Maybe if there wasn't an impending recession, then newspapers could have skated past the thin ice protecting them from drowning in red ink.

If advertisers still spent like during the boom days, then the latest report from Borrell about which companies are raking in the local online ad dollars would be less consequential. PaidContent broke the news with this jarring statement: "Newspapers’ share of the local online market is now 27.4 percent, down from 35.9 percent in 2006, even as the total segment has seen 57.2 percent gains last year."

Newspapers are losing the battle for online revenue in their own backyards. Meanwhile, advertisers faced with economic woes are shrinking budgets and moving significant portions of what's left to the Web, where dollars might be more effective.

Is this the moment many of us bloggers have warned about for so long? In short, yes. Time is up. Pencils down. If your newspaper company is among those without a hold on its local Web dollars, then it will fail. In the world of business, that equates to being sold or closing down.

The Star-Ledger is among the first to start its death rattle. Here's how the neighboring New York Post reports it:

"The Star-Ledger in Newark, and its sister paper The Trenton Times, are "on life support" and could be sold if fewer than 225 workers fail to accept voluntary buyouts, their publishers warned.

The paper's owners, the Newhouse family, has already hired JPMorgan Chase and could unload the struggling dailies if it can't obtain new union contracts and get at least 225 non-unionized employees take voluntary buyouts by Oct. 1."

Although I have confidence in a few Web folks I know who recently joined that paper, Editor & Publisher's Joe Strupp criticizes the organization as one of the slowest to transition its business online.

"The cracks could be seen in recent years as the paper, like most Advance Publications dailies, was slow to expand to the Web. While the papers had Web sites, none of them offer a real breaking news pizzazz or individuality. All of the chain's cookie-cutter sites share the same template and are still among the most difficult to navigate. The Ledger didn't even offer a daily Web video report until this past week."

The Ledger seems to hope that cutting its staff dramatically will cure its sickness. Sounds like management hopes the financial cancer can be stopped by amputating part of the staff. I might agree if only they weren't asking for voluntary buy-outs.

If management was truly engaged and understood what was wrong with the business, then it would know which 200 people need to go and which need to stay. Look around the newspaper industry and you'll find similarly passive fix-it strategies.

If you can't hear the fat lady warming up in the wings, then you're not listening.

Before the clock ran out at BostonNOW.com, our advertising sales staff was busy pitching this idea to advertisers. The response, when presented to the right advertiser, was enthusiastic. Feel free to copy the idea, which I've offered to people across the country.

At least one Web director who tried it called me to say it's selling quickly, even in her small market. I guarantee you can sell it. I wrote the following letter to explain the concept to advertisers.

To our advertisers,

Blogatorial takes advantage of newspaper readers’ natural interest in finding information. Here’s your chance to convert their news habit into a passion for your business’ products and services.

A salon might talk with readers about personal grooming and then recommend their own products. A bank’s blog about managing your money attracts people who might be interested in advice from professional financial planners. The goal is to engage consumers early in their decision-making process.

The Blogatorial page is a permanent section on the BostonNOW.com Web site. All of the banner ads on your Blogatorial section are exclusively for your business. Because the business manages the blog on its own, you’re invited to post as much or as little as you want. There’s no limit. But we highly recommend getting the most out of your Blogatorial by posting regularly.

Run the blog as part of a campaign for a selected time period or let it work continuously and build an audience of passionate users of your product.

On its own, starting a blog costs just $300 per month.

But let’s not throw a party without sending the invitations. To lure the newspaper’s information-hungry readers, the Blogatorial package includes promotional ads in print and online that let readers know about your blog.

Contact a BostonNOW sales representative to create a package that fits your budget, and get started today using Blogatorial to convert consumers’ interests in the things they love into interest in your products and services.

This is yet another opportunity to bridge advertisers from the newspaper to the Web while retaining those big-budget print ads, which are used solely to promote the advertiser's new blog. Don't be surprised when advertisers pay to promote your site.

As I did with the "How-To" guide, here's everything I have to help you get started:

- Sales collateral
- Mock-up

This idea makes the most sense for news sites that are already taking advantage of community blogging on their sites. BostonNOW had hundreds of community bloggers, so mixing in a few featured blogs from advertisers was a way to build on an existing advantage. Otherwise, these blogs might same strangely out of place.

John Wilpers points out that too few papers are taking advantage of local bloggers in their midst. Blogatorial is just another reason why that's a huge missed opportunity.

In the category of "signs newspapers are about to die," the New York Times reports:

"While all publicly traded newspaper companies have seen their share prices fall in the last year — drops of 50 to 70 percent are commonplace — some have tumbled so far that any number of bargain hunters could snap up a controlling interest, despite the credit squeeze. But they haven’t."

A quote at the end of the article from Peter Appert, an analyst at Goldman Sachs, sums up the situation:

“The market cap of some of these companies, they’re bite-sized and it would be extraordinarily easy for someone to come in and buy them, and a year or two ago, someone would have . . . I would say that what happened to the last round of buyers scared off other bidders, though there weren’t many to begin with. And now there are none.”

What the NYT reports is what I've been feeling about newspapers during the last couple months . . . it seems time is up.

When it comes to local niche sites, being first to market can be the determining factor in who wins long-term.

The first to market has likely attracted a community of users who are engaged with the site through user-driven content such as blogging or even basic commenting. This is increasingly why newspapers can't beat down local competitors in niche markets.

The latest example is the Pittsburgh Post-Gazette, which bought a local moms site and relaunched it with a fresh design. Among the first examples I can recall was Fresno Famous, which was bought by the Fresno Bee when it realized it couldn't create a competing arts community online.

After all, there are only so many people in a niche audience. And if they already participate at one site, then it's unlikely they'll be moving. That's why even crappy sites that are effective community organizers can be a threat.

After sending more than 100 million visits to partner newspaper Web sites across the country, Yahoo labeled its consortium a glowing success. But I'm not convinced.

When users are asked where they get their news, respondents in Media Audits all over the country repeatedly name Yahoo in large numbers. Given that Yahoo is a competitor, it's normally a bad strategy to give away your only competitive advantage, which is newspaper content.

People who depend on sites such as Google News or Yahoo to get information become loyal users because they repeatedly find what they want. Newspapers are complicit in the success of these competing news sources. If users could no longer get the most important news of the day on Yahoo, then they'd stop visiting. Eventually, they might consider your site as part of their daily routine.

A one-off link is no substitute for a daily routine, no matter how glowing the quotes are from the news release. Here are a few:

"It's very exciting when our news makes it to Yahoo.com's top features," said Anthony Moor, Deputy Managing Editor, Interactive, The Dallas Morning News, and editor of dallasnews.com. "It's like a firehose blasting us with up to 800,000 page views in just a couple of hours. We've had placements that have accounted for up to 27 percent of the day's page views, and 65 percent of the day's unique visitors."

"One of Media General's major initiatives is to grow audience in our local markets," said Kirk Read, President of Media General's Interactive Media Division. "Yahoo!'s multiple entry points, incredible reach and tremendous site content get the great journalism created by Media General reporters and producers before news consumers when, where and how they want it."

If these Pollyannas don't want to take my word for it, they should pay more attention to how Yahoo describes the success of 100 million links.

"Placing Newspaper Consortium headlines on Yahoo! has given our users access to some of the nation's highest-quality reporting, and made our sites more relevant than ever," said Scott Moore, Senior Vice President and head of Media, Yahoo!.

In a competitive world, if these links make Yahoo more relevant to users, then aren't newspapers less relevant?

The New York Times reports today that Google's Knol is sending waves of concern throughout the media world, which is suddenly realizing that Google has the power to giveth and takeaway all that traffic on which they so depend.

Here's the pivotal quote in the piece:

While Google helps drive the success of other content providers, it is clear that the company will not shy away from entering what it considers “high-value” content areas, said David B. Yoffie, a professor at the Harvard Business School.

“If I am a content provider and I depend upon Google as a mechanism to drive traffic to me, should I fear that they may compete with me in the future?” Professor Yoffie asked. “The answer is absolutely, positively yes.”

I've been saying this forever. So I should probably be happy that a Harvard Business School professor is making the case. Perhaps now someone at newspapers will listen. Google News exists to eat your lunch, not to feed you lunch.

I've been sitting on a great, fantastic, awesome, super-duper idea for how newspaper's can take back the classifieds market. And boy do we need it. Tribune Co. reports that revenue declined at its interactive division, of all places. Here's what PaidContent said:

"Publishing revenue was particularly hard hit, falling 11 percent to $701 million. All the usual ad categories were hit hard, as were interactive revenues, which fell 4 percent, or $2 million (meaning a total of $48 million). Weakness in online classifieds contributed to the decline."

Classifieds had historically been about 60 percent of Web revenues, built on the back of newspaper upsells that are disappearing as quickly as the printed versions disappear.

So over the last few days, I've promised the following:

- An awesome idea for saving your classifieds, and,
- An explanation for why the Yahoo newspaper consortium might not be such a good idea.

Keep watch.

Check out this glowing story about the apparent success of CBS's purchase of CNET, which I recommended as part of my list of top Web companies that media should buy.

Although I don't claim to be an expert on eBay, I know an instance of the Innovator's Dilemma when I see one. The company announced it will emphasize its "buy now" program over the auction model that provided its start, the Times reports.

"Acknowledging that most online shoppers cannot be bothered with auctions, eBay plans Wednesday to announce changes to its fee structure that emphasize fixed prices over bidding. The move is intended to help eBay compete more effectively with Amazon.com and other big online retailers."

I'm crossing my fingers that eBay recognizes it entered the retailing market in the bargain basement, with an online-only discounter model that should never be scrapped entirely. All successful companies must protect themselves on the low-end of the market from upstarts.

Let this be a lesson to media companies, who so infrequently learn from anyone outside their industry. eBay began as a disruptive business model versus newspaper classifieds, although lower-end competitors such as Craigslist got all our attention.

If media companies weren't so worried about losing their classifieds cash cows, they would have protected their lower-end flank from attacks by Craigslist and eBay. If that had happened, what would moving to a new high-end promised land look like?

Don't expect Craigslist to find out. They won't even sell banner ads, which are an obvious way to let traditional advertisers benefit from a classifieds marketplace. They won't even sell contextual text ads, which would be another way. The next move for Craigslist is one the company is unlikely to take because of its "principles." That spells opportunity for competitors.

If you are in the final stage of the five stages of grieving, ready to accept the old newspaper classifieds model is dead, then I've got a way to regain the low-end. I've been promising to post it soon.

Your homework is to imagine what you'd do after regaining the low-end market. Consider eBay.