• Wall Street Journal, Friday, August 1, 2008 10:15 AM

Newspapers have been scrambling to sell online ads to local marketers, but the ads they are selling are often cannibalizing their print-ad revenues, industry analysts say.

Traditional media companies, including directories, believe they have an edge over Internet companies because they are based in the community. But any edge appears to have evaporated. Newspapers now control only 27% of the local online ad market, down from a 36% share in 2006, according to research firm Borrell Associates.

Local ad spending expanded at a 57% clip last year, but the big winners are Google, Local.com and other Internet companies that collectively control 53.3% of the local online ad market. Unlike papers, they sell ads that target consumers searching the Web for a particular product or service.

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