Declining circulation, accounting adjustments from last year’s Knight Ridder purchase and a soft real estate market have combined to bring down not only The McClatchy Company’s (NYSE: MNI) print side, but online as well. In his UBS Global Media & Communications conference presentation, chairman and CEO Gary Pruitt readily conceded the company’s troubled state, but said that 2008 would mark the start of turnaround—at least for online revenues. Some of the points he touched on included:

-- Intensive online ad focus: Apart from driving additional print revenues, attracting new readership and reducing costs, growing online revenues is a big part of McClatchy’s four-part plan. The company plans to add online sales staff to position itself as an online specialist. I spoke with Chris Hendricks, VP of interactive media, following the presentation, and he also said that the company wanted to reduce its reliance on print upsells: “Selling online-only ads has become a major focus for us.”

-- The Yahoo (NSDQ: YHOO) connection: “We will never be the technology company Yahoo is, with their capabilities in graphical serving and search. But Yahoo will never be the local media company McClatchy is, with our large news and local advertising sales capabilities,” Pruitt said, noting the mutually beneficial aspects of its membership in the Yahoo Newspaper Consortium, which it joined in April. Hendricks added that McClatchy sites that were moved to Yahoo saw traffic increases of 4 percent in the first month. As more papers are added to the service, Hendricks said that he has every reason to expect it to translate immediately into higher online ad revenue as it completes its transition into the consortium next year.