TORONTO - As advertising revenues evaporate at a merciless pace, Canadian newspapers have had to slash jobs and shutter divisions to keep afloat, with rising online ad sales providing a much-needed lifeline as they transition to new technology.

But with U.S. media bellwether the New York Times posting weaker quarterly Internet ad sales for the first time ever earlier this week, there are signs that going online may not be enough of a shield for traditional media players.

Companies are tightening their ad budgets and the impact of that is widening fast, said Rob Young, senior vice-president of planning services at Toronto-based research agency PHD Canada.

He predicts that newspaper advertising revenues will slump in 2009 at a staggering pace, possibly worse than in the past three recessions he's witnessed as a media observer.

"This one, I suspect, will be deeper in terms of ad revenue impact than the other three," he said.

Newspapers companies are making a mistake in assuming that a shift in focus to the Internet alone will rescue their business model, Young said. He believes they need to find a way to persuade younger readers to pick up newspapers, which would in turn benefit advertisers.

A newspaper has "the ability to reach a large proportion of the population in a day that makes it such an attractive advertising vehicle," he said.

"It's that ability to get an advertising message out to 65 per cent of the population in one day that's hard to replicate in any medium, including the Internet."

However, Young remained cautious about his confidence in that model actually playing out within the industry.

"It's going to be a continued struggle," he said.

"I'm sure we'll see marginal papers falling by the wayside or having to merge."

The domestic newspaper industry long ago began cutting jobs in step with the obvious decline in traditional ad revenue that followed the rise of the Internet, accelerating them to weather the economic downturn.

Earlier this month, the Globe and Mail announced plans to cut about 10 per cent of its workforce -- or about 80 jobs -- in an effort to reduce costs.

Last year, both Canwest Global Communications (TSX:CGS) and Quebecor Inc. (TSX:QBR.B) slashed staff at the Sun Media newspaper chain and Canwest's newspaper division, which operates big city papers from Vancouver to Montreal, including Globe rival the National Post.