The online ad business, excluding mobile ads, is set to expand to $34.4 billion in 2014 from $24.2 billion in 2009, according to the report, which PwC plans to release Tuesday.

Newspapers, meanwhile, continue to suffer from a decline in advertising revenue. According to numbers released by the Newspaper Association of America earlier this year, print advertising revenue dropped 28.6 percent in 2009 to $24.82 billion. The PwC report estimates that print advertising in newspapers will hit $22.3 billion by 2014.

“Although the Internet did not fully escape the impact of the recession, its decline in the United States was much less severe than that of other advertising media,” the PwC report notes.

Shifts in consumer behavior, potential for inventory on the Internet, and increased broadband penetration in the U.S. are key factors in PwC’s projections, according to David Silverman, a partner at PwC.

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That said, the industry wouldn’t turn down some help from Congress, says John Sturm, CEO of the Newspaper Association of America.

Testifying at a House hearing this morning, Sturm says his group does like proposals that would let newspapers–and other businesses–change some of their accounting practices related to tax refunds (via net operating-loss provisions) and pension plans. Oh, and he’s in favor of a proposed law that would let papers operate as nonprofits while still generating advertising revenue.

The complete text of Sturm’s opening statement is embedded at the bottom of this post, and if you want to watch the hearing, organized by Congress’s Joint Economic Committee, it was streamed live (albeit choppily) here.

My political handicapping skills are nonexistent, but that said, I think there’s no chance of Congress passing a bill that singles out newspapers for aid. Local papers are still vitally important to local lawmakers, but many of those lawmakers’ constituents hate their papers, for all manner of offenses, real and imagined. I just can’t imagine what they’d do if they were told their tax dollars were going to support their local rag.

Still, I wouldn’t rule out some politically motivated pressure being applied to bogeymen like Craigslist and Google (GOOG), in the form of antitrust scrutiny or other arm-twisting.

JFS-Statement-Joint-Economic-Committee-092409-Hearing –

The search giant is planning to upgrade its existing Google Checkout payment service to handle a broad suite of billing and subscription services targeted at premium content creators like newspapers, according to a memo the company recently submitted to the Newspaper Association of America.

The memo, which went online this week, responds to the NAA’s open request for new “paid content” solutions earlier this summer. It was first spotted by the Nieman Journalism Lab.

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“From our perspective, we look at this pretty thoroughly and there is always a tension around fair use … I would encourage everybody, think in terms of what your reader wants. These are ultimately consumer businesses and if you piss off enough of them, you will not have any more.”

– Google CEO Eric Schmidt tries to shake some sense into the Newspaper Association of America

The World Association of Newspapers said Monday that it opposes the deal, adding its name to a growing list of critics that now includes not just Microsoft, but the Association of National Advertisers and European Union as well. Late Monday, WAN, which represents 76 national newspaper associations and more than 18,000 publications on five continents, issued a statement condemning the Google-Yahoo deal as disastrous for the newspaper industry. Surprisingly hostile in tone, it argues that the proposed advertising alliance between Google (GOOG) and Yahoo (YHOO) will weaken competition in the online advertising space and solidify Google’s dominance in search at a time when the company is expanding its own content businesses:

The upshot is that the deal will force newspapers to become even more dependent on Google than they are today. By handing Google control of up to 90 percent of paid search and content advertising, Google will exert tremendous power over both newspapers’ ability to reach readers and their ability to generate online advertising revenue. Perhaps never in the history of newspaper publishing has a single, commercial entity threatened to exert this much control over the destiny of the press.

It is particularly worrisome that this consolidation of power is occurring at the same time that Google increasingly takes positions that are adverse to newspapers and other content creators. Google already owns several content sites that directly compete with content developed by newspapers and other creators–often by simply copying others’ content without authorization. Usually, Google alone profits from this misappropriation. Take, for example, the case of Google News, which a Google senior executive recently admitted drives $100 million in advertising revenue to Google itself yet provides nothing–not a penny–to the newspaper companies whose works appear on those pages.

Clearly, newspapers have quite a few axes to grind with Google, and WAN appears intent on grinding them all at once. That said, Google’s partnership with Yahoo would be limited to the United States and Canada, so the protestations of a group of international newspapers may not carry as much weight with the regulators reviewing the deal as WAN would like. Especially after the U.S.-based Newspaper Association of America so quickly distanced itself from them. Said NAA CEO John F. Sturm, “While NAA is a member of the World Association of Newspapers, I would like to clarify that the NAA Board of Directors has taken no position on the proposed advertising partnership between Google and Yahoo.”

The World Association of Newspapers said Monday that it opposes the deal, adding its name to a growing list of critics that now includes not just Microsoft, but the Association of National Advertisers and European Union as well. Late Monday, WAN, which represents 76 national newspaper associations and more than 18,000 publications on five continents, issued a statement condemning the Google-Yahoo deal as disastrous for the newspaper industry. Surprisingly hostile in tone, it argues that the proposed advertising alliance between Google (GOOG) and Yahoo (YHOO) will weaken competition in the online advertising space and solidify Google’s dominance in search at a time when the company is expanding its own content businesses:

The upshot is that the deal will force newspapers to become even more dependent on Google than they are today. By handing Google control of up to 90 percent of paid search and content advertising, Google will exert tremendous power over both newspapers’ ability to reach readers and their ability to generate online advertising revenue. Perhaps never in the history of newspaper publishing has a single, commercial entity threatened to exert this much control over the destiny of the press.

It is particularly worrisome that this consolidation of power is occurring at the same time that Google increasingly takes positions that are adverse to newspapers and other content creators. Google already owns several content sites that directly compete with content developed by newspapers and other creators–often by simply copying others’ content without authorization. Usually, Google alone profits from this misappropriation. Take, for example, the case of Google News, which a Google senior executive recently admitted drives $100 million in advertising revenue to Google itself yet provides nothing–not a penny–to the newspaper companies whose works appear on those pages.

Clearly, newspapers have quite a few axes to grind with Google, and WAN appears intent on grinding them all at once. That said, Google’s partnership with Yahoo would be limited to the United States and Canada, so the protestations of a group of international newspapers may not carry as much weight with the regulators reviewing the deal as WAN would like. Especially after the U.S.-based Newspaper Association of America so quickly distanced itself from them. Said NAA CEO John F. Sturm, “While NAA is a member of the World Association of Newspapers, I would like to clarify that the NAA Board of Directors has taken no position on the proposed advertising partnership between Google and Yahoo.”