Extra: Newspapers Aren't Dead

By Jeremy Caplan

"Contrary to popular belief, newspapers aren't dying. Newspapers are making tons of money."

-- MARK CUBAN

The Tycoons Are Rushing to Make a Deal

When the Tribune Co., owner of the Chicago Tribune and the Los Angeles Times, went on the block, it was another response to stockholders' insatiable demand for rising returns, even for papers with loyal readership and steady ad support. But now that a bevy of bigwig buyers are itching to own prestigious dailies, newspapers in key markets may benefit from a return to private ownership. Why would baron bidders like Hank Greenberg, Jack Welch and David Geffen--who have expressed interest in the Tribune Co., the Boston Globe and the L.A. Times, respectively--rush in to bet on slow-growth newspapers? Perhaps they're aware that 85% of adults either read a paper every week or visit its website. Less pressure from Wall Street may forestall short-term cuts, enabling papers to shift their focus from quarterly earnings toward rethinking the print game. "Newspapers are in a strong position to extend off-line publications online," says Alexia Quadrani, media analyst for Bear Stearns, "and they're still highly profitable."

Google Caught in Print!

New deals with Yahoo and Monster.com will boost papers' digital classifieds

Newspaper ads still generate $48 billion a year, three times the amount spent for online ads, which is why ad-driven Net companies like Google, Yahoo and Monster.com have spent the past few months setting up partnerships with print publishers. Yahoo signed 176 papers for a deal to post classifieds online, and Google is helping an additional 50 use the Web to sell their ad space more efficiently. That's a crucial development because the recent stagnation in print-ad revenue has been aggravated by the industry's archaic sales system, which has made it difficult for small businesses to buy space in the nation's 1,200 dailies. Google will help remedy that. But the story won't end there. "The word newspaper is going to disappear," says Scott Bosley, executive director of the American Society of Newspaper Editors. "Newspaper companies will become information companies. We'll do well because we have the best news resources and the most at stake."

Face-Lifts Ahead

Papers are experimenting with new formats and products to hang on to advertising and compete more aggressively with cable and online news.

o In replacing stock tables, sport stats and TV listings with service features, publishers are adapting to the ubiquitous availability of raw information. o To expand their audiences, papers are launching Spanish editions, free commuter dailies and glossy magazine inserts. o By launching writer blogs and posting rough drafts of cartoons and editorials online, some editors are encouraging more community involvement. o Gannett has announced a new "crowd-sourcing" policy, enabling editors to draw on reporting from readers.