Newspapers like to point to rising Internet sales (which on average still represent only 7 percent of their revenues) as the future salvation of their businesses. But Bay Area newspaper industry analyst Alan Mutter (pictured) warns on his blog that Google’s decision to link readers directly to the sites of the AP and other wire services will reduce the number of page views newspaper Web sites get. That will lower revenues in an area where newspapers were hoping to see growth to make up for a loss of print advertising dollars.
Mutter also notes that banner advertising, which is seen on virtually every newspaper site, is on the way out. Advertisers are paying less for banner ads because people tune them out, or literally block them out.