There is no doubt the newspaper industry needs to change its ways as the Web becomes more popular with readers and advertisers. There has been a lot of talk about how newsrooms need to evolve (for example, my "5 Ws Post") but little focus on the newspaper "business" so it was interesting to read a comment from a group interesting in buying Baltimore's The Sun newspaper from Tribune Co. In discussing how his group was approaching the potential puchase, Theodore Venetoulis told Reuters they understood it will "not be an investment that will provide the usual yield and return that some investors will be used to." That's a pretty telling and blunt concession, although you could argue it's also a savvy negotiating tactic. That said, Venetoulis put the spotlight on the new economic realities of the newspaper industry, which needs to reduce its operating costs amid the loss of advertising revenue. For newspaper owners, this means maintaining operating margins and profits by becoming lean and mean (e.g. smaller, less expensive newsrooms) or accepting lower profit margins and profits compared with historical levels. While this is happening, newspapers such as the Toronto Star, Los Angeles Times and newspaper chains such as Tribune Co. and Dow Jones Inc. are under growing pressure from investors unhappy about slumping stock prices. Unless there are more investors such as Venetoulis willing to accept lower ROIs, newspapers are going to be much different creatures. My advice for newspaper owners: aggressively embrace the Web, and reposition your newsrooms to cover less news (the Web is increasingly taking over the job of covering breaking news), and focus on providing analysis, perspective, context. For many newsrooms, it may be having a smaller, smarter, more flexible group of reporters.