• The Wall Street Journal (subscription required), Tuesday, May 1, 2007 10:31 AM

News media outlets used to compete for the best stories and photographs to attract large audiences. Now, with the explosion of news on the Web, newspaper companies are competing with Web-based news pubs, bloggers and social networks. The world's reading audience may be greater, but a more fragmented ad pie means the competition for eyeballs is fiercer.

Nowhere is this more evident than in search-engine marketing, where buyers bid against each other to attract readers to their site by paying for clicks. The New York Times Co. only started doing this three years ago, but now it buys tens of thousands of keywords per year--so too, do its myriad competitors. In this free-market ad medium, the price is determined by the competition, which gets trickier for newspaper holding companies as they bid against each other.

So when a huge news story breaks, like the Virginia shootings or the dismissal of radio-host Don Imus, the bidding comes in fast and furious--and the cost keywords goes up. For example, the cost of the phrase "Virginia Tech massacre" was nearly $5 a pop a few weeks ago. Ethics aside, it shows how far publishers are willing to go to attract eyeballs. But is $5 per reader even worth it in ad revenue?

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