America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 1 of 12 ―I am very old fashioned. I read two newspapers every morning,‖ says John Carroll, the former managing editor of the Los Angeles Times. Carroll, who has worked in newsrooms across the country, starts the day with a copy of the New York Times and his hometown paper the Lexington Herald-Leader. ―I couldn‘t do without a general newspaper that gives me the news of the day. But I use websites to serve my narrower interests,‖ Carroll says. He follows changes in the media industry, his favorite sports teams and, cartoonists on the Internet. Niraj Sheth, a senior at Stanford University who will intern at the San Jose Mercury News and the Wall Street Journal next year reads the print versions of both those papers and the New York Times and Stanford Daily every day. ―Part of it is sentimental,‖ he says. ―I like sitting there, eating breakfast having a newspaper or two to flip through.‖ A self-proclaimed news junkie, Sheth also checks these publications websites for breaking news throughout the day. While speaking to 20-something year olds and 60-something year olds, media analysts, publishers and reporters over the last few months I found that our country‘s major metropolitan newspapers play a leading role in most of our daily routines. Their familiar smell invites us to indulge in ink-stained fingers and messy adult ―play.‖ Perhaps more importantly, their reporters provide us with the information we need to vote, to protest, to invest, to send that ―congrats on your wedding – but we only broke up six months ago?!‖ email. Their content allows us to discuss the issues that shape our global community with both strangers and friends. These conversations may turn strangers into friends, or friends into strangers. ―People cannot self govern, cannot make decisions about public life – and society cannot be democratic – if people do not have information about the public sphere,‖ says Tom Rosenstiel, Director of The Project for Excellence in Journalism. ―Journalism evolved naturally to fill that need. It is literally true that the more democratic the society, the more journalism it has, and the less, the less journalism it has,‖ he added. Indeed, news gatherers played an essential role in America‘s democratic process from the very beginning. Their work is protected by the very first amendment of our country‘s constitution. As legal scholar Owen Fiss wrote in The Irony of Free Speech, this amendment has the ability to ―[protect] a democracy from itself or to…[avoid] a tyranny of the majority.‖ ―Major metros are the epicenter at what the first amendment is about,‖ says Bill Marimow, current editor of the Philadelphia Inquirer. Marimow started his career as a reporter for the Baltimore Sun, moved onto the Philadelphia Inquirer, and served as the ombudsman of NPR before returning to the Inquirer. ―The core purpose of the first amendment is to give readers information of governing importance. It is the duty of the press to scrutinize, analyze, dissect public affairs,‖ he says. America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 2 of 12 For more than 115 years major metropolitan papers have done just this as they served as our country‘s chief news gatherers. Earlier this year, the Washington Post reported stories of neglect at the Walter Reed Army Medical Center. It was two Post reporters who uncovered the Watergate scandal in the 1970s. In 2007, reporters at the Los Angeles Times won a Pulitzer for reporting on the world‘s distressed oceans. These papers provide journalists the resources needed for intense watchdog reporting, and they cover the urban areas that shape the character and health of our entire country. They also have the ability to spot and analyze trends in ways that local papers and niche news providers cannot. ―They cover regions, not just towns,‖ observes Rosenstiel. ―We do not just live in towns. Our lives are more mobile than that. The big metros are the only papers that cover the whole community in which we now live.‖ But major metropolitan papers may be heading toward that ―endangered species‖ list that counts horse and buggies, player pianos, and VHS tapes among its ranks. As Sheth and Carroll attest, more and more readers are turning to the Internet for their daily doses of information. As they do so, print circulation numbers are dropping. At the same time, newspapers‘ online advertising revenue falls far short of their traditional print figures. And these print figures are also declining. Stock prices of newspaper companies are plummeting as analysts claim that ―structural‖ not ―cyclical‖ change is underway in the industry. All the while, the industry has very slowly moved toward innovation and change. ―Perhaps the newspaper is a product of history,‖ muses Hazel Reinhardt, the Director of Media Research at Northwestern University‘s Media Management Center. ―Things become eclipsed by other technologies.‖ Pulp news may be a product of the past. Some publishers are willing to concede this point. ―I really don‘t know whether we‘ll be printing the Times in five years, and you know what? I don‘t care, either,‖ Arthur O. Sulzberger Jr., the publisher of The New York Times, said in a comment heard round the world earlier this year. But no matter their form, major metropolitan newspapers are now going to have to fight to survive as our premier newsgathering institutions. **** ―The profitability of the newspaper industry is in decline,‖ Goldman Sachs newspaper analyst Peter Appert says. ―Changing competitive dynamics such as advertisers dollars, readers eyeballs, and changes in how readers access information and changes in how advertisers reach readers resulted in a sea change for the business. Traditional newspapers are most vulnerable because they generate two-thirds of their revenue from advertising.‖ America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 3 of 12 Historically, newspapers generated 70% of their revenue from advertising and 30% from subscriptions. Classifieds – particularly help-wanted, autos and real estate – accounted for 30% of the advertising segment. Until the late 1990s, newspapers monopolized the classified markets in their local areas. They realized high prices for this comparatively cheap, easy to acquire, content. The first sign of trouble appeared during the recession of the late eighties. At this time, newspaper circulation began declining in absolute figures, and advertising revenue dropped as major clients went bankrupt or consolidated. Newspapers responded with cuts rather than innovation. Generally they succeeded in protecting their profit margins. But this pattern of behavior proved disastrous when Internet technology emerged a decade later. The vast majority of newspapers stuck to their traditional ways and did not prioritize servicing their advertisers via search driven advertising platforms or their readers via innovative content on the web. They did post their content online. ―But in the mid-nineties, it felt more like an experiment, not an industry requirement,‖ says Joel Brinkley, former reporter for The New York Times. Over the next few years, the Internet matured into a major competitor rather than a prosperous opportunity. A swift and powerful foe, it cut into newspapers‘ advertising and subscription bases with increasing fury. And this competitor hit where it hurt most. In the late nineties, online classified sites like Moster.com, Craigslist.com and Autos.com began stealing the newspapers‘ most precious advertising dollars. ―Internet technology is the perfect application for classifieds,‖ Appert says. ―The search component is huge.‖ Today the outlook for newspapers‘ classifieds revenue is still gloomy. In their first quarter earnings statements both McClatchy Company and The Tribune Company reported that softening automobile and real estate markets are translating into shrinking classifieds placement. At the same time, non-affiliated Internet sites are capturing a larger share of these advertising dollars. Circulation numbers are also down. One year circulation figures for the 50 largest circulating newspapers have fallen at an increasing rate since March 2003. Circulation for these papers fell 3.2% between March 2005 and March 2006. And that after falling 2.5% between March 2004 and 2005, according to the Audit Bureau of Circulations. Major metropolitan papers were the hardest hit. Newspapers that recorded the largest drops in circulation in 2006 included the Boston Herald (-11.7 percent), the San Jose Mercury News (-9.4 percent), the Miami Herald (-8.8 percent), the Pittsburg Post- Gazette (-8.8 percent), and the Los Angeles Times (-8.0 percent). America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 4 of 12 In its annual report ―The State of the News Media,‖ The Project for Excellence in Journalism said that metropolitan markets are saturated with the most competition. These markets have a high proportion of Internet users and broadband penetration, compete with many suburban papers that provide local coverage, and attract free daily publications. Newspapers are fiercely competing for their readers‘ undivided attention. It is a tough battle to win in an age when the Internet provides information consumers with a variety of sources for free. Newspapers used to deliver ―all the news…fit to print‖ as well as recipes, movie listings, sports scores, personal ads and the weather to their readers. Today consumers can find all of this information, and even ―not-so-blind‖ dates, with the click of their mouse. This information is free, searchable and vast. Internet technology provides content in a way that traditional newspapers never could. And readers are beginning to expect a form of news that is far different than the coverage newspaper companies provided in the past. ―Readers‖ are becoming ―users‖ who have the ability to participate in news generation and dialogue. Commenting systems, citizen journalism channels and blogs invite readers to contribute to the journalistic process in a dynamic and immediate way. They no longer have to wait a day or a week to see their ―letter to the editor.‖ New technologies allow for twenty-four hour news that is on-demand. ―We no longer have to follow a story day in and day out,‖ Reinhardt notes. ―We can access a week‘s worth of stories with a click of the finger. That was never possible before. We had to build info day by day. New media has fundamentally changed the way that we consume.‖ **** ―Many intelligent newspaper executives who regularly chronicled and analyzed important worldwide events were either blind or indifferent to what was going on under their noses,‖ commented Warren Buffet in a letter to Berkshire-Hathaway investors earlier this year. The healthy economy of the late nineties insulated newspaper companies from the initial change that was underway. Newspapers‘ classifieds revenue steadily grew from $16.7 billion in 1997 to $19.6 billion in 2000. However the expanding classifieds market drove this growth. Newspapers were actually losing their market-share while the overall market was booming. But newspapers began to feel the pain of the changing industry dynamics after the burst of the Internet bubble, the September 11th attacks and the ensuing recession. Classifieds revenue numbers fell drastically. The figure dropped down to $16.6 billion in 2001 and continued to fall through 2003, according to the Newspaper Association of America. America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 5 of 12 Major metropolitan newspapers‘ earnings before interest, taxes, depreciation, and appreciation (―EBITDA‖), a metric that investors use to value a company, also fell. The average EBITDA margin for Gannet, McClatchy, the New York Times Company, Scripps, the Tribune Company and the Washington Post fell from 28.9 percent in 1999 to 24.8 percent in 2001. Margins rose slightly over the next two years, only to fall to an average 22.3 percent in 2006. ―Once the recession set in, newspapers realized they needed to rethink their business models. They have been playing catch up ever since,‖ Appert says. Former Merrill Lynch analyst Lauren Rich Fine thinks it took papers even longer to realize they were in dire straits. She says that when the economy rebounded in 2004 and 2005 newspapers noticed their growth was ―diminutive‖ compared to strengthening employment rates and real estate markets. ―They started to realize this was a trend they couldn‘t control,‖ she asserts. ―Before this time, they took the view that their brand name would carry them through. No one seemed to get the urgency of what was happening to them,‖ Fine says. It is common for mature industries to react slowly to changing industry dynamics. ―If historically you are a monopolistic business – and you feel vulnerable to changing – it is hard to do,‖ Appert notes. ―The culture of newspapers is a change resistant culture,‖ observes Reinhardt. ―Newspapers‘ creative responses tend to be smaller in scale and safe.‖ **** When newspapers began to realize the depth of their problems, they again responded by trying to fix their own model instead of inventing a new one. They cut back on traditional costs such as staffing and printing in an effort to save profit margins. As Rosenstiel says, ―the lack of innovation, the failure to broaden the definition of journalism, the addiction to the old business model‖ continued. Major metropolitans slashed newsroom staffs and closed foreign bureaus. According to The US Department of Labor, newspaper industry employment has sharply declined from a 420,000 headcount in 2001 to a 356,000 headcount in January of 2007 in newspapers nationwide. Major metropolitan papers around the country ordered massive lay-offs and buy-outs. The New York Times, the Los Angeles Times, the Boston Globe, the Dallas Morning News, the Philadelphia Inquirer all cut their staffs over the last three years. The cuts affected both domestic newsrooms and foreign bureaus. Today, no major metropolitan paper maintains a foreign bureau in Canada. ―Smaller metropolitan newspapers like the Baltimore Sun and the Boston Globe are in the process of completely America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 6 of 12 dropping out of the business of foreign reporting,‖ says Carroll. These traditional news- gatherers increasingly rely on stringers and news wires like Reuters and the Associated Press for their international content. The diversity of voices is lessening. Goldman Sachs predicts that newspaper employment will fall another 2-3 percent in 2007. Just this April, The Los Angeles Times and The Chicago Tribune announced that additional newsroom cuts were likely. In May, The San Francisco Chronicle announced it would lay off 100 employees. Both The New York Times Company and McClatchy Corporation announced that costs related to headcount were down in the first quarter of 2007. ―Compensation costs on a pro forma basis were down 8.7 percent,‖ reported McClatchy Chief Executive Officer Gary Pruitt in the first quarter earnings call with analysts. ―Salaries declined 8.8 percent, and employees on a full-time equivalent basis were down 5.6 percent,‖ he said. Newsroom cuts may eliminate costs in the short-run, but they also threaten the true value of newspapers: their newsgathering abilities. ―I worry that some publishers…[will not] appreciate that the print is what supports the journalism that attracts the traffic,‖ John Morton, an independent media analyst told the Project for Excellence in Journalism. ―I worry that they won‘t sufficiently invest in people to do it well.‖ Industry analysts ―agree that excessive newsroom cuts will lessen reader appeal, circulation and value to advertisers,‖ reported The State of the News Media 2007. Under new leadership, The Philadelphia Inquirer laid off 71 people last January. According to editor Bill Marimow, the paper needed ―belt-tightening‖ in order to provide a ―reasonable‖ rate of return. ―If we cut any more it would have been done drastic damage, but today we are operating as a robust organization.‖ Marimow said. ―Reducing headcount is a logical thing to do if you are trying to manage Wall Street expectations,‖ says former Merrill Lynch media analyst Lauren Rich Fine. ―But not all headcount is created equal. You can reduce headcount and not have an impact, or you can reduce headcount and have a horrible impact,‖ she said. ―The loss of so many good people is very hard,‖ says David Early, an editor at The San Jose Mercury News. His paper has gone through numerous rounds of cuts over the last few years. Early says that layoffs begin to affect the over all morale of the newsroom. ―When you have a place under duress, you have people who feel like ‗I have to get out of here‘… You have editors creating lists about who might be the first to go…It is very hard.‖ America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 7 of 12 Early says that ―newsrooms begin worrying about how to get through the next week‖ instead of ―worrying about the journalism.‖ In addition to scaling back their newsrooms, major metros are also shrinking the product itself. The New York Times Company announced it is reducing the size of both the New York Times and The Boston Globe. The San Jose Mercury News is also downsizing its paper from a 50 inch width to a 48 inch width. The shrinkage will save paper and printing costs. ―You are going to see everyone going to this size,‖ said Susan Goldberg, former Executive Editor of The San Jose Mercury News. Rosenstiel worries that ―the industry does not have the entrepreneurial risk taking and visionary spirit to save itself. It got too profitable, too corporate, too cautious, too fat cat.‖ **** Despite the newspapers‘ cost savings strategies, their profit margins continue to languish. In the age of the internet, innovative news products and business models are needed. But papers seem to be having more fun, and more success, experimenting with their products rather than their balance sheets. For example, though The San Jose Mercury News has weathered rounds and rounds of lay-offs and changes in leadership, the paper is doing some of the most creative multimedia journalism on the Internet. The paper is training its newly shrunken staff in new media technologies and trying out innovative story-telling techniques. Slideshows, videos and interactive maps abound on their site. The paper is also working to engage readers in a more compelling way. It recently published a restaurant review online and asked readers to respond with comments. One week later, the paper published the review and all of the reader comments in its print edition. Finally, the paper is using their re-sizing as an opportunity to rethink the lay-out and content of its print publication. ―The Merc is thinking about repurposing content,‖ Goldberg says. ―Online is well suited for breaking news, video, sound and multimedia reporting. In the paper we may do more step-back pieces, features, more analytical stuff.‖ Goldberg adds that the new media work has kept journalists excited about their work during a worrisome time. Niraj Sheth remembers how the staff excitedly talked about their experiments in multimedia journalism when he interviewed for an internship: ―They told me to take advantage of the opportunity to learn here. And I will. I am going to need these skills as journalist in the future no matter where I work.‖ America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 8 of 12 Major metros like the San Jose Mercury News are realizing that they can not merely place their print editions online. They are thinking about creative ways to evolve the art of journalism with new technologies. It is possible that the new forms of reporting will have economic benefits. ―It is nearly essential for major metropolitan newspapers to get audiences involved,‖ asserts Dan Gillmor a former reporter for the San Jose Mercury News and a pioneer of the citizen journalism movement. ―I think it could have a positive influence on both the paper‘s economics and the quality of their journalism. But the best reason to do it is to create a closer connection with people in the community,‖ he adds. ―Major met papers need to define what they are doing online,‖ Fine agrees. ―They should not just substitute what they are doing in print. But instead should segment their audiences in a more specific way.‖ Fine thinks that this segmentation may lead to better monetization. But so far ―better monetization‖ of online content has not occurred. While online readership is rapidly increasing, newspapers still rely on their print advertisers for the bulk of their revenue. ―I see more experimentation on the news side than I do on the business side at this point,‖ says Rosenstiel. ―But that may change,‖ he adds. ―Without question, the key challenge facing the newspaper industry is migrating its business model from print to electronic distribution, while preserving the traditionally appealing economics of the print business,‖ Goldman Sachs said in a March 2007 report. The challenge is difficult. While people are spending more and more time on the web, advertising rates there continue to lag those realized in print mediums. Indeed, internet advertising revenue equals a small percentage of most major metropolitan newspapers‘ total revenue stream. In 2006 McClatchy reported that their $130 million in internet revenue equaled 7.8 percent of their total revenue stream, one of the highest percentages in the nation. Gannet reported that their $400 million in internet revenue equaled five percent of their total revenue stream. Tribune Company‘s $230 million in internet revenue equaled 4.2 percent of their revenue pie and the Washington Post‘s $105 million equaled 2.7 percent of their revenue line. Since 2004, each of these companies‘ online advertising revenues grew by more than 30 percent a year. Yet the growth rates are slowing. The New York Times Company posted a 22 percent online revenue growth in the first quarter. Tribune Company, Gannett Company, McClatchy Corporation and the Washington Post also reported online revenue growth that was lower than the number recorded one year before. America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 9 of 12 The New York Times Company revised their 30 percent growth target for the year. ―We are trying not to over-promise,‖ Chief Executive Officer Janet Robinson said during the first quarter earnings call with analysts. ― It is very early in the year. The first quarter historically has been the toughest quarter in the online arena. The fourth quarter is typically the best quarter.‖ The Project for Excellence in Journalism estimated that the industry‘s online revenue growth would fall to 22 percent in 2007. ―For the first time newspaper sites are not maintaining share in total Internet advertising growth,‖ their report said. Many newspaper companies‘ online advertising revenues still rely heavily on classifieds. McClatchy Corporation reported that their online revenue consists of 80% classifieds and 20% retail. Yet the online classifieds market is different from the one that existed previously. ―While we are leading in our local markets online in the online classified categories, there is more competition there, and we won't have the same share of market that we have online that we have in print,‖ noted McClatchy‘s Pruitt during the company‘s first quarter earnings call. ―Circulation is down, classifieds are down, but I think demand for news content is up,‖ says Eric Schmidt, Chief Executive Officer of Google. ―The solution is that newspapers need more and more of their assets to be well known in the online world and appropriately compensated.‖ **** But no one knows when newspapers‘ online assets will transform into valuable products. The New York Times publisher Sulzberger suggested that his publication could be an ―Internet‖ paper in five years. Goldman Sachs analysts Peter Appert admits he can‘t predict the time frame, ―Cold be five, could be ten years,‖ he says. Online advertising trends suggest it could take longer. All seem to agree that the transition must happen quickly. ―Papers need to work double time to transition quickly,‖ Appert says. ―A period of transition is disruptive to profitability. But in order to transition quickly, they need to spend a lot of money.‖ ―The right solution is to throw as much as possible against the wall,‖ says Fine. ―Newspapers need to understand social networking and experiment in these areas,‖ she added. Bill Marimow, editor of the privately held Philadelphia Inquirer, agrees. ―In my opinion, enlightened ownerships need to invest in technology, perhaps for smaller margins in short America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 10 of 12 term in order to succeed in long run,‖ he says. ―Perhaps it is better for papers to be in private hands – they may be wiling to accept lower profit margins,‖ he adds. ―Newspapers need to view themselves as an emerging industry, with small margins or even losses, not a mature industry that is taking out cash flow and pocketing the money,‖ says Rosenstiel. Appert acknowledges that public companies that are closely monitored by their investors are at a crucial disadvantage. ―They have less flexibility to make investments because of analysts like me who are interested in short-term profitability,‖ he says. Donald Graham, the publisher of The Washington Post, who began investing in technology in the nineties and has created one of the top interactive news sites warned investors that they should not invest in his company if they valued short-term returns. ―We have been willing to suffer losses – large-scale losses – if we believed we could build businesses that would repay shareholders in the long term. Not all of these investments have worked out,‖ Graham said during last year‘s shareholder meeting. Graham noted that the company‘s online investments were costly but promised to boost long-term results. ―Washingtonpost.Newsweek Interactive, the electronic arm of the newspaper and the magazine, is a long way from repaying the losses over the years,‖ he said. ―But the future of the company looks much brighter because we invested so heavily in technology.‖ Graham is something of a maverick on Wall Street. The vast majority of publishers of publicly-owned newspapers have not discussed stomaching losses as part of their strategies. ―I will run the Tribune Company like I run my other companies,‖ Sam Zell told a group of Stanford students days after the paper‘s purchase was announced in April. ―The shareholders interest and the executives interests must be in line,‖ Zell said. A few weeks later, the Tribune Company announced that staff cuts were imminent. Graham may have a bit more flexibility than other publishers thanks to the Washington Post Company‘s ownership of the successful educational company Kaplan, Inc. The Post bought Kaplan in 1984 in an effort to diversify its assets beyond the newspaper industry. In 2005, Kaplan contributed 40 percent of the Washington Post Company‘s revenue. The educational company is continuing to grow and is helping to keep the newspaper business afloat through rough times. In the first quarter or 2007, Kaplan‘s revenue increased 16 percent to $476 million. America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 11 of 12 ―From an investor standpoint – the most successful stocks are the ones that took strong cash flows and used them to diversify beyond the media space. Scripps, Washington Post, Dow Jones did this,‖ Appert observes. Dow Jones is expanding into the information services space by investing in companies that provide hard data rather than journalism. In October 2006 the company acquired 50 percent of Factiva from Reuters, bringing ownership to 100 percent. Earlier this year, the company announced it is partnering with IAC/Interactive Corp to launch a personal finance website. Dow Jones‘ chief executive officer, Richard Zannino, said that the company‘s 71 percent increase in earnings per share, before special items, during the first quarter of 2007 ―is the latest indicator that our transformation plan — aimed at diversifying our heavy reliance on traditional print revenue — is working.‖ These company‘s acquisition strategies exemplify the most tried and true investment practice: diversification. But they promise little in the way of new and improved journalism. The question lingers: will major metropolitan newspapers find a way to preserve their newsgathering institutions as dynamic, staying journalistic powerhouses? Or will they transform into different kinds of profitable corporations? Or will they altogether disappear? **** For now, it appears that most metro papers are committed to saving the business models of their newsgathering arms as quickly as possible. They are finally embracing the Internet as an opportunity for profit-making. But they missed the chance to serve as pioneers in the industry. Fine says that it would have been ―brilliant‖ if newspapers had banded together, hired technology experts, and developed their own online search and advertising platforms in the nineties. Instead now they are turning to Internet ―veterans‖ for help. Google‘s Chief Executive Officer Eric Schmidt recently hosted a series of meetings with newspaper executives. ―Publishers were concerned about tactics to get them more online advertising revenue,‖ Schmidt said. Google has partnered with 70 papers and is serving as a large advertising clearing house for the companies. Yahoo and 12 newspaper chains also created an advertising partnership. The partnership will allow the newspaper companies to use Yahoo technology for advertising search and targeting as well as for regular search on their websites. America’s Major Metropolitan Newspapers Fight for Survival Final Thesis By Kristen Sullivan June 8,2007 Page 12 of 12 Llem Lloyd, the vice president of the Newspaper Consortium at Yahoo, says that the partnership ―expands the readership base‖ of each metropolitan paper. Newspapers‘ content is presented to all Yahoo subscribers in their relative areas. Generally the number of Yahoo users in a metropolitan area greatly outweighs the number of newspaper subscribers in that area. In return, the newspapers provide Yahoo access to their local advertising markets. ―Heretofore, local advertisers haven‘t advertised on the internet as much,‖ says Lloyd. ―There is a race on to get the local dollar and ad spend. Newspapers are in a good position to get that money,‖ says Lloyd. The deal promises Yahoo access to this ―local‖ dollar‖ as well. Schmidt notes that Google‘s clearing house is only a ―partial solution.‖ How can newspapers generate more revenue? ―Perhaps by monetizing news and personalities in the online world,‖ he offers. ―But this is a very real problem for democracy.‖ Technology gurus, newspaper veterans, budding journalists and the everyday reader agree on this point. ―If newspapers go down, the nation will be very much diminished in terms of national discourse,‖ asserts Carroll. ―We will know far less than we know now without all of the major metropolitan around reporters to dig it up. Who is going to go out and knock on doors, and cover politicians, and go down to city hall?‖ Sheth reminds us that there still are young people raising their hands for this opportunity. ―Somebody once said this: ‗there is no other profession where your job is to talk to the most interesting people and see the most interesting things every day‘,‖ Sheth says. ―I don‘t want to be a journalist for the pay, or the ease of life, but I really don‘t want to be bored and I can‘t think of anything else that would keep me as interested in as journalism.‖ As readers and as investors we should be focused on the success of Sheth and his peers. The health of our country depends on it.