Because of an editing error, two dates were incorrect Saturday in an article on New York Newsday. The newspaper began in September 1983. Its Manhattan headquarters opened in July 1984.

The Zipper, Times Square's famous illuminated headline billboard where crowds gathered for a half-century to catch news bulletins, lit up this month after seven years of darkness.

But the sponsor of the comeback was not The New York Times, which built the Zipper on its namesake square. Nor was it the Daily News, the city's biggest newspaper. Nor the New York Post, the city's flashiest.

As a symbol of its ambitious aspirations to become New York's "dominant mass-market newspaper," New York Newsday, a two-year-old offshoot of the Long Island tabloid, flashed on the Zipper at a $1 million-a-year fee. New York Mayor Edward I. Koch -- along with clowns and an elephant from the circus, jokes by comedian Henny Youngman and smiles from actress Diane Keaton -- assisted at the recent ceremony, presenting the paper with a mock street sign: "Newsday Square."

"We're going to do something which has been tried before, but which no one in fact has done in 40 years," said Peter Goldmark, vice president of the Times Mirror Co., Newsday's owner. "We're going to create a new, major, first-class daily newspaper in New York City."

It is a gamble that bucks several trends. Two-newspaper cities are becoming one-newspaper cities at a rapid rate around the country. Some analysts doubt that New York has the long-term advertising base to support two tabloids, much less three, in addition to The Times, which is tailored to a well-educated readership.

Moreover, while urban newspapers are expanding into the suburbs, rarely, if ever, has a suburban paper successfully expanded into a city.

New York Newsday began in 1984 as a successor to an experimental Queens edition of the Long Island paper. In two years, it has built a circulation of 90,000, half of it in the last year. It opened a plush Manhattan headquarters last year, hired 150 reporters and editors and recently redesigned itself with front-page, back-page and feature-page color photos.

Columnist Murray Kempton, a New York institution for decades, was joined on the staff this month by three new columnists: Sydney Schanberg, who was ousted from the The Times' editorial page; New Yorker writer Calvin Trillin and former Times columnist John Leonard.

"We're looking toward slow, steady growth," said Chairman David Laventhol, city editor of The New York Herald Tribune when it folded 20 years ago. Times Mirror executives say they would be satisfied with circulation increases of 40,000 a year."

So far, 90 percent of New York Newsday's circulation is in Queens, the borough closest to Long Island. But it is available on all Manhattan newsstands and half of Brooklyn's newsstands. It sells for 25 cents, a dime less than the News and the Post, a nickel less than The Times.

"We think the timing is right," Goldmark said. "We have a very powerful base off which to leverage our efforts." The Los Angeles-based Times Mirror is the nation's second-biggest publishing company after Time Inc. Newsday, with a daily circulation of 555,757 and an advertising base in the prosperous Long Island suburbs, is one of its most profitable properties.

When New York Newsday was launched, it looked as if the News, which the Tribune Co. had unsuccessfully tried to sell in 1982, or the Post, which has lost millions for its owner, Rupert Murdoch, might go under.

But the News, the city's largest paper with a 1.2 million daily circulation, pared its staff, sold its building, renegotiated its labor contracts, built new production plants, jazzed up its headlines and began to turn a modest profit.

Murdoch received an extension from the Federal Communications Commission on the requirement to sell the Post under cross-ownership rules (he recently acquired a New York television station) and shows no sign of wanting to fold, despite his losses.

While the News' advertising and circulation base is in Queens and Brooklyn, and some of its executives see Newsday as a long-term threat. Daily News president and publisher James Hoge said, "It's a little early to make much of a judgment. They're spending a good deal of money . . . . We certainly expect to continue, and I expect they intend to continue."

As if to balance the earnest Schanberg, Newsday hired away the editor of the Post's popular Page Six gossip column. A veteran Times political reporter, Maurice Carroll, also joined the staff. And the paper boasts that it is the only New York tabloid with foreign bureaus: It won a Pulitzer Prize last year for its Ethiopian coverage. But the busy, ad-stuffed layout of the paper and the traditional loyalty of New York readers may work against Newsday. Kempton said people have a hard time finding what they want to read inside, and he compares it to "landing on a Pacific Island in World II -- 600 yards of coral and gravel, and then you have to build an airstrip into the jungle."

But he contends that its intensive and detailed coverage of city issues frequently bests the opposition. Although the Long Island and New York editions overlapped at first, a comparison last Thursday showed that the New York paper, with 22 New York stories, did not pick up any of the Long Island paper's 13 suburban stories.

The Times captures about 60 percent and the News about 32 percent of the city's advertising dollars, while the Post and smaller papers share the remainder. But The Times' daily circulation in the city is only 351,720 (of a nationwide total of 934,616), less than half that of the News and a third less than the Post.

"Newsday is positioning itself between the News and The Times," said J. Kenneth Noble, a media analyst for Paine, Webber Inc. "There's a potential for a niche to open up, and they're positioned to grab that niche . . . . They can afford to go for the long term."