It's the ads!!

John Ellis, a venture capital executive formerly with the Boston Globe, writes in the Wall Street Journal (subscription required) that “Knight Ridder has been publishing mostly second-rate newspapers for as long as anyone can remember.” He says the company’s strategy has been to offer mediocre content while leveraging its hold on classified advertising, the real money maker for newspapers. With the advent of new technologies to deliver ads (from the internet to E-Bay to Craigslist and others), the need for newspapers to deliver customers is diminishing. It is looking ahead to the demise of classified and space ads in newspapers that worries investors and futurists—some of whom have already declared that newspapers will cease to exist in the near future. He notes that newspaper chains had the opportunity to buy their new rivals, including Yahoo and Google, five years ago and passed. Now they may be looking to those companies, plus Microsoft, to bail them out in the future. Ironic, isn’t it?