The Associated Press has long had a rocky relationship with the Internet. Two years ago, they were suing people for linking to their stories. Then they sent C&Ds to people using short quotes. After much deliberation, they decided that you could quote them for free—if you used less than five words. After that, prices started at $12.50.

However, they have had a few things worked out. Way back in 1998, they came up with a limited deal for sharing with sites like Yahoo and Google News (which obviously didn’t come until later), which expired late last month. Although they have reached a new agreement, Google stopped adding new AP stories in December, but will continue to host old ones. Now the AP has expanded their deal—with Yahoo.

Perhaps Google’s AP-free move was to prove that they don’t need the AP (and thus don’t need to pay as much for their deal)—but it may also backfire. AP stories may continue to be hosted on Yahoo Finance, like the story about the deal itself. But don’t think the AP’s got the Internet figured out quite yet. They may be making money, but they’ll soon fix that:

Besides pumping Internet companies for more money [and remember, this story was written by the AP], the AP also wants more cooperation in its effort to ensure its material isn’t appearing on unauthorized sites. As part of its crackdown, the AP is testing a system that tracks where its stories are being read. Yahoo pledged to enforce “the strictest standards” to protect the AP’s content.

Leading up to Yahoo agreement, AP CEO Tom Curley said the cooperative was considering whether to separate its online content into different tiers so exclusive stories might cost more than breaking news reports widely available elsewhere on the Web.

Sources close to the deal say Yahoo avoided the tiered pricing system.

What do you think? Is the AP getting this Internet-thingy figured out? Or are they another old-school media that won’t survive much longer without radical rethinking?