The New York Times is taking a mortgage on its office building in Manhattan because it can't pay its bills. The LA Times has filed for bankruptcy. Many local papers are quietly going out of business. The newspaper is a venerable icon, but smearing ink on dead trees is, well, dead. Newspapers have failed utterly to adapt to the Internet, largely because they have been unable to distinguish between their core competency and their historical distribution medium. Newspapers have stubbornly clung to the notion that it is their job to throw wads of paper in driveways every morning. They have continued to do that long after there have been better and different ways to distribute the news (e.g. the Internet). Tweaking the font size of headlines, adding color pictures, and reposting news articles to the Web for a day or two before making them disappear are strategies that have only slightly delayed the inevitable.
The core competency of newspapers has always been to filter the news for readers; printing that news on dead trees has simply been the expedient way to distribute their work efforts for the past couple of hundred years. But we still need editors and reporters--in fact, we need them now more than ever--we have more news, from more sources.
The blogosphere has risen to the challenge while the old guard of reporters and editors have simply turned up their noses and pounded their chests about how they are "professionals" and bloggers are just sitting around in their pajamas. To coin a phrase: "Whatever...."
We still need news organizations, and there is plenty of ad money sloshing around online, but the newspaper business has just refused to adapt. It will be interesting to see how the void is filled.