What's the Best Way to Make a Billion Dollars in the Newspaper Industry?

Start with two billion?

OK, that's a variation of the old Napa Valley joke about the best way to make $10 million in the wine business (start with $20 million) but if the shoe fits...

Reading today's New York Times article about how recent acquirers of newspaper businesses are shocked at their rapidly deteriorating performance.  Shocked?

Anyone who has followed the newspaper industry the past few years is aware that the current fundamentals of the business are on a rapid descent and there's no obvious way to resolve them. The classified business has been eaten by Craigslist, free regional dailies have taken some of the display advertising and Google, Yahoo and Microsoft all have their eye on local advertising.  All it takes is casual reading of this blog or Ken Doctor's Content Bridges to understand that story.

The newspaper business has always been largely about ego and power. The difference then was that magnates like Hearst could use the newspaper as a way to boost their ego and their wallet.  Going forward, newspaper ownership will have to be all about ego, as it's pretty clear that the investment returns demanded by financial investors like Sam Zell or private equity firms just won't be there.