We've put three quarters behind us in 2009, and the most recent one was merely another miserable step downward for the beleaguered newspaper industry. Total ad revenue plummeted in the third quarter to $6.4 billion for the print jockeys, a decline of 28%. This info from the Newspaper Association of America drives home the notion that conditions will only worsen for the newspaper industry. So, if you're hoping those shares of New York Times Company (NYT), Gannett (GCI) and Washington Post Company (WPO), holding your breath will leave you little more than dizzy.

Of the total advertising revenue generated in the third quarter of 2009, $5.8 million came from print, the lowest quarterly amount this year. The $623 million in online advertising sold by America's newspapers was also 2009's worst. Both are down substantially from the same quarter in 2008, when the newspapers posted print ad revenue of $8.2 million and online ad revenue of $750 million, according to NAA data. At this time last year, we lamented year-over-year declines approaching 20%. Now, we have the same feelings as ad revenue drops approach 30%.

Michael Moe knows how to make headlines: Talk about Twitter and predictably people will bite (I'm proof of that). He led the team at NeXt Up Research that calculated the value of the micro blogging service and arrived at $526 million to $674 million -- half what Twitter is generally believed to be worth.

Really?

The team estimates that Twitter will generate revenues of $114 million to $134 million in 2013. In 2014, Twitter is expected to post revenues of $126 million to $148 million. This is far more conservative than the valuation implied by the company's most recent round of venture capital investment, which puts the company's worth at more than $1 billion.

The number two search engine in the United States turned in a fantastic third quarter, far ahead of expectations. Cost-cutting, layoffs and business divestitures led to a surge in Yahoo's (NASDAQ: YHOO) profits and a 4.8% increase in share price in extended trading on Tuesday evening. Net income more than tripled to $186.1 million (13 cents per share) from the third quarter of 2008's result of $54.3 million (4 cents a share). Sales (exclusive of fees passed to partner sites) reached $1.13 billion, slightly above the $1.12 billion expected by analysts, according to a Bloomberg survey.

With the advertising market in rough shape and competition from Google (NASDAQ: GOOG) continually rising, Yahoo refocused on its core properties: the home page, messaging and mobile services. The company trimmed what it didn't need, which is why it was able to boost its earnings even with a decline in revenue. Increased ad revenue from auto manufacturers, travel companies and consumer product manufacturers also helped.

Yahoo's chief financial officer, Timothy Morse, says that the company's markets are "starting to stabilize." Of course, Yahoo itself must be doing something right: its share price is up 41% this year.

"Google (NASDAQ: GOOG) remains the dominant search engine on the web," notes Paul Tracy. In his StreetAuthority Market Advisor, he views the stock as a solid buy for growth investors.

"In economic downturns, one of the first costs most companies cut is advertising. Not surprisingly, over the past year, most companies have slashed their advertising budgets in response to the severe economic downturn.

"But online ad spending has remained remarkably resilient. GOOG's system targets specific ads based on what users type into their search box, geographic location and other factors.

The recession hasn't squashed the spirit of college athletes, it likely won't slow down the creation of office "bracket" pools, and it hasn't stemmed the tide of online ad revenue flowing into CBS Corp. (NYSE: CBS), which is nearing the end of its 11-year pact with the NCAA for March Madness broadcast rights. (The deal expires in 2013).

A week before the NCAA Tournament begins, CBS has already sold nearly all of its online ad inventory, according to The Wall Street Journal. Just 35 companies -- including Coca-Cola (NYSE: KO) and General Motors (NYSE: GM) -- have bucked up for these streaming ads.

Shares of the Washington Post Company (NYSE: WPO) are trading in the red this morning after the company reported that its fourth quarter profit dropped by a massive 77%. Net income came in at $2.01 per share, verse $8.71 per share in the same period last year.

As I noted in the earnings preview yesterday, the company's flagship newspaper and its magazine division (Newsweek Magazine) have been hit hard with losses in advertising revenue, and both had a dismal 2008 year. The company's newspaper division lost $14.4 million in the fourth quarter and had a $192.4 million operating loss for the entire 2008 year. Its newspaper division had a slight profit of $10.9 million in the fourth quarter, but on a full year basis it posted a loss of $16.1 million.

Tomorrow morning before the bell, The Washington Post Company (NYSE: WPO) will have its chance to impress Wall Street when it reports its fourth quarter numbers.

Going into tomorrow's announcement, analysts are expecting the company to show earnings on the quarter of $8.17 per share. Should the company hit this estimate, it would be a decline of 16.5% from its reported $9.79 during its fourth quarter 2007.

The most famous search engine in the world, Google (NASDAQ: GOOG), reported third-quarter numbers on Thursday after the market closed for the day. They were pretty good, all things considered. But hold on before buying the stock. Let's get to the data first.

Google saw its top line increase over 30% to $5.5 billion. On an adjusted basis, earnings per share came in at $4.92 per diluted share. That was good for only a 6% rise in the bottom line, but it did handily beat analyst estimates. According to this source, expectations were for $4.75 per share. Even better, net cash from operations soared just about 34% to roughly $2.2 billion. There's no question that Google has a good advertising model with its search-based technology. Indeed, Google is an innovative leader and a major brand on the Internet. It offers an efficient way for advertisers to target users who might be interested in their products. And it's true that an advertiser can see what it's getting for its investment. Even competing against big guns such as Microsoft (NASDAQ: MSFT), Yahoo! (NASDAQ: YHOO), and Time Warner's (NYSE: TWX) AOL, Google more than holds its own (although I'd really like to see management make better use of its expensive YouTube acquisition -- check out this article by Sheldon Liber on the subject).

Today might have been one of the more boring options expiration dates. If you pretend that technology stocks weren't a part of the market, today was rather stable considering the major bounces we have seen. Oil stayed under $129.00 per barrel, which didn't give the bears much meat to chew on. We had essentially no government economic data today. Here are today's unofficial closing levels:

• DJIA 11,496.24 (+49.58)
• S&P500 1260.65 (+0.33)
• NASDAQ 2282.78 (-29.52)
• 10YR T-Note 4.081% (+0.043%)
• 52-WEEK LOWS
• Top Analyst Upgrades
• Top Analyst Downgrades

Apple Inc. (NASDAQ: AAPL) is set report earnings after the close of trading. Read a FULL EARNINGS PREVIEW. Shares of Apple were down over 3% at $166.10 in today's final minutes of trading.

Investors don't know what to make of Time Warner Inc.'s (NYSE: TWX) results.

First, shares rose this morning as investors gave a thumbs up to Chief Executive Jeff Bewkes' plan to dispose of the media conglomerate's cable television business. Then, they fell after the earnings conference call. Perhaps investors were expecting news on a deal for AOL. Otherwise, the parent of CNN, Time magazine and Warner Brothers posted mediocre quarterly results (pdf).

"We've decided that a complete structural separation of Time Warner Cable Inc. (NYSE: TWC), under the right circumstances, is in the best interests of both companies' shareholders, Bewkes said in the earnings release. "We're working hard on an agreement with Time Warner Cable, which we expect to finalize soon."

The general sentiment is that online advertising is immune from the travails of the economy (obviously, this ignores the depression for the category in the wake of the dot-com bust). The argument is that the consumers' "eyeballs" are moving more to Web-based media.

No doubt, this is true. But, this doesn't mean advertisers won't still get skittish.

As a result, eMarketer is toning down its forecast for online ad spending in 2008. Instead of coming to $27.5 billion, the revised figure is now $25.8 billion.

OK, that doesn't sound like much. However, it could be brutal for many companies (especially small ones that rely heavily on ad spending).

Oh, and social networking sites may come under pressure too. Simply put, these sites are having a tough time getting people to click on ads (even though there are many "eyeballs").

Something else: eMarketer's revision shows how fragile the economy has become. In other words, things can certainly get worse -- and quickly.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Israeli start-up Eyeblaster announced that it has filed a prospectus for an IPO, and though not in the filing, it is believed that it is looking to raise an amount north of $100 million. Eyeblaster operates in the field of online advertising, developing technologies to manage online campaigns.

This is a space that saw seen some big acquisitions recently. Microsoft (NASDAQ: MSFT) bought aQuantive for around $6 billion, and Google (NASDAQ: GOOG), bought DoubleClick for over $3 billion. Eyeblaster has some big customers, two of them are particularly interesting. Both Yahoo (NASDAQ: YHOO) and Time Warner (NYSE: TWX)'s AOL are customers as well as players in this space.

With online advertising growth rates slowing, there is a big need to optimize marketing campaigns, and that is why we have seen consolidation in the industry. Everyone is gunning to take market share from Google and Microsoft. The planned Eyeblaster IPO will raise the stakes even higher, as it will use the money raised to continue to grow both its business and its product suite. If Eyeblaster succeeds, don't be surprised to see an AOL or Yahoo acquisition of Eyeblaster in the near future.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/12/08.

Only eight months old, the Rubicon Project has already raised roughly $21 million. In fact, today the company announced its latest infusion: $15 million. The investors include: Mayfield Fund, IDG Ventures Asia, Stanford University, University of California Berkeley, Matt Coffin (founder and former CEO of LowerMyBills.com) and Clearstone Venture Partners.

Essentially, the Rubicon Project helps companies manage the complexities of online advertising networks. The system is getting lots of traction, with more than 3,000 websites signing up.

"We are seeing huge demand," said Frank Addante, CEO and Founder, in an interview with me on Friday. "Customers also want a way to benefit from advertising networks in global markets."

I asked Frank about the concerns of a slowdown in online advertising (especially in light of the cloudy economy in the U.S.). His take? Well, he is not seeing a slowdown. "I experienced the downturn in 2001," said Addante. "That was mostly the result of dot-coms running out of money. As of now, things are different because it's traditional companies that are buying online advertising."

Interestingly enough, the genesis of the Rubicon Project's funding came from Frank's trip to Hawaii – which he wrote about it in his blog.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Many top players, such as Google (NASDAQ: GOOG), Yahoo! (NASDAQ: YHOO), and Microsoft (NASDAQ: MSFT), want to get a piece of the local online sector. But it hasn't been easy.

There are a myriad of smaller players trying to get an edge as well. One up and comer is Yodle, which recently announced that it has raised $12 million in venture capital. The investors include Draper Fisher Jurvetson and Bessemer Venture Partners.

Yodle offers a platform that allows small businesses to purchase local online ads. Keep in mind that roughly 63% of consumers now use the internet to search for local businesses.

So what makes Yodle different? Well, the company has made it possible to measure the return on investment for ad campaigns. For small businesses, this is certainly a big deal. For example, Yodle claims that a $1 ad spend can result in an $8 return.

If true, I can see why a small business wouldn't pass on this kind of thing.

Interested in more cool venture capital deals? Visit DealProfiles.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer told an audience yesterday that the world's largest software company won't stop supplying its online services with cash in light of continued losses from that business unit -- for fear of ceding the race to rivals. In other words, Microsoft won't close its billion-dollar checkbook and give the world of online advertising and services to Google, Inc. (NASDAQ: GOOG).

Is Microsoft this afraid of Google, or does it see a fundamental shift of services moving from the desktop software program Microsoft owns (like Microsoft Word) to web-based replacement services? Or, does Microsoft just want a larger piece of the advertising revenue from web search -- an area that Google dominates completely and where it has made all its money? It's a little bit of both.

Don't put anything past Microsoft, I say. The company in some ways looks like a laggard, but it has the cash (net of a tiny amount of debt) to do anything it wants. Google's cash pile is growing tall as well, so although the Microsoft-Google debate will rage on, both companies will continue sparring inside the field of internet advertising. Both have the fortitude and cash to square off for a long, long time. Ballmer is no wimp by any means, and in 10 years we could have an internet ruled by both companies if this punch-counterpunch competitive strategy continues as it has. Someone call Evander Holyfield and Mike Tyson, please.