Real estate agents are resentful of the money they spend at local newspapers trying to please sellers. Yahoo!, one of the Internet's leading search sites, has just struck a deal with 150 newspapers across the U.S.

According to Peter Zollman, publisher of Classified Intelligence Report, a consulting newsletter for the classified advertising industry, the deal has the "potential to change the economics of the newspaper industry in the U.S. and globally."

So where do real estate classifieds fit in? They don't, at least not yet. The newspapers are going to concentrate on recruiting first by kicking off the consortium on Yahoo!'s HotJobs site where both Yahoo! and the newspapers have agreed to cooperate on "local search, contextual advertising and other content and ad relationships as well," writes Zollman.

Here's the story. Yahoo! and seven newspaper groups announced that for the first time, newspapers are working closely with a major dot-com that they don't own. So far Classified Ventures, an online partnership of newspapers has failed to set the real estate listings world on fire, despite being owned by Belo Corporation, Gannett Company, The McClatchy Company, Tribune Company and The Washington Post Company. The company's listing site is called HomeScape, which also has content from 150 newspaper partners across the U.S. and showcases listings online.

However, the listings aren't robust or specific to search fields. When requesting townhomes in Dallas between $350,000 and $500,00, nearly 500 properties popped up. Some of the homes were in Dallas County, but not the city of Dallas, and others were single-family homes, not townhomes. It did get the price range right, however.

The company also owns HomeGain, Apartments.com and Cars.com, among other properties.

The problem for newspapers is that there are simply better places to find listings if you're a consumer -- Realtor.com, for example, where there are many more listings, more artfully presented.

But give the newspapers a break. They're trying. And they're agreeing to a rare thing -- revenue sharing. In other words, it's in both the papers' and Yahoo!'s interest to make this deal work.

MediaNewsGroup, Hearst Newspapers, Belo, Cox Newspapers, Lee Enterprises, Scripps and Journal Register Co. will have 176 newspapers participating in the Yahoo! deal -- from large market leaders like the San Francisco Chronicle and the Dallas Morning News, to small local rags. More papers are expected to join.

Zollman analyzes that this is a big win for both Yahoo! and the papers. Yahoo! has been put in the shade by Google, and the papers have been criticized for "lack of focus and direction" and failure to cope with interactive media, which is critical to online housing listings with consumer interest in multiple photos, virtual tours, mapping, home valuations and much more. He points out that at Media News Group, online "yields less than 10 percent of revenue but already generates 20 percent of profits."

That's something for real estate listing and brand advertisers to think about. The Yahoo! deal may allow the Internet giant to come from behind CareerBuilder and Monster.com in classified job searches, so the jury's still out what may happen when the deals progress to include other areas of listings including real estate listings.

Says Zollman, "Integration with HotJobs is expected to begin almost immediately. The broader initiatives are supposed to kick in starting in Q1 of 2007; we expect that if they're successful, both sides will be finding new ways to work together well into 2008 and beyond."