San Francisco Bay papers: the industry 'canaries'

Northern California is what the U.S. newspaper industry might look like a year or two from now -- and it's not a pretty picture.

The San Francisco Chronicle, led by former Gannett executive Frank Vega, and The Mercury News, an hour south in Silicon Valley, are both pretty much on life support. They were among the Bay area newspapers hit early and hardest by Craigslist and other online rivals for advertising. These papers are canaries in the newspaper industry's coal mine: Their fate could foreshadow the future elsewhere as technologies emerging first here spread further across the nation.

The Chronicle has been losing as much as $1 million a week since Hearst Corp. bought it in mid-2000. That makes it the perfect candidate to do immediately what all papers will do one day: go Web-only, says BusinessWeek's Jon Fine. "Killing print requires acknowledging not just that the old mode is dead but also that the future means less revenue and shrunken staffs,'' Fine wrote in July. "This is why it makes sense soonest at a money-losing newspaper already grappling with those realities, and one in a major city that generates enough local ad dollars to support a sizable online business."

Vega (left) became the Chronicle's publisher in January 2005. Previously, he'd been CEO since 1991 of Detroit Newspapers, the partnership that at the time provided business and production services to the Detroit Free Press and the Detroit News.

Gannett Blog recently toured San Francisco's SOMA neighborhood, where companies from MySpace to former Vice President Al Gore's Current TV web start-up are taking root.



[Images: Vega by Chris Stewart, Chronicle; this morning's Chronicle, Newseum]