"We entered into a partnership from the markets where we publish newspapers," Walter Hussman, WEHCO's president and CEO, said Wednesday. "It will be set up as a subsidiary, and we'll let each individual paper operate [it]."
President of the Times Free Press Jason Taylor couldn't be immediately reached Wednesday for comment.
WEHCO—which owns other newspapers in Arkansas, Texas and Missouri—will partner with LocalEdge to provide local small businesses with 13 different types of Internet marketing services, such as search engine optimization, social media marketing, Web design, email marketing and reputation management, Hussman said.
LocalEdge is owned by Hearst, which is a 125-year-old company that has 20,000 employees, according to its website.
Hearst is the legacy of iconic and historic newspaper publisher William Randolph Hearst, who inspired the award-winning movie "Citizen Kane."
Hussman said TFP advertising employees will have the opportunity to venture into the new work, and leaders will also likely hire additional staff to provide the new services.
This news comes soon after Hussman wrote a letter to the newspaper's readers saying that ad revenue will no longer sustain the newspaper.
But Hussman said Wednesday that the timing of that letter is a coincidence and that he wrote a similar letter for another of his papers in June.
His strategy is to move toward a more subscription-based model, meaning the product will be more financially supported by subscriptions instead of ad revenue, as has been traditionally the case, he said.
Increased subscription costs will help leaders continue to hire strong reporters and editors to produce a quality product, he said.
"In the United States, historically, newspapers got about 80 percent of revenue from ads," he said. "In Europe, many get over half their revenue from circulation."
The new partnership with LocalEdge is an opportunity for newspapers to pick up lost revenue, he also said.
Newspaper leaders nationwide have faced declining ad revenues, according to the Pew Research Center's State of the News Media Report.
In 2011, revenue losses were worse at 7.3 percent, compared to 6.3 percent in 2010.
Ad revenues are now less than half of what they had been in 2006, according to the report.
Hussman noted that Google likely makes more ad revenue than the entire newspaper industry. And according to the State of the News Media Report, five tech companies accounted for 68 percent of all online ad revenue.
In two years, Facebook is expected to account for one out of every five digital display ads sold, also according to the report.
The report also noted signs of financial ties between technology companies and news providers.
Chattanooga new media specialist and "flight director" of Moss Media Labs Jon Moss said it isn't surprising that the TFP is looking to bring in extra revenue.
"The Times Free Press has shown resilience by creating on- and offline specialty publications and producing various live events," he said via email. "Unlike some forms of traditional advertising, digital is very measurable, so it will be interesting to see what they do in this constantly changing space."