Forget about the Peanut Butter Manifesto; Yahoo's latest strategic foray (aside from buying Web start-ups such as Bix..but not MyBlogLog) is a deal with seven newspaper chains (which collectively own 176 newspapers that collectively have 12 million subscribers and 58 million monthly Web site visitors) to share content, advertising and technology. This comes hot on the heels of a three-month test agreement that Google unveiled earlier this month with the New York Times Co., Tribune Co., Washington Post Co. and Hearst during a three-month test period.

   These deals are getting a lot of coverage given the high-profile players involved but they should be viewed with a high degree of skepticism. How come? Well, striking deals is easy; making them work is a completely different thing. The newspaper industry, however, should get some credit for trying something different at a time when their operating and advertising models are under siege from online competitors. The big question is why weren't newspapers being as creative and aggressive much earlier?
    As for Google and Yahoo, these strategic gambits are all about attacking other advertising markets. The newspaper ad market, for example, is worth $48-billion, which makes it a juicy target for new competitors. Obviously, both sides see these deals as win-win propositions, which is why everyone is so enthusiastic . But before everyone gets too excited, let's see whether the two sides can dance with each other. At first blush, you have to ask how both sides are going to play nice given the Web is attracting more advertising while newspapers are getting less. It would be easy to suggest the newspaper industry is getting desperate so doing a deal with the devil is better than doing nothing at all. In many ways, newspapers have only themselves to blame given it has taken them so long to determine an online strategy (e.g. free content vs. subscriptions) and embrace new tools such as blogs, podcasts and RSS.
Update: Eric Jackson has a terrific "open letter" to Jerry Yang and David Filo, which suggests CEO Terry Semel needs to go. Eric recommends Susan Decker as his replacement.
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