We've focused a lot here on the challenges facing the newspaper industry, but magazines too have a great deal of work to do if they want to compete effectively in the new, digital world.

paidContent.org conducted an interesting interview with Ann Moore, CEO of Time Inc., about the magazine giant's experiences online.

Rafat Ali: I know there was a comment you gave at one of the conferences recently, that there is a real business here in terms of the online part. What did you mean by that?

New numbers out on Internet ad revenue show an estimated 34% jump last year to a record $16.8 billion. These figures are pretty powerful, and they explain a lot of what's been going on in the media recently.

The study was conducted by the Interactive Advertising Bureau and PricewaterhouseCoopers. They had this to say about the big year:

"The continued growth in Interactive advertising is clearly based on marketers' recognition that they connect with consumers most effectively through Interactive media," said IAB CEO and President, Randall Rothenberg. "The increase underscores marketers' understanding that Interactive advertising can engage consumers, build brands and sell products and services," he continued.

Newspapers have been struggling for a while now with just how to participate in the online medium in an impactful way. 

The biggest papers have been able to fund their own, major online efforts.  The Wall Street Journal, The New York Times and The Washington Post are good examples.  However, local papers have had a bigger challenge.  Now they have a big solution. 

Partner with Yahoo!

This morning I was reading my local paper, The Record of Bergen County, N.J., and I saw the following headline:

OK. That's interesting. The Record is saying now's the time to buy a new home. I'm no economist, but I was curious because given what I've been reading about the current housing market being at just the beginning of a correction, I figured it would be better to wait until prices really come down.

The Wall Street Journal had a story today that discussed this:

Once upon a time not long ago, the front page of a newspaper was sacrosanct.

Ads would not be run there. Not even be considered.

Yesterday, came news that The Wall Street Journal plans to sell ads on page one. That followed word that The New York Times had announced plans to shrink the width of its newspaper. And today, we hear that the Chicago Tribune is considering ads on more of the front pages of its sections.

Desperation is in the air.

If anyone still needs proof that the resurgence in Internet advertising is for real, here it is: AOL's apparent decision to make its online service free!

The Wall Street Journal reports that the online service company is making a big, big bet on Internet advertising with this likely move:

The new proposal would cut roughly in half profit from AOL's sale of Internet subscriptions in the U.S. in the next three years, the forecasts show, from $1.6 billion this year to about $800 million in 2009. According to the forecasts, AOL, which has 18.6 million U.S. subscribers now, would end up with just over six million by the end of 2009.