Wednesday, February 25, 2009

S.F. Chronicle In Jeopardy

The Hearst Corp., the parent company of San Francisco Chronicle newspaper, announced yesterday that it must quickly slash costs including severe workforce reduction, or has to sell or close the newspaper. Hearst's announcement is triggered by the greater than expected loss projected for the year. According to Hearst, the newspaper has been losing money since 2001 including a lost of more than $50 million last year.

The Chronicle is hardly alone. Hearst recently announced that it was closing the Seattle Post-Intelligencer, unless it can find a buyer. The Tribune Co., which operates the Los Angeles Times and Chicago Tribune, filed for bankruptcy protection in December last year. The Philadelphia Inquirier and Daily News' parent company also filed for bankruptcy over the weekend. In addition, the Rocky Mountain News in Denver and Tucson Citizen in Arizona may close, if they can't find a buyer.

There is nothing new that the newspaper industry has been hit hard by the popularity of the Internet, which has drastically changed how news is produced and distributed. The newspaper companies used to be the only source of news. Not any longer. At CNN's iReport.com, individual citizens are contributing lot of news content at real time. I was very much impressed by the number of eyeballs I attracted, when I published my Cartoosh's View editorial cartoons to iReport.com. In my post about a cartoonist's dream, I also discussed the change in the syndicate industry.

The popularity of iReport.com is just one of many success stories in the new era of "user-driven content" business. In my post about how to produce passive incomes, I discussed user-driven content sites including eHow, HubPages, Squidoo, CafePress, Zazzle, and SaleForce.com's AppExchange.

Although news readers now receive free news from the Internet, many of them feel overwhelmed by the massive amount of information. With keywords you enter, the search engine returns lots of relevant web pages. Thanks to the technology that analyzes content relevance and website authority, such as, Google's PageRank, the quality of search results has significantly improved. Websites like Digg and StumbleUpon are offering an alternative to highlight important or interesting news and information by human surfers instead of search engines.

Still, how to consume news and information effectively with limited amount of time available in people's busy daily schedule remains a challenge. The news companies can play a new role in finding a solution of this challenge. Although the printed newspapers are not going to disappear completely, the future of the newspaper companies is closely related to how they leverage user-driven content and address effectiveness of news consumption.

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