Another aspect of the housing slump is noted here in the Chicago-based Sun Times Media Group's Q3 2007 conference call. Real estate advertising has slowed along with home sales.
Cyrus Freidheim - President and Chief Executive Officer
We committed to invest aggressively in our websites and mobile media channels, and we are. The area of most dramatic industry decline is print classified advertising, which year-to-date has dropped by 18% in the Chicago DMA, comparable to national trends. In addition to weak underlying markets in real estate and autos, classified is shifting to the Internet. In response, we are developing robust offerings for classified on our websites. We are positioning ourselves to benefit from the shift of classified to the Internet, as classified to Internet revenue grows rapidly from its relatively low base to eventually compensate for the print losses. We have a strong position with classified advertisers and intend to maintain that position through this shift in channels.
Specifically, in the third quarter we have added a new, comprehensive residential real estate website, searchchicago.com/homes, which allows people in the Chicago area to search thousands of homes over more than 10 counties in Northeastern Illinois and Northwest Indiana. We already have one major sponsor signed up. A launch of searchchicago.com/homes completes the trio Search Chicago offerings this year in jobs, auto, and homes. These sites give advertisers and consumers an excellent complement to classified advertising in print.
...Our Internet advertising revenues have grown 49% over last year. We are pleased with our progress, and are acutely aware of the Internet's importance to our future.
William Barker - Chief Financial Officer
First, a few financial headlines for the quarter. Advertising revenue was $71.7 million, which was down 6% versus last year. For comparison purposes, ad revenue in the second quarter was down 12% versus the prior year. Circulation revenue was $18.9 million, which was down 7% versus last year, and in line with the 8% decline in the second quarter.