Yahoo and the newspaper consortium announced a significant expansion of their deal—and new member McClatchy, as expected after reports last week from the WSJ and LAT. The consortium now includes 12 newspaper groups with 264-plus newspapers across 44 states representing a combined total of more than 50 million uniques. The expansion talks started even before the consortium debuted with a deal to co-brand and use Yahoo HotJobs. McClatchy, a co-owner of CareerBuilder.com, will participate in everything but HotJobs. The expanded version covers:

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—Graphic ads:  The newspapers and their advertisers will use Yahoo’s ad-serving, targeting and inventory management. The release claims it creates the newspaper industry’s “most comprehensive and integrated online advertising network.”

—Ad sales: Yahoo will be able to sell inventory for the newspapers to national advertisers while consortium members can sell Yahoo’s local online inventory to local advertisers.

—Content distribution:  Newspaper content will be “fully integrated within local news modules” delivered across various Yahoo verticals. The release says “this strategic partnership paves the way for mobile distribution of newspaper content.”

—Paid search: The newspapers will integrate Yahoo’s paid search across their sites and will offer a custom toolbar.

The consortium launched last November with Belo; Cox Newspapers; The E.W. Scripps Company; Hearst Newspapers; Journal Register Company; Lee Enterprises; and MediaNews Group, Inc., adding Calkins Media; Media General; Morris Communications; Paddock Publications and now McClatchy. We should have more specifics after a conference call scheduled for 11 a.m. eastern. It also will be webcast. Release.