Yahoo! is set to place contextually relevant display ads with its newspaper consortium, which now represents 40 percent of all newspaper circulation. The new AMP program for newspapers begins by the end of 3Q at the San Jose Mercury News and SFGate.

Yahoo! and the newspapers are banking big on AMP’s success. Indeed, it has been reported that Yahoo! has 800 people involved in some fashion with the consortium (something I’d like to learn more about).

Working with AMP’s behavioral capabilities, newspapers are hoping to double CPM rates, in some cases, and also see some new advertisers from Yahoo!. Analyst Ken Doctor notes in a blog post that many of the newspaper execs he talks to believes AMP is the most important part of the consortium deal.

But how big will it get? And at what point does Yahoo!’s ContentMatch search service, which is being beta tested at some newspapers, get commingled with AMP? It is hard to say. One thing that isn’t likely to happen is that Yahoo!’s search deal with Google boosts the revenue received by the consortium. Doctor, in his blog post, says the consortium deal already has a guaranteed level of revenues from ContentMatch.

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