Newspapers See Online Traffic Surge, Offline Circ Drop

The good news is that visits to newspapers' online sites reached a new high last quarter, with more than one in three Web users going to a newspaper site at least monthly, according to the Newspaper Association of America.

But the bad news is that paid circulation fell. At the 770 newspapers measured by the Audit Bureau of Circulation's bi-annual FAS-FAX report, daily circulation fell 2.5 percent, while Sunday circulation at 610 newspapers fell 3.1 percent, according to data released Monday.

For the newspaper industry, the findings are troubling, because the strength in online traffic might not be enough to make up for the continuing drop in paid circulation. To date, online advertising has proven markedly less lucrative than print, said Ken Doctor, an analyst with Outsell, Inc., a research firm focused on the news and information industries. "NAA is right in that there's clearly a growth online, and that growth has been substantial," Doctor said. "But ad revenue is really generated by demonstrating an ability to touch readers. They know they need to be achieving reach and duration," he said, adding that newspapers still lag in capturing eyeballs. "Users don't come often enough, and when they come, they don't stay long enough," he said.

Doctor also said that news aggregators like Yahoo News appear to fare better than online newspapers when it comes to keeping visitors on their sites. "Overall, aggregators' news time is substantially ahead of individual news sites, and the growth in their readership is quicker."

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