Newspapers are on the nose with advertisers deserting them in droves for online according to Digital Media Wire. In Australia advertising revenue in newspapers has droppped as much as 11% for some major publishers.

The DMW claims that 2007 could wind up as the worst on record for the newspaper advertising industry, which is dealing with long-term industry changes as well as the weakened economy and housing market, In the USA the prestigious  New York Times reported on Monday that after an 8% decline in advertising revenue last year, newspapers are seeing an additional 12% drop so far this year, and financial reports issued by some recently would suggest a 14-15% decline in May.

“I think the probability is very high that there will be a number of examples of individual newspapers and newspaper companies that fall into a loss position,” Goldman Sachs analyst Peter S. Appert told The Times.

“And I think it’s inevitable that there will be closures in this industry, and maybe bankruptcies.”

While rising newsprint prices and falling print circulation have contributed, the advent of online advertising and classifieds is the key factor in the industry’s decline.

Online ad revenue at newspapers has grown 20-30% annually in recent years, but still accounts for less than 10% of total newspaper ad revenue, The Times reported.