So, a random friend of the Atlantic Monthly's James Fallows, who happens to work at Google, appears to have a clearer view of what ails newspapers than nearly anyone in the newspaper biz. Here's the link to Fallows, quoting his unnamed friend: http://jamesfallows.theatlantic.com/archives/2009/05/more_on_google_craigslist_and.php
So, what would William Randolph Hearst do in the current environment? As the 'oracle of Google' suggested to Fallows, probably not wringing his hands and moping. Of course, Citizen Hearst had his own issues, but it would be great to see newspapers jumping into the future, rather than longing for the good old days.
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