Two revealing headlines, both from BtoB Magazine:

First-quarter online ad spending hits record $3.9 billion – Internet advertising revenue totaled $3.9 billion in the first quarter, a record high that was up 38% from $2.8 billion a year earlier, according to a report released Tuesday by the Interactive Advertising Bureau and PricewaterhouseCoopers.

Merrill Lynch lowers estimates for newspaper ad spending – Investment bank Merrill Lynch has lowered its projection for U.S. newspaper ad spending growth this year to 1.2%, down from a February forecast of 1.8%. Merrill Lynch media analyst Lauren Rich Fine adjusted the company’s newspaper ad revenue projection for next year down to 1.1%, from a February forecast of 1.4%.

The Merrill report was actually entitled “Deep Depressing Dive.”

Could it get any worse for the newspaper business? Even if you believe that newspapers are going the way of the dodo bird, the rate of decline in the business is shocking. It’s not like circulation is plummeting. It’s more drifting down with a change in demographics.

Ironically, another survey I read recently said mainstream media gets more citations from blog posts than any other source by a wide margin. So as mainstream media become more important to the dissemination of useful information for discussion in the blogosphere, its business starts to go off a clifff.

The good news: The NY Times will do more than $60 million in online advertising this year. Newspapers that are changing their business models are seeing results, but reinvention is a long, painful process.