Yahoo Inc. is greatly expanding its relationship with the newspaper industry, announcing the addition Monday of five new publishing companies to a consortium that works with the Internet company to sell advertising online.

The Sunnyvale, Calif., company is also broadening the scope of the venture beyond its initial phase of selling help-wanted ads. It will now integrate Yahoo's search technology across the sites of the more than 264 newspapers now in the group, which covers 44 states.

Yahoo and the publishers also agreed to share local news stories from the newspapers across Yahoo's large news network and to sell local advertising online and to use Yahoo's graphical advertising technology on newspaper sites.

The original partnership, which was announced in November, was focused on selling job-search advertising online and in print, combining the large sales forces of local newspapers with the national reach of Yahoo's HotJobs online job-search service. Specific financial terms weren't disclosed.

Since that time, five other newspaper publishers also have joined: McClatchy Co., the third-largest newspaper company in the country by circulation; Calkins Media Inc.; Media General Inc.; Morris Communications Company LLC; and Paddock Publications Inc.

How it will affect The Star

E.W. Scripps Co., parent company of The Star, was among the original partners in the deal.

The collaboration brings The Star's Web readers new ways to explore the site through Yahoo searches and gives advertisers new opportunities, said The Star's Publisher and President Tim Gallagher.

He likens the change for advertisers to the difference between swimming in Lake Casitas and swimming in the Pacific Ocean.

"It opens up a global market to them," he said.

The deal also should drive more traffic to The Star's Web site, attracting readers regardless of where they live.

"We expect a lot more people from around the world to find their way to our site," Gallagher said.

And ad revenue for the company is expected to increase. The Star collects about 10 percent of its advertising revenue from the Web, Gallagher said.

That beat the industry average. Newspaper Web sites brought in 5.4 percent of all newspaper ad spending in 2006, according to the Newspaper Association of America. Online ad sales have been growing at a record pace even as newspapers struggle with slumping print advertising sales.

Web ad sales grew by 31.5 percent to $2.7 billion last year, even as overall print advertising at newspapers fell 1.7 percent to $46.6 billion. Total revenue edged down 0.3 percent.

Gallagher said the company had estimated The Star's online ad revenue could reach 22 percent to 25 percent of total advertising sales by 2012, but the new partnership could accelerate that growth.

The partnership marks a recognition within the newspaper industry that it makes more sense to work together with companies such as Yahoo than to fight them, Gallagher said.

Yahoo brings a great distribution technology for the newspapers and the newspapers bring important news content and ads to Yahoo, he said.

Yahoo working with news agencies

In late March, McClatchy announced a separate deal with Yahoo to allow news stories and certain online-only material produced by four of McClatchy's eight foreign bureaus to appear on Yahoo. The companies said they would share revenues but did not provide further financial details.

Yahoo regularly displays news from a number of outlets, including The Associated Press, Reuters Group PLC and Agence-France Presse.

The growing consortium of newspapers working together with Yahoo on advertising widens a division in the industry between those papers and Gannett Co. and Tribune Co., the No. 1 and No. 2 publishers by circulation. Tribune and Gannett have been working to form a separate national network for selling advertising online.

Gannett and Tribune are also the largest owners of CareerBuilder, a major print and online venture that sells help-wanted classified advertising. McClatchy owns a minority stake in CareerBuilder.

Star staff writer Allison Bruce contributed to this report.