CHICAGO – Advertising expenditures at newspapers and their online editions fell 10 percent in the fourth quarter despite a sharp increase in online ad buys, suggesting that the industry remains troubled by a shift away from print readership and a sputtering U.S. economy.

Ad spending at newspapers and their Web sites totaled $12.6 billion in the December quarter, compared with $14 billion in the final three months of 2006, the Newspaper Association of America said Friday.

Online ad spending jumped 14 percent to $847 million, marking the 13th straight quarter of double-digit growth for Web-based newspaper ads.

However, spending for print ads in newspapers fell more than 11 percent to $11.7 billion.

For all of 2007, print ad spending fell 9.4 percent to $42.2 billion. Classified ad spending, traditionally the main strength of newspapers, plunged 16.5 percent to $14.2 billion.

Online newspaper ad expenditures soared 19 percent to $3.2 billion. Spending on newspaper Web sites rose to 7.5 percent of all newspaper ad spending, up from 5.7 percent in 2006.

Among the most-read newspaper Web sites are the New York Times, the Washington Post, USA Today, The Wall Street Journal, the Los Angeles Times, the Boston Globe, the Chicago Tribune, the New York Post and the joint site for Seattle Times and the Post-Intelligencer.

News Corp. owns the Journal as well as MarketWatch, the publisher of this report.

Tough times for some of the heaviest traditional buyers of newspaper ads – including automakers, airlines and retailers – have added to newspapers’ woes.

The newspaper industry has argued in recent years that online readership has expanded its total audience, but converting those added readers into an increase in ad dollars has proven to be complex and difficult.

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Distributed by McClatchy-Tribune Information Services.

AP-NY-03-28-08 1749EDT