This good news would be even better if Gannett had achieved these profits as a result of some systematic change in its approach to advertising. The AP story reports that sharp cost cutting measures were used to achieve the gains.

SAN FRANCISCO (AP) -- Gannett Co., the largest U.S. newspaper publisher and parent company to the Reno Gazette-Journal, used sharp cost cuts to deliver a higher-than-expected second-quarter profit Wednesday and offered a wisp of hope that the industry's advertising drought might be subsiding.

Although the report showed Gannett's revenue continuing to slide in the last quarter, its executives indicated advertisers are gradually spending a little more money on newspapers.

A study by the Inland Press Association shows what you would expect in the largest papers - the last five years were tough. However, revenue increased in daily newspapers with under 15,000 circulation. 

"A triple whammy of declining circulation, advertising and classified revenue has been eroding the profits at U.S. dailies over the past five years, according to a report by the Inland Press Association. The sole circulation group showing a hopeful sign was the under 15,000-circulation category, which actually showed a 2.5 percent growth in gross revenues during the five-year period ending in 2008."

The study shows that, although the trends are not good, most newspapers are still profitable.

"The Trend Analysis average overall shows newspaper operating profits still ranged from more than 8.5 percent to 13.6 percent of gross revenue in all circulation groups except 25,001-50,000."