It’s been a rough few years for the newspaper business. With the migration of readers and advertisers from print to online, and then the past year’s economic downturn and market meltdown this month, it’s hard to figure out where the fixes are going to come from. William Dean Singleton, CEO of Denver-based publisher MediaNews Group and chairman of the AP board, believes he can address the challenge presented by online media to newspapers by tying print and interactive ad sales more closely together and by relying on cooperative services from Yahoo (NSDQ: YHOO), the AP and real estate ad net Zillow. But the economy, that’s a whole other problem. I spoke with Singleton following Yahoo’s heralding of its APT display ad sales delivery and targeting system last week. During the Yahoo press conference, Singleton said he expects up to 22 percent of the privately-held company’s revenue this year will come from online newspapers, with that number reaching 50 percent in five years. Rather than looking too far ahead though, our conversation focused on the here and now.

More from Singleton on convergent ad sales and the AP after the jump.

—It’s the economy: Singleton: “The biggest thing we need right now is an improved economy, because at least 60 percent of the revenue problem we’re facing today is good-old fashioned economic recession.” In particular, MediaNews, which publishes the San Jose Mercury News and Denver Post along with 42 other papers across 11 states, is feeling some pain from a pullback in auto and real estate ads. “It was less than two years ago that some of our California newspapers were seeing 80 percent annual growth in print real estate ads. Today, it’s down 60 percent. That wasn’t structural change, that was ‘We ain’t sellin’ houses anymore because people can’t get a mortgage.’ More than half our problems today are economic and that will come back when the economy does. But a lot of it is structural. But it’s not an even comparison. If we lose $1 dollar in print, we don’t need $1 dollar to come back online. We need 30 cents. Maybe even 20 cents, because of the marginal profit that online produces.”

—Unifying print and online sales: Newspapers seem to go back and forth on the value of tying print and online ad sales closely together. These days, the consensus appears to be that convergent ad sales that combine the print and web sides together tends to dilute online spending. The reasoning is that a typical advertiser will simply cut from the print budget and shift it online, rather than spend more. And even when ad sales are separate, the print and online teams end up in competition with each other for the finite universe of local marketers. But Singleton is not buying it. “MediaNews is 100 percent on board with selling print and online together. If you go see a GM dealer in San Jose, you might say, ‘I’m going to sell you a full-page ad. Oh, you want to buy an online ad? I’ll get my associate to see you the day after tomorrow. Oh, you want mobile too? I’ll have to get another associate for that.’ We need to have well-trained sales people that goes to that dealer and says, ‘I have a comprehensive program to reach 80 percent of your demo and can target it down to a GM buyer.’ Selling it separately, which most of us did, didn’t work because you have the sales team trying to outflank each other. The print seller would say, ‘You don’t want online.’ The same would happen from the web salesman. Plus, if you go to the decision maker and say, ‘I’m going to give you a comprehensive program to market your business,’ you got a much better chance of getting face time if you have one person trying to make an appointment rather than three. Consolidated print and digital sales is the future and that’s what we’re doing at all our papers.”

—AP is the best buy I know: In addition to his CEO role at MediaNews, Singleton is also chairman of the AP’s board. So it’s not surprising that he shakes his head at member newspapers’ threats to walk away from the wire service over the forthcoming changes in the pricing structure as part of its Member Choice plan. “I’m at a loss as to what some of the members are complaining about. The AP gave $21 million in fees back to the members and they weren’t complaining before they gave it back. Now they’re complaining, I guess because it wasn’t more. Newspapers are under a lot of pressure, especially newsrooms, which have to cut their budgets. An editor asks, ‘do I cut some reporters or do I cut some AP?’ And that’s an easy answer lately. AP has become the whipping boy for an angry bunch of editors who want to blame somebody for their woes. I don’t believe a newspaper operation can function without AP. There are some who have given their notices and others who say they’re going to try to go it alone. Let somebody try to do without AP and let’s see how the readership does. The AP is the best buy that I know. It’s 5 percent of my newsroom budget, 35 percent of my newsroom content. And they just cut my rates more than 10 percent. Sounds like a deal to me.”

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