This is from the esteemed Tim O’Reilly’s blog (wiki him here) called O’Reilly Radar:

SF Chronicle in Trouble?

I hate to play Valleywag, but I’m hearing rumors that the San Francisco Chronicle is in big trouble. Apparently, Phil Bronstein, the editor-in-chief, told staff in a recent “emergency meeting” that the news business “is broken, and no one knows how to fix it.” (“And if any other paper says they do, they’re lying.”) Reportedly, the paper plans to announce more layoffs before the year is out.

It’s clear that the news business as we knew it is in trouble. Bringing it home, Peter Lewis and Phil Elmer Dewitt, both well-known tech journalists, were both part of layoffs at Time Warner in January (they worked for Fortune and Time, respectively), and John Markoff remarked to me recently that “every time I talk to my colleagues in print journalism it feels like a wake.”

Meanwhile, Peter Brantley passed on in email the news that “a newspaper newsletter covering that industry publishes its own last copy“:

“The most authoritative newsletter covering the newspaper industry issued a gloomy prognosis for the business today and then, tellingly, went out of business.

Many newspapers in the largest markets already “have passed the point of opportunity” to save themselves, says the Morton-Groves Newspaper Newsletter in its farewell edition. “For those who have not made the transition [by now], technology and market factors may be too strong to enable success.”

We talk about creative destruction, and celebrate the rise of blogging as citizen journalism and Craigslist as self-service advertising, but there are times when something that seemed great in theory arrives in reality, and you understand the downsides. I have faith both in the future and in free markets as a way to get there, but sometimes the road is hard. If your local newspaper were to go out of business, would you miss it? What kinds of jobs that current newspapers do would go undone?

I feel like crying. One key to a successful hard copy newspaper (yes it’s possible) these days, is in the integration of the offline and online components. Let people have what they want on paper, and the other stuff online and really converge the two. Don’t just print web hyperlinks on the paper copy and post ads on webpages for the hardcopy!

But the real issue is how these companies are structured. Short version: think of how Telstra has stopped aligning the business around “mobile” “wireline” and moved to “family” and “seniors”. Long version: There’s not a single media and entertainment company – here in Australia or overseas – that doesn’t force their traditional products/services to compete with new media. If new media is successful, they drop the old. Or call them (newspapers, radio, tv) “the loss leaders”. If the new media ain’t successful, the traditional media divisions do what they can to sabotage the venture further, refusing content and sticking with legacy web 1.0 technology. When you’re a newspaper business pulling in two directions, fighting over the ever-diminishing number of eyeballs willing to consume content from media companies, it leads to cannibalism. Quick, pass the salt and pepper someone – there’s not much left!

BTW Valleywag is a gossip sheet for the IT&T business.

Valleywag is a tech gossip rag. You people in Silicon Valley are far too busy changing the world to care about sex, greed and hypocrisy. But if you ever need a break, come visit us at Valleywag.

Sort of where our Aussie hardcopy Business magazines should’ve headed. But didn’t. (Business being just a big ol’ hotbed of juicy gossip and tall tales)