MediaPost interviews Vivian Schiller, senior vice president and general manager of NYTimes.com. She talks about the online innovation going on in the newspaper industry and how the Times is addressing its audience by narrow vertical categories. There are a lot of interesting ideas there.

You see a lot of enthusiasm for Internet initiatives among the papers that have positioned themselves well in new media markets. These includes the Times, Wall Street Journal, Washington Post and USA Today. That last paper recently added commenting capabilities to its news stories, and the audience appears to be responding.

The Business magazine out of the UK reports that Rupert Murdoch has succeeded in his bid for Dow Jones, paying $5 billion for the world’s most prestigious business publisher.

It’s interesting that this deal was sidetracked over issues of editorial independence rather than price. Dow has always considered the integrity of the Journal‘s news operation to be a corporate jewel and that’s reassuring. Somewhat.

Still, you can’t ignore the Murdoch legacy. He turned the NY Post into a British tabloid-style scandal sheet whose outrageous headlines are still its best-known quality. Fox News’ right-leaning, sensationalist reporting makes a lot of people in the TV news business wince. The Times of London, another Murdoch acquisition, has never regained its reputation as one of the world’s great newspapers.

Of course, the Journal already has a conservative political bent and it has done the best of any national newspaper at keeping its editorial voice relevant to changing audience tastes. But you have to wonder what the paper will look like in five years.

The International Herald Tribune reports that Journal staffers are worried about layoffs, and well they should be, given the precipitous drop in business-to-business print advertising noted in the article. IBM’s magazine and newspaper ad spending fell from $144.6M in 2004 to under $37 million last year, the article notes, citing TNS Media Intelligence figures.

Fortunately, Dow Jones has been ahead of the pack in moving its ad business online. Media Post reports that online revenues now account for 30% of Dow Jones’ total sales. There’s no question that the Journal will survive the coming newspaper meltdown. The question is: in what form?

Media Daily News analyzes NBC co-chairman Marc Graboff’s offhand comment about canceling original programming on Friday evenings and sees it as emblematic of the networks’ overall financial woes.

The networks are turning to reality TV for the same reason newspapers are turning to blogs: it’s cheap programming. The problem is that it’s also largely undifferentiated and boring after a while. Maybe hooking up with YouTube to find some new talent would be a good idea.

Newspapers’ web traffic is growing at a faster rate than overall Internet traffic, MediaPost reports. That’s a glimmer of good news in the darkening skies, but only a glimmer. The fact that 88% of online newspaper readers made a purchase online in the last six months vs. 80% overall isn’t enough of an advantage to compensate for the huge fixed cost problems that plague the major metro dailies.

The Washington Post has been more aggressive and innovative in its online strategy than any other American newspaper, but even it can’t escape the vortex that’s sucking down the major metro dailies. Print revenue was off 16% in the first quarter and that’s what you call a disaster.

The slowdown in the real estate market couldn’t come at a worse time. Sales of existing homes fell 8.4% between February and March, and that’s the steepest month-to-month drop in 18 years. As a result, newspaper real-estate classified revenue slipped 2.26% in Q207. Just two quarters ago, the growth rate was 10.5%.

Economists aren’t predicting things will turn around soon, which means that one of newspapers’ few advertising strongholds – real estate classifieds – is under assault for the foreseeable future. Recruitment and services advertising is already moving online in a big way. Where will newspapers find the markets that justify their traditionally huge margins? Real estate ads apparently aren’t the answer.

According to MediaPost, “McClatchy saw total classified ad revenue drop 12%, with automotive down 10%, real estate down 18.6% and job recruitment down 12.7%.” The company blamed the declines on market weakness, but Craigslist says business is just fine.

According to MediaPost, “McClatchy saw total classified ad revenue drop 12%, with automotive down 10%, real estate down 18.6% and job recruitment down 12.7%.” The company blamed the declines on market weakness, but Craigslist says business is just fine.