• by Erik Sass  @eriksass1, March 16, 2007

Newspapers' online ad revenues grew 35% to $745.5 million in the fourth quarter of 2006, compared to the same quarter in 2005--accounting for 5.4% of all newspaper ad revenue in 2006, according to new figures released Thursday by the Newspaper Association of America.

For full year 2006 versus 2005, online ad revenues grew 31.5% to a total $2.7 billion. The fourth quarter of 2006 is the 11th consecutive quarter to see double-digit increases in online ad spending on a year-over-year basis. First quarter 2006 grew 34.9% to $613 million, the second quarter 33.2% to $667 million, and the third quarter 23% to $638 million.

NAA President-CEO John F. Sturm said he expects the trend to continue, as publishers grab a larger and growing share of the Web audience and discover "these sources of revenues contributing more to the bottom line."

The importance of online revenues to the future of newspapers is undeniable, given the print-online breakdown. Revenues were up 2.2% on a year-over-year basis to $14 billion, but this was due to online growth. Considered separately, print ad revenue is down 3.7% to about $13.2 billion. Overall revenue for the industry was flat in 2006, with most print categories down slightly.

Many of the losses are concentrated in print classifieds, where newspapers face fierce competition from online. Recently, online classifieds companies and newspaper publishers have begun striking deals to share some classified listings. In the last year, Monster signed an agreement with 55 newspapers--including the properties of the New York Times Company and The Philadelphia Inquirer and Philadelphia Daily News, both owned by Philadelphia Media Holdings. Recently, it added more than 200 papers in the Adicio network. And in November, HotJobs signed a deal with a consortium of 176 (now more than 200) newspapers around the U.S.