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Report: The Black And White Is Going Red All Over

The online ad business isn't everything newspaper publishers want it to be. A new Merrill Lynch report indicates that many print outfits will fall by the wayside, as the world gets more of its news on the Web.

"Even if the rapid [online] growth continues for the next few years, we don't see online representing over 50% of newspaper ad revenues for at least a couple of decades, suggesting that industry profit could stay flat for the foreseeable future," analyst Lauren Rich Fine wrote in a research note.

Fine projected that online revenue growth will stay in the double-digits through 2012, eventually slowing to 5 percent, while print advertising will decline 1.5 percent annually. That translates to flat-to-slightly-down cash flow for the next 20 years.

That means big publishers will have to shed depreciating assets to stay afloat, and smaller publications may die. Some publishers may abandon paper altogether, and consolidate their newsrooms while still offering local coverage in certain areas.

"We are fearful the recovery coming out of the current downturn could be even more muted as online continues to transform the newspaper's most lucrative, and most cyclical category: classifieds," wrote Fine.

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