Newspaper websites seem to be the preferred source of local news for consumers, according to the Newspaper Association of America and comScore (SCOR). Fifty-seven percent of respondents are drawn to local newspaper websites. But take this with a grain of salt: 54% chose online portals and 53% selected local television websites. In terms of what consumers consider the most trusted local news source to be, newspapers have the lead, but the gap is narrowing. Now, only 33% choose the newspaper for this reason, with local television sites pulling in 32%.

"While newspaper Web sites often face dozens of competitors touting their own local offerings in any given market, they have been able to thrive by leveraging trusted brands and strong local content to appeal to consumers and advertisers alike," John Sturm, president and CEO of the NAA, said in a statement.

Often, we confuse winning with being the best. This isn't always the case. There are plenty of ways to get ahead when you don't have the top product on the market. The smoke-filled backroom meetings may be a thing of the past, but the net effect lingers. This is exactly what went down, according to a Reuters report, when Microsoft (MSFT) had a chat with News Corp (NWS).

Microsoft suggested a relationship with News Corp which would involve the latter's yanking its news sites from Google (GOOG) ... for a fee, of course. This would cost the search engine giant -- which is also a news aggregation giant -- access to some hefty publications, including the Wall Street Journal, the Sun and the New York Post.

We've put three quarters behind us in 2009, and the most recent one was merely another miserable step downward for the beleaguered newspaper industry. Total ad revenue plummeted in the third quarter to $6.4 billion for the print jockeys, a decline of 28%. This info from the Newspaper Association of America drives home the notion that conditions will only worsen for the newspaper industry. So, if you're hoping those shares of New York Times Company (NYT), Gannett (GCI) and Washington Post Company (WPO), holding your breath will leave you little more than dizzy.

Of the total advertising revenue generated in the third quarter of 2009, $5.8 million came from print, the lowest quarterly amount this year. The $623 million in online advertising sold by America's newspapers was also 2009's worst. Both are down substantially from the same quarter in 2008, when the newspapers posted print ad revenue of $8.2 million and online ad revenue of $750 million, according to NAA data. At this time last year, we lamented year-over-year declines approaching 20%. Now, we have the same feelings as ad revenue drops approach 30%.

It costs a fortune to cut fat. For regular people, it can mean hundreds or even thousands of dollars on gym memberships, special meals and organic restaurants. Yet, this pales in comparison to how much the Boston Globe is spending to lose some dead weight. It could cost the NY Times Co. (NYSE: NYT) property more than $1.2 million to bid adieu to the publisher that almost ran it into the ground.

Steven Ainsley has announced that he's going to retire as publisher of the Globe after having been at the helm for three years. Though quite proud of the two Pulitzer Prizes the paper picked up under Ainsley, the announcement didn't include the fact that he almost caused the newspaper retire before him. As usual, the newspaper is all too eager to talk about its awards, without even acknowledging the fact that it's on the brink of disaster.

The folks in the news business are probably growing to hate Mondays. Gannett's (NYSE: GCI) profits are off by more than 50%, and the New York Times announced that it's chopping 100 jobs from the newsroom, along with an unspecified number elsewhere in the newspaper. Like Gannett, the New York Times cites declines in ad revenue as the reason for the decision. The company is hoping that employees will take voluntary buyouts where offered, but it is prepared to conduct a round of layoffs if necessary.

The newspaper, which is the flagship property of the New York Times Company (NYSE: NYT), cut 100 newsroom positions last year, mostly through voluntary buyouts, before a "relatively small" round of layoffs. This year's 100-job cut is approximately 8% of the newsroom, but the paper will still have the largest in the United States. Approximately 1,150 reporters and editors will remain. Already, 100 jobs have been slashed on the business side, leaving it now staffed at 1,850.

Gannett (NYSE: GCI) lost more than half its third-quarter profits year-over-year, as the newspaper industry shows yet another sign of decline. A substantial drop in ad revenue was the primary reason for the plunge.

The newspaper giant was able to stay in the black because of aggressive cost cutting, a move that can work for only so long. For now, it's the most popular option available to the beleaguered industry, as evidenced by a New York Times (NYSE: NYT) announcement that it would slash another 100 positions from the newsroom, and more positions elsewhere.

After months of speculation and years of underperformance, the New York Times Company (NYSE: NYT) has decided not to sell the Boston Globe and related businesses. The company claims that the changes made at the Globe to slash expenses and right the ship financially have made it worth holding on to the newspaper. This comes after two parties submitted their final bids (similar financially) for the beleaguered 137-year-old property.

The NY Times Co. picked up the Globe in 1993 for $1.1 billion. Since then, it's watched the paper's revenue and circulation plummet, a situation worsened by the advent of the internet and the newspaper industry's generally slow response to it. Now, it's apparently worth just under 10% of NYT's original purchase price, with the offers pushed higher by both parties' willingness to assume $59 million in pension liabilities.

The clean technology wave just got a little bigger. This tends to be a side-effect of interest from billionaire investor George Soros. And, as usual, it's more than just money; it's more than just a return. Soros, yet again, is trying to save the world. Interestingly, the bold move was announced at a meeting on climate change sponsored by Project Syndicate – an international association consisting of 430 newspapers from 150 countries (and thus with clear ties to the past, rather than future).

The investor and founder of Soros Fund Management LLC is planning to put $1 billion into clean-tech opportunities using what he calls "rather stringent criteria," which involves being "profitable but should also actually make a contribution to solving the problem [i.e., of clean technology adoption and proliferation]." Soros didn't provide any other details on the nature or scope of his investments.

The NY Times Co. (NYSE: NYT) has decided to double down on a failing strategy: Charge more for print. As circulation declines, the ailing newspaper company has decided to extract as much revenue as possible from its tangible product, despite the fact that the market is shrinking.

Starting Monday, the company's flagship newspaper will cost $2 an increase of a third from the previous newsstand price of $1.50.

A ways back my father did some very interesting economic research into what happened to the price of drugs when a generic entered a market previously owned only by branded drugs. His findings? The entry of generics actually caused prices of brand prescriptions to rise as people who insisted on the branded prescription were willing to pay a higher price.

I was reminded of that research in reading today about the continuing decline in circulation of the big papers. The only one that managed a circulation gain was the Wall Street Journal. The hand wringing continues over this horrible state -- but this is a sign to the papers to make lemonade rather than lemons.

Most newspapers were just hanging on in 2008, but things got a lot worse in the first quarter of 2009.

The New York Times reports that some newspapers saw their ad revenue plunge 30% in the first three months of the year compared to the same quarter in the prior year. The decline in spending brought about by the recession is combining with the flight from print to devastate publishers.

According to the Times, industry analysts and executives "are expecting declines sharp enough to wipe out profit margins at many papers that, despite two years of battering, had stayed comfortably in the black, and to push already-weak publishers closer to bankruptcy, perhaps even closure."

The reports of newspapers' demise have not been greatly exaggerated. The Rocky Mountain News, Colorado's oldest newspaper and one of two daily papers in Denver, announced it will publish its final edition, Friday, February 27th.

The date is two months shy of its 150-year anniversary.

Update: The final issue of the paper was printed today, February 27th, with a commemorative edition whose headline read "Goodbye Colorado" and which included some of the newspapers' Pulitzer Prize-winning photographs and stories. The headline on the front page read "Stop the Presses."

The paper had been sharing business services, including advertising and printing, with The Denver Post in a U.S. Justice Department-approved arrangement since 2001. As of Saturday, however, the editorial voices in the community will be reduced to one.

Yesterday the New York Times (NYSE: NYT) suspended its dividend, following other struggling newspaper giants like McClatchy in a desperate move to save cash amidst the Perfect Storm buffeting their industry. A deep recession, sinking paid subscription rolls, and crashing classified and display ad sales caused by competition with the Internet have all conspired to put the entire newspaper business on life support far faster than almost anyone imagined possible.

A number of financial bloggers and technology titans are now saying the Times won't survive the year. Even after suspending the dividend, NYT will struggle to be cash-flow positive, particularly considering it has to service a crushing 14% interest burden on the recent Hail Mary $250 million loan package from Mexican billionaire Carlos Slim Helu.

It isn't news that newspaper circulation is in a death spiral but there is some good news for publishers: More people are visiting newspaper websites more frequently.

According to data from Nielsen Online, 40 million Americans visited at least one of the top 10 newspaper sites in December -- That's a 16% increase over 2007. Those visitors viewed newspaper websites an average of 6.3 times in December, compared with 5.8 times a year earlier.

That data is encouraging and suggests that the newspaper business model may not be as broken as we think: The method of charging people for the delivery of yesterday's news that can be viewed online for free the next morning is clearly not sustainable -- but the reporting operations of newspapers may be.

The New York Times Co. (NYSE: NYT) has plastered its desperation for cash over the front page of the morning newspaper. Reuters reports that "The New York Times is selling display advertising on its front page, its latest step to seek new ways to make money as it deals with a prolonged ad revenue downturn."

Monday's edition of the newspaper contained an ad for CBS below the fold on the front page.

Purists might be upset about it but the fact is that stuff like this may be The New York Times' best shot at staying independent. With the stock trading at under $8 per share, even the famously dormant Sulzberger family may decide that they've seen enough and look to sell -- If the company runs out of cash, they may not have a choice.

So if you're a supporter of journalism, buy the New York Times everyday -- ads on the front page are better than nothing.