SANTA CLARA, Calif. (at the BIA Kelsey Interactive Local Media conference): In a fairly candid but clearly promotional conversation, Mike Silver, the new executive director of the Newspaper Consortium (and its only employee), and Lem Lloyd, VP of Yahoo for the consortium, said the 800 daily and weekly papers participating in the group are making significant sales — and they’ve just scratched the surface of the opportunity.

(If you read our CIR overview two weeks ago, you’d know that already; if not, shame on you! Quit freeloading and become a client already!)

Silver started with the consortium just three months ago (after 22 years with Tribune and a well-deserved rest). For now, he said, the consortium is focusing on roll-outs of the Yahoo advertising platform, and growth in general. “My attitude is, Yahoo first. This is a big, whopping opportunity for newspapers,” he answered in response to a question from BIA Kelsey Group analyst Peter Krasilovsky. “There’s no lack of things for us to do right now with this relationship we have. While we’re focusing on Yahoo, we are looking for other opportunities. Yahoo can’t do everything. They don’t want to do everything. … Now that we have this new type of geotargeting or behavioral targeting, there are other things we can do.”

Plummeting print revenues are actually helping convince newspapers to sell Yahoo’s services, Silver said. “Because of some of the difficulties in print right now, I can’t think of a time when publishers were more receptive to making changes in what they do. Online is not just an add-on any more; in fact, it’s the future.”

Lloyd said a smallish newspaper in the United States had a one-week sales blitz on Yahoo products recently and generated $500,000 in revenue, mostly in contracts of $30,000 to $50,000. He said that while Yahoo can sell advertising nationally, newspapers can sell on a “tier two” and “tier three” level, giving as examples regional auto dealer networks (tier two) and individual auto dealers (tier three).

“There’s a great percentage of local intent” in the billions of searches and among the 150 million unique users globally a month on Yahoo, Lloyd said. “The trouble that Yahoo has had is that we don’t always monetize those pages, those views of local intent, in a meaningful way.” He said the consortium allowed Yahoo to capitalize on the 15,000 sales reps at its 800 participating newspapers to sell Yahoo and related inventory.