For obvious reasons, the stock market has not been kind to newspaper publishers of late. Their weak performance has prompted many companies to explore the idea of going private as a way of making painful changes to the business outside of the public eye. Last week's announcement that billionaire Sam Zell would buy out the Tribune Co. was the first of what may be a number of similar moves. The natural question, then, is whether newspapers will actually perform any better as privately held entities, or whether the claim that public markets focus too much on short-term results is just an excuse. Either way, any plan to rescue the industry will have to involve a smarter internet strategy than what newspapers have shown so far. As one journalism professor from UNC puts it, newspapers need to realize that there's no going back to the past. These companies will never enjoy the monopolies on information that they once held or the fat profits that came with those monopolies. That sounds really obvious, except that some publishers believe that a return the the past is possible. The alternative to turning back the clock is to embrace the future, which means plunging headfirst into the online realm. It's very unlikely that the internet will prove to be a total substitute for much of the business that the newspapers are losing, but these companies really don't have much choice. The good news is that most newspaper heads seem to be recognizing this, Sam Zell's recent boneheaded statements about Google notwithstanding. A survey of publishers in Europe suggests that many recognize that the internet can complement the newspapers' traditional business lines. By recognizing this, these publishers are making the deeper realization that they're not in the newspaper business, but in the news business, which is where they need to be. For his own sake, hopefully Sam Zell will figure this out as well.
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