While reading the "letters to the editor" section of my local newspaper (I read their paper online), I found the following quote a local reader submitter...

As with the Times and every other newspaper, The Californian is also suffering under the diminishing economy and loss of advertising from suffering or no-longer-functioning businesses. I therefore try to patronize The Californian's advertisers.

In addition, I read an article written by a columnist in another publication, discussing the same topic of newspaper failures...

I am not going to write about newspapers anymore. Over the past three or four years, I have devoted quite a number of my columns to issues in the newspaper industry. No more. I no longer believe that the industry is very relevant to the future and things digital.

The subject of how the Internet is killing the newspapers is an old one, and everyone's got a theory.

While I do think that there will always be a place for paper, simply because paper offers some unique advantages that digital doesn't, certainly paper has its limitations as well, and digital media will certainly exploit them. Yes, newspapers will lose business, but there's a place for them.

If you go back to an earlier article I wrote here, "Local Blogging & Advertising", what I tried to say is that local businesses, particularly the ones with store fronts, don't typically advertise online. Their customers are those who live in the same town, and actually see their store signs and buildings. The businesses that spend a lot of advertising money online are those that don't have store fronts. These are the dotcoms, or the businesses that manufacture products for retail. Their customers are global.

So, the reason why newspapers haven't found a lot of success transitioning to the Internet is because they're trying to monetize their Internet audience with local advertisers.

Your local newspaper will do just fine as a newswire service, similar to how Associated Press works. Web portals like Yahoo, Google, MSN, all offer local news content that you can customize. So, the local newspaper can license their content to these web portals, instead of trying to compete against them. That's how local newpapers will survive.

What's killing the newspapers is that they believe the web browser is just another piece of paper. It ain't. The demographics are different. The way content is searched and indexed is different. Readers have shorter attention spans. The way content is shared is different. It requires different advertisers as well.

Newspapers still believe they can take an article about a house fire in the local area, and pair it up with an advertisement for a local car dealership, and actually believe that it's contextually relevant.