For newspapers participating in the Yahoo alliance, a key question the past few months, especially as the alliance has picked up steam, has been “What will the new direction at Yahoo mean to us?” For now, the word is, not only is the Yahoo / newspaper alliance sound, but Yahoo CEO Carol Bartz is an enthusiastic supporter.

            “Carol looks at this partnership as core to Yahoo’s future,” Hilary Schneider, a long-time newspaper executive who is Yahoo’s EVP for North America, told The New York Times in an interview published this weekend.

           The piece, neatly timed to appear shortly before the Newspaper Association of America “MediaXchange” convention and trade show kicks off March 9, says newspaper owners and publishers see the Yahoo deal as “one of the only bright spots in an otherwise horrible advertising market.” It talks of sales blitzes that generated $1 million and even $2 million in advertising at the Ventura County (Calif.) Star and the Naples (Fla.) Daily News, respectively.

            The deal “seems to be hitting the sweet spot for both newspapers and Yahoo,” said Lem Lloyd, who worked with and for Schneider at Knight Ridder Digital and is now a VP at Yahoo.

            At the same time, the article sounds two cautionary notes. Schneider points out that “in 2009, this partnership is not material” to Yahoo in financial terms, although she added that, “If you look at the long-term opportunity, it is material, and it continues to exceed our expectations.”

            And Dean Singleton, chairman of MediaNews Group, who was one of the key supporters of the alliance with Yahoo when it was negotiated and when it launched in November of 2006, pointed out that “it’s a new source of revenue” that is likely to grow, but “it is still small compared to the recessionary print declines we are seeing.”

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