In almost every article you'll read on the topic, it's noted that newspapers still collect more ad revenue than do digital media. AdAge estimates that in 2008 newspaper ad revenue will drop 7.7% to $41.9 billion, while internet and mobile ad revenue will grow 20.9% to $26.6 billion, based on forecasts by Price Waterhouse Coopers.
It is worth noting that if these trends continue, digital ad revenue will pass newspapers before the end of 2010.
Throughout the media industry, executives are sitting up and taking notice. Lionel Barber, editor of the Financial Times, spoke of a shift in the balance-of-power of journalism; stating that the power is shifting in favor of new media. Barber believes the "mainstream press lost touch with its audience at the very moment when technology, via the Internet, was dramatically lowering the barriers to entry."
According to Barber, "the imperial status of the mainstream media - the television networks, big metropolitan dailies and lofty commentators - has been shaken. The lay-offs of hundreds of US newspaper journalists this summer are a symptom of a wider malaise."
He continued, "we are witnessing a shift in the balance of power towards new media, with wholesale repercussions for the practice of journalism."
(BTW, you can read all of his comments at Editorsweblog.org.)
The seismic shift ripping through the media world has newspaper execs who long were suspicious and hostile toward Yahoo and Google turning into avid fans. It's not really a "if you can't beat 'em, join 'em" moment. Things are much more dire than that, as in "join 'em or die."