Can the paper cut costs even more? It’s going to try, starting with a 100-person cut in its newsroom, which will bring headcount down by eight percent. But the Times is also counting on the ad market to pick up at some point, and it says it can now see the faint outline of a recovery taking shape.

During the paper’s earnings call yesterday, it offered a bit of insight into who was buying ads and who wasn’t. In the latter category: Banks, mutual funds and insurance companies, which were burning cash a year ago in an effort to convince customers that things were okay; movie studios and telcos also pulled back. But health-care spending was up, via big pharma and hospitals. Were they pitching consumers or legislators?

Bear in mind that ad revenue dropped 26.9 percent for the quarter, so all of this is relative. So when the Times talks about seeing “encouraging signs of improvement,” as CEO Janet Robinson mentioned in a press release yesterday, what exactly does she mean?

Here’s Robinson’s answer to that question, delivered during yesterday’s call. Transcript via Seeking Alpha:

We’re seeing improvement, a modest improvement. We’re seeing certainly more requests for proposals across the board. We’re seeing a modest growth in regard to commitment. We still are seeing just in time commitments, so the visibility continues to be cloudy, but I think we are encouraged that indeed we see advertisers telling us that their business is improving and consequently requesting more information from us in regard to rates and placement and certainly customized programs.

I’ll give you an example. The retailers in September as noted in my remarks, we started to see a little bit of a pickup. We have had in depth conversations with them in regard to their improvement. So we do see traffic improvement in regard to the stores and consequently when that’s the case, they tend to want to do more in regard to building even more traffic.

Same holds true in regard to some of the national advertisers with technology and national automotive, with certainly the bankruptcies behind General Motors and Chrysler and some activity certainly in technology and healthcare, we are seeing more commitments coming our way in regard to national schedules as well.

To date, 27of the 33 have responded, among them Google and Yahoo, whose replies are of particular interest given the proposed advertising deal between them. In response to the Committee’s query, Yahoo admitted it did engage in some form of behavioral targeting, but volunteered that it would henceforth allow users to turn off targeted advertising on its Web sites.

Yahoo claims it had been planning this revision to its policy for months. What a happy coincidence that it was enacted in time to be included in the company’s letter to the Committee.

Google also acknowledged using targeted-advertising technology without explicitly informing customers–hence, its $3.1 billion acquisition of DoubleClick. And it too suddenly offered its users a way to opt out of targeted advertising. Another happy coincidence, I suppose, in the works for months and entirely unrelated to the company’s pact with Yahoo, which would reportedly grant Google control over more than 80 percent of the search market.

Still, it’s good news for consumers–or rather those consumers who actually pay attention to such things. And for those who don’t, a word of advice: It might be time to start. Because Google, which already controls more than 70 percent of the search market in the states, clearly sees quite a bit of behavioral targeting in all our futures. “Though it is not the focus of our business today, we also believe that behavioral advertising can be done in ways that are responsible and protective of consumer privacy and the security of consumers’ information,” Google wrote in its letter to the Committee. “To ensure the continuation and proliferation of responsible behavioral targeting practices, we are supportive of efforts to establish strong self-regulatory principles for online advertising that involves the collection of user data for the purpose of creating behavioral and demographic profiles.”

News.com reports today that at least nine states this year have considered enacting “download taxes” on digital goods–and five of those states have adopted them, including Nebraska, Tennessee, Indiana and Utah. Similar laws are already on the books in Alabama, Arizona, Colorado, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Maine, New Jersey, New Mexico, South Dakota, Texas, Utah, and Washington.

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