). ...