NEW YORK, June 22 (Reuters) - They call it the World Wide Web, but newspapers trying to grow online audiences are focusing on deeper local coverage to build revenue.
The Internet gives them tools to attract new customers, which leads to a rise in advertising, said executives at the Mid-Year Media Review conference in New York this week.
To do so, newspapers have had to do more than publish the daily crime roundup or a feature on the neighborhood's latest centenarian -- they must create a forum for the community.
"Many of our sites engage in citizen journalism, community forums, story chats, reporting and other forms of interactivity," said Sue Clark-Johnson, head of the newspaper division at Gannett Co. Inc. (GCI.N: Quote, Profile, Research), which owns 90 papers including USA Today.
Publishers are touting their online operations amid greater competition from Web leaders Google Inc. (GOOG.O: Quote, Profile, Research) and Yahoo Inc (YHOO.O: Quote, Profile, Research) , which have devoted a significant part of their search businesses to cull local advertisers.
Internet job sites like Monster.com and real estate listings on Craigslist.org are also taking a bite out of traditional print revenue streams.
But newspaper executives say they are gaining ground. Readership at some Web sites hosted by Lee Enterprises Inc. (LEE.N: Quote, Profile, Research) is growing enough that their online ad rates are approaching their print rates, said Gregory Schermer, the company's vice president of interactive media.
Davenport, Iowa-based Lee publishes 58 daily papers with corresponding Web sites, mostly in smaller communities.
At Gannett's News-Press in Fort Myers, Florida, mobile journalists or "Mojos" write stories, shoot photos and manage local sections of the paper's Web site. They also run "micro-sites" dedicated to their communities.
"They have seeded and sustained community publishing that has driven significant traffic and doubled their online retail revenue," Clark-Johnson said. Advertising at Gannett's news sites has risen 43 percent since the start of the year.
READERSHIP COUNTS
By expanding their online community, newspapers hope to convince investors and advertisers that readership among all their productions is rising, despite industry statistics that most paid circulation at daily print editions is falling.
Investors and advertisers rely on paid circulation figures to gauge newspapers' health, but publishers are trying to convince them to look at total readership at the print newspapers, niche publications and Web sites.
At this week's conference, many publishers touted the Internet as a key driver of growth, but persuading Wall Street that they can make money online is proving more difficult.
"We've had a lot of success in migrating our core products to the Internet, and we're creating new ones all the time that aren't necessarily visible to the investment community," said Belo Corp. (BLC.N: Quote, Profile, Research) Chief Executive Robert Decherd. The company's publications include the Dallas Morning News and the Providence Journal
Online revenue is soaring at the rate of about 30 percent a year, but accounts for only about 5 to 7 percent of total revenue at newspaper companies, executives said at the conference.
Tribune Co. (TRB.N: Quote, Profile, Research) expects online revenue to account for 12 to 15 percent of its publishing business by 2010.
"It is truly significant if it goes beyond 10 percent because it will be a ... revenue growth opportunity that is sustainable at that point," said Belo's Decherd.
The Internet accounts for 7 percent of Belo's revenue, and 20 percent of its earnings before interest, taxes, depreciation and amortization.
"It's getting better and better every year," said Decherd.
