Billionaire Sam Zell said he and another big investor want to buy the Tribune. The other investor? Tribune employees. Here's how Marketwatch reports it:

Without providing details, Zell confirmed that his plan involves creating an employee stock ownership plan (ESOP) and that the ownership would be "a partnership between myself and the ESOP," Crain's reported.

This is the latest possible buyer on a short list of possibilities. Just a few weeks ago, Tribune execs were talking about going on a "self-help" program instead of selling. Maybe self-help includes selling to themselves.

I don't know much about the prospect of an employee-owned newspaper. It's the first I've heard of. Right? And "employee-owned" companies, like United Airlines, have their own problems. It's something I need to learn more about.

Anyone whose ever been linked from the Drudge Report knows there are a lot of readers on that site. And “a lot” is an understatement. Several media pundits are suggesting Drudge is now so widely read that it single-handedly caused the recent stock market sell-off.

U.S. News & World Report senior writer James Pethokoukis was the first to wonder aloud. Then ABC News contributor Michael Malone expanded on the idea. Here’s what Malone wrote:

On the really big breaking stories, especially the ones still emerging, Drudge will even post a flashing siren on the screen . . . and you better believe every journalist in America notices. So do a lot of other people: the Drudge Report can get 20 million hits per day, and is currently running more than 4 billion hits per year.

All of this is back story to what Pethokoukis thinks may have happened on Tuesday. It seems that former Federal Reserve chief Alan Greenspan gave a speech in Hong Kong on Sunday in which he said, reasonably, that this being one of the longest economic expansions in recent years inevitably certain countervailing forces were growing that would inevitably lead us into the next recession . . . Not exactly earth-shattering. A lot of people are saying the same thing . . . Indeed, the story was so unthrilling that it appears only AP covered it . . . And, as you might expect, it produced little more than a shrug from the financial markets.

But that's when Drudge stepped in. For no obvious reason, he decided to link to the two day old AP story. He then attached one of his classic scare headlines: "Greenspan warns of likely U.S. recession."

The headline's play - complete with flashing siren - crosses the line if you're The New York Times or any other rational newspaper. Does the Drudge Report bear any responsibility to be more careful with its words when so many people are reading? Fat chance, since what made it popular in the first place is being so unwieldy.

Drudge writes headline for its audience, everyone else be damned. So the main question is whether the readers of Drudge’s headline feel fooled. Do they feel it was the right play for a two-day old headline about a rather inane comment?

Will the fooled reader be more careful before reacting next time?

On the contrary, next time run to the market faster to sell! If the pundits are right, then now you know to be concerned whenever Drudge posts a negative word about the economy with a big siren. Worry not because there’s anything wrong with the economy, but because other people are reading. A lot of other people.

The latest fourth quarter figures are in from Gatehouse Media, and they've more than doubled profits. Can someone explain how that happened?

My bets are online.

Lucky for us, Howard Owens works at Gatehouse. Perhaps he can tell us how integral a role online played in such a giant success.

YouTube can’t defend itself by claiming it’s good for business. But that’s what it’s been doing since being sued by Viacom for posting its video clips without permission and then making money off the inevitable eyeballs that follow.

Here’s how SFGate.com reported it:

YouTube has argued that its users -- usually fans of the show -- have helped build buzz, generating increased interest for shows such as "Saturday Night Live." Indeed, CBS has said that putting its clips on YouTube has increased viewership for the "Late Show with David Letterman."

This argument sorely misses the point, which is that the health of future TV revenue will become increasingly dependent on Web advertising. Pundits have predicted that the computer and TV will merge, making viewing mostly on-demand via the Internet. Several of my friends already watch a lot of their TV online, getting the latest “Lost” episode from ABC.com, for example. Are content creators really OK with letting their audience “tune in” to YouTube to find whatever they want?

Viacom isn’t OK with it. And other content creators should follow its lead.

Letting anyone else post your video and make money off it means you don’t make money off it. For the likes of Viacom, your future business depends on suing the pants off YouTube now until they rethink the entire inner-workings of the site.

Google should first remember that the reason it bought the video-sharing site has nothing to do with providing content and everything to do with search. Before buying YouTube, the Google execs noticed a disturbing trend: When people heard about something cool that happened on TV, users went to YouTube to find the clip and not to Google Video. Since video will soon explode as a huge content-generator online, Google execs used their fat wallet and acted to protect their search brand. After all, they want to be seen as a search tool for everything, not only text.

Unfortunately, YouTube is more than a search tool. Unlike Google, content is actually housed on YouTube servers. Google’s regular modus operandi is merely indexing content and then pointing back to the original provider. If Google wants to protect its new brand for video search, then it should immediately offer a more traditional way for content providers to be searched via YouTube.

The Viacoms of the world should be able to provide YouTube with an RSS feed of pointers to its video clips located on their real homes at Web sites for Comedy Central and MTV. All of the title and keyword information that users tag YouTube videos with could be included in the feed. Heck, YouTube users could add their own tags even after the video is sent via the feed, similar to Digg, Delicious and other bookmark networks.

And, last but not least, YouTube needs to give copyrighted content the same attention it gives in stopping porn from being posted. As I’ve warned before, they’ll lose that battle in court.

SFGate.com columnist David Lazarus says newspapers should start charging for access to their Web sites. And if someone listens to him, then I'm going to get very rich.

Let me just promise right now. If any local newspaper decides to start charging readers for access to all the news on their Web site, I'm going to quit my job and start an online-only competitor that will eventually bankrupt your newspaper. That's how confident I am that the market won't accept a paid subscription newspaper online. Here's a few ways I'll do it:

• Ideally, the sucker of a newspaper will be located in a mid-sized market where Craigslist hasn't already taken hold. Because I'll use free classifieds as a way to build market share of eyeballs while also eating away at your bottomline.


• Then, I'll hire the reporters and sales reps you lay off, infusing my site with an immediate influx of people who know the area.


• To generate free marketing, I'll partner with the local television and radio stations to share headlines.


• Eventually I'll start a printed tabloid that is built around planning your weekend and things to do. And I'll mail it to everyone in the coverage area for free. Advertisers will flock to it because of low costs and high penetration.


• I'll list yellow pages entries, MLS housing inventories, and car dealership inventories all for free. Never charging to be listed. And when the audience flocks to such a useful site, the advertisers will buy banners around the content. I might even start up some of those printed weekly shoppers around the content. You'll be out of the market on some of your biggest revenue generators. And, soon, you'll close down altogether.

Jared Kushner, wonder-kid publisher of the New York Observer, bought PoliticsNJ.com. Thanks to MediaRevolutionary for pointing out the casual mention of this purchase in a recent New York Times piece.

Remember back to the Fresno Bee buying FresnoFamous.com and you’ll understand why this is such an important move, which I’m now officially calling a “trend.” Expect to see more newspapers buy the niche Web sites that flourished underfoot because they moved slowly toward capturing an online market.

In the case of FresnoFamous, a microlocal site focused on arts and entertainment had built a loyal community that the Bee couldn’t duplicate. Same holds true for PoliticsNJ, which boasts a growing reputation and passionate readership that it secured as the first to the market with a statewide politics Web site.

In all of our markets, there is room for just one PoliticsNJ. Just one. So act fast or later you’ll find yourself opening the company’s wallet to buy a competitor.

Politics is one example of statewide niche coverage. But there are other possibilities for statewide coverage. In Florida, we at HeraldTribune.com are trying this approach with hurricane coverage, having launched niche site IBISEYE.com.

The hurricane tracking service enjoyed more than 80,000 visits during 2006 and we expect more this season. The site takes something our paper is good at covering – hurricanes – and leverages it statewide.

What is your newspaper an expert on? Maybe it’s covering a national topic, such as energy, the environment, education or aging. Whatever. Some topics are national. Some are statewide. And some are microlocal. Bottomline is there are a lot of missed opportunities out there. Act now, or buy later.

A new database released at HeraldTribune.com in conjunction with a special series lets readers investigate their teachers and schools in detail never before so easily available to the public.

Readers can find out which teachers at which schools in Florida have ever been investigated by the state for inappropriate behavior. The stories focus on sexual misconduct, but the database is all inclusive.

Do a search for everything in Sarasota County, for example, and it gives you a breakdown of the number of cases, which are sortable by the victim’s age and gender, the type of incident and more.

Most interesting is a section called “probable cause documents and detail” where readers can get an in-depth look at each case returned by a search.

This data has never before been available to the public comprehensively. But the state is quickly trying to catch up and recently announced plans to launch MyFloridaTeacher.com, which would do much the same thing. We suspect ours will still be more comprehensive.

Kudos goes to Charlie Szymanski and Maurice Tamman, the creators behind IBISEYE.com, for putting together this tool.

A special multimedia graphic created by Melissa Worden takes readers through a “choose your own adventure” process of reporting abuse, with each step’s pitfalls explained by audio from an expert on the topic. This is meant to help educate parents who are thinking about reporting trouble on what to expect.

Or, readers can decide to report abuse to the Herald-Tribune anonymously by filling out a form. The Herald-Tribune is committed to following up on each report.

The staff really pulled this one together on their own, since I’ve been focused on other projects. And I think they’ve done a terrific job.

Taking a quick look around the industry at those newspaper companies to have reported their February revenues might require a healthy dose of Tums for the execs. Here's what you'll find:

McClatchy

The McClatchy Company (NYSE: MNI) today reported that consolidated advertising revenues in February 2007 decreased 5.2% and total revenues were down 5.1% compared to pro forma revenues (including the addition of newspapers purchased in the Knight Ridder acquisition and excluding the Minneapolis Star Tribune newspaper). Year-to-date advertising revenues declined 5.5% and total revenues were down 5.2% on a pro forma basis.

New York Times Co.

The New York Times Company announced today that in February 2007 advertising revenues from continuing operations decreased 6.0% and total Company revenues from continuing operations decreased 3.6% compared with February 2006.

Dow Jones

Advertising revenue at The Wall Street Journal decreased 10.0% in February on a 6.6% decrease in advertising volume, due to declines in the technology, financial, general and classified advertising categories.

Gannett

Gannett Co., Inc. reported today that total pro forma operating revenues for the second period declined 4.5 percent, compared with the second period in 2006.

Lee Enterprises

Lee Enterprises, Incorporated reported today that same property(1) advertising revenue in February decreased 1.6 percent compared with a year ago, and total same property revenue decreased 0.8 percent. Same property online advertising revenue increased 51.5 percent.

Tribune

Consolidated revenues for the period were $385 million, down 3.4 percent from last year’s $398 million.

Media General

Publishing Division total revenues declined 4.2 percent; Broadcast Division total revenues increased 27.4 percent, including the new stations, and same-station revenues decreased 2.7 percent; and Interactive Media Division total revenues rose 28.6 percent.

As expected, online revenues are the shining star but haven't been able to outpace losses from the newspaper side. This can't continue if newspapers expect to stay viable companies.

There is a solution. Cut expenses on the newspaper side. Usually that means cutting people and news hole, which is a sure fire way to lose readers. The better solution is to cut waste.

This industry spends millions of dollars at each paper in the country delivering unread sections of the newspaper. Stop sending them. It's that simple. Only send those sections of the newspaper that people request. The result is gigantic savings. It's called "zoning by interest" and I've started to outline how to do it here.

On a more grim note, I've also outlined the cost of not listening to me.

Damn that Roanoke. They just won a small fortune of NPPA awards for slideshows and galleries. We didn’t win any. Looking through the winning entries, Roanoke’s work does stand out.

The first-place winner for best news audio slideshow was this one from Roanoke. The big plus for the story is the sheer amount of natural sound paired with appropriate photos. And its string of anecdotes from life in Mexico are both interesting and well told by the reporter. With most of the subjects speaking another language, the reporter was a well chosen alternative to give voice to the story. This same story, with all of the same photos, also won for first place news photo gallery. At HeraldTribune.com, we wouldn’t have made a photo gallery and a slideshow using the same photos, but it’s paid off for Roanoke.

The Gitner crew also won third place in the same news slideshow category for another part in its special series, called “Land of Opportunity.” This one exhibits the same strength in the amount of natural sound. But it’s told in the voice of the subjects, teachers at a school, instead of the reporter. I’m particularly impressed by one moment with a “show me don’t tell me” quality, where the teacher talks about how many of the Hispanic parents of her students aren’t well educated and then we cut to a scene with the teacher talking in Spanish to one of the parents who doesn’t speak English.

In best features audio slideshow, Roanoke came in third place for what is just a beautiful interview. That’s really why it won. The story.

What’s really amazing is Roanoke entered a “week in photos” gallery in the features photo gallery category and won third place. When you can do that, you’re really on a roll.

Roanoke also won two awards for best sports photo gallery. I have to admit, though, that they’re really not Roanoke’s most impressive work. The photos are OK and there’s really no storyline. Not sure what the judges meant in the comments here: “While there were only two eligible entries in this field, both were good work.” There had to be more than two papers that entered, right?

The man who advises that newspapers charge readers to access content online, San Francisco Chronicle columnist David Lazarus, now says blogs aren’t as valuable as newspaper content because they lack original reporting. My suggestion for David is that he stick to subjects he knows something about before someone actually listens.

Two more reasons David doesn’t know what he’s talking about:

1) David Lazarus sorely misses the point by insisting that the act of dialing a phone and talking to someone inherently makes his column more valuable than our blogs. The people who he dismisses as lazy bloggers are actually experts in the industry. Jeff Jarvis has a blog and has been interviewed by numerous media outlets about the future of journalism. If David calls Jeff on the phone, does that make it reporting? Yes, but it doesn’t make what David writes more valuable than what Jeff writes.

Furthermore, if I read Jeff’s blog every day for a year, and David calls him on the phone once, which of us knows more about Jeff’s opinions when we write? I do.

What David writes isn’t more informed than what Jeff or I write; it’s less informed. Even if David calls a bunch of experts, years of experience working online and reading blogs from others in the field trumps a couple phone calls anytime.

2) David Lazarus doesn't understand economics. That's the point of my earlier blog entry. Newspapers can't simply agree to charge for their content because that will trigger a non-newspaper competitor to form and provide the same service for free. In Lazarus' mind, it’s still only newspapers providing local news. Not so in the modern real world.

David doesn’t believe me. He doesn’t believe any of us in the journalism industry who disagreed with him on our blogs. But who do you believe?

A) The guy who called a couple experts on the phone to ask their opinion and has never worked a day in online journalism.

B) The cadre of online journalists who research and read opinions from experts just about every day.

David’s right about one thing. When reading opinions, it’s important to consider the credibility of the source.

I hate to say anything about the whole subject because I don't want to detract from any of the great work being done by the award winners, but something doesn't add up in these results. Literally.

The NPPA Best of Photojournalism awards for online have two categories. Large Web sites are defined as those with more than 2 million page views per month. Small sites are defined as those below the 2 million mark. To be sure, here's how NPPA reports the winners in their news release:

Entries and winners in the Web division are classified as Over (for sites with more than 2 million page views per month); Under (for less than 2 million page views per month); Indy (for unaffiliated, and Web-only, journalism sites); and Blog (for amateur photo blogs).

The winners in this year's "small" category strike me as way too big. Or am I just so impressed by their general greatness that they seem larger than they actually are?

For example, the winners for best news audio slideshow included Roanoke.com, DemocratAndChronicle.com and PalmBeachPost.com.

Roanoke.com's online advertising section asks people to, "Choose from options that let you take advantage of the more than 4.5 million page views on roanoke.com each month."

DemocratAndChronicle.com advertising section boasts, "More than 100 million page views per year" for the site. That's a lot more than 2 million per month.

PalmBeachPost.com's online advertising section quotes its Omniture stats as saying it gets 1.3 million unique visits per month. Even if each of those people viewed only two page views, the site wouldn't qualify for the "small" sites category. The average site gets five page views per visitor.

Something doesn't add up. My fear is that these sites inadvertently entered in the wrong category and the judges didn't notice. I don't think any of the entrants was attempting anything nefarious. The fault lies in the confusing instructions on the NPPA entries page. Here's the unclear language that defined where a site should enter. "Over" was defined as, "More than 2 million unique page views/month." That makes no sense. There's no such thing. And "Under" was much the same: "Less than 2 million unique page views/month."

The optimistic among us read these instructions and figured the 2 million mark referred to unique users. The rest of us figured they meant page views. Turns out they did mean page views, according to their news release.

So what happens now? I don't know. Obviously, unless I'm missing something, there's a bug in these contest results.

I first started to wonder if everything was correct when one of the judges' comments noted that only two newspapers had entered the small sites section for Sports photo galleries. Roanoke and the San Jose Mercury News won those awards.

Recent interviews pit the views of programming whiz Adrian Holovaty against those of his boss, CEO and publisher of Washingtonpost Newsweek Interactive, Caroline Little.

During an interview with PBS, Adrian said that because washingtonpost.com is so separate from the rest of the newspaper, it hinders development of those nifty databases he so loves.

My preference would be to combine the teams, because there’s a certain level of overhead, like you’re not on the same network so you have to jump through hoops to get on the intranet. And there are cultural things, like you can’t get a reporter to do something because he doesn’t report to us, he reports to another editor. I can see how it was advantageous at the start to have them apart and let them do their own thing while the print folks weren’t paying attention. But now that everyone’s saying ‘the web is important and it’s front and center as the future of our company,’ it makes sense to roll them together now.

Little said just the opposite during a recent conference reported on Poynter:

When asked what the Post's online team does to make print-side staff comfortable, Little said, "We're very fortunate that our Chairman [of the Washington Post Company], Donald Graham, has been enthusiastic [about our online operations] and has not merged us back into the paper. They would just tell us what to do. Almost all the Web divisions of papers have been merged back."

So who is right?

Both are astute about the pros and cons. Separating the Web operations from newspaper operations ensures the Web side grows quickly, free from restrictions the newspaper would impose just by existing. Combining the operations does also combine the cultures, making for a more complete team and better journalism. But can you have it both ways?

Yes, you can, eventually. There is a time for everything. When newspaper Web sites were born, publishers had to pick one road or the other. Now your Web operation is an adult, ready to move into the next phase of its life.

The reason The New York Times, USA Today and others have started combining what had been separate is because the Web is now mature enough to hold its own when put into the same petri dish with a demanding newsroom.

If your newspaper took the opposite parenting route and kept Web operations within the newsroom from the start, then you’ve seen good cooperation but slow growth. So now is the time to separate operations. The intertwined cultures you’ve spent all this time creating should be strong enough to withstand the change.

Timing is everything. (Also know as: Adrian is right now. Caroline was right years ago.)

A story in yesterday's New York Times warns about the sudden drop in newspaper revenue felt across the industry in February. If you're reading this blog, you're a few days ahead of the news cycle. Readers here were warned about the disturbing numbers six days earlier.

My dream is that someone in the mainstream media picks up on my "Zoning by Interest" idea for cutting expenses without cutting jobs.