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Newspapers To See Profit Boost From Partnership With Yahoo: Analyst

Analysts at Deutsche Bank have released a slightly surprising bullish assessment of the wide-ranging partnership between several newspaper publishers and Yahoo (NSDQ: YHOO) that was announced last November. The analysts’ most optimistic scenario, summarized by Editor & Publisher, suggests that newspaper companies could see a significant upswing revenue and profitability as early as 2009. The report cites several positive factors coming out of the deal, including increased online inventory, better ad targeting due to Yahoo’s technology and the role of HotJobs in the agreement. In one instance, Lee Enterprises (NYSE: LEE) saw a 62 percent surge in online revenue growth after launching a site with HotJobs.

The report lays out three potential scenarios:

–Online revenue at the newspapers grows at 25 percent going forward, with little help from Yahoo. Overall industry growth comes in 2012

–The partnership helps moderately, boosting online growth by 40 percent initially, before falling back down to 25 percent. Growth returns in 2010.

–Partnership performs well, and online growth ranges between 40-50 percent before dropping to 25 percent in 2011. Strong pickup comes in 2009.

Ultimately, the analysts see the middle scenario as the most likely, although they warn that an economic recession could end up derailing things.