"Newspapers will never go back to their historical level of profitability," said Philip Meyer, a journalism professor at the University of North Carolina at Chapel Hill. However, he says, this should no longer shock editors and owners, as papers once had "a near-monopoly in the market, and the newspaper owner owned the road on which information flowed."

Though Meyer wrote a 2004 book called “The Vanishing Newspaper”, he says, "You can still make an investment case for newspapers." Papers just need to adapt their news-breaking skills and influence on society to the Internet.

Moving online will severely cut newsprint and transportation costs, which can account for up to 17 percent of total spending. "The new model can be built on information, as the leading trustworthy provider of information," Meyer says. "But now is the time to do it."

Many industry observers now agree that newspapers will never again enjoy the 20 to 40 percent profit margins of their heyday; however, newspapers can still thrive on profits in the teens that they make now. These profits are still very good compared to other industries, but have produced conflict with investors in publicly traded newspapers.

Former newspaper editor Alan D. Mutter, now a manager at new media investment firm Tapit Partners, says that privatizing newspapers to move them away from the demands of Wall Street won’t work on its own. He points to the Philadelphia Inquirer, which faced layoffs after going private.

The answer, rather, is faster adaptation to new technology and more relevant content; newspapers, Mutter says, often publish based on "personal predilections" of editors and reporters, not based on what audiences want to read.

Still, Mutter feels that newspapers remain a "unique and powerful brand with a high degree of credibility.”

Source: Newsday.com through Poynter Online