Yahoo Inc. (YHOO) will work with seven newspaper groups to share online advertising in a deal that could help newspapers tap into the lucrative online ad market.

A total of 176 newspapers in 38 states will participate in the deal, reported Sunday on the Web sites of The New York Times and some of the newspapers involved.

The groups that have signed on include Cox Newspapers Inc., Belo Corp. (BLC), Hearst Corp., the E.W. Scripps Co. (SSP), MediaNews Group Inc., Lee Enterprises (LEE) and the Journal Register Co. (JRC)

The partnership will start in December with Yahoo's HotJobs service and move to other types of online advertising.

Among the newspapers that will participate are the Atlanta Journal-Constitution; the San Jose Mercury News; The Dallas Morning News and the Austin American-Statesman.

The deal could help the struggling newspaper industry increase lagging ad revenues.

"Most local newspapers have done a pretty good job of generating local revenue into (their) sites," said Leon Levitt, vice president for digital media for Cox Newspapers. "It's so much harder to generate national revenue because a lot of advertisers don't want to deal with 100 different newspapers. This will make it simple."

Dean Singleton, CEO of MediaNews, said the newspaper companies and Yahoo will share any extra revenue.

Financial terms weren't released.

Earlier this month Google Inc. (GOOG) announced plans to sell advertising space in 50 top newspapers, giving papers a new potential revenue source, offering online advertisers a new way to show off their products in print and helping Google expand its reach.