I love Molly Ivins, but I wouldn’t go to her for business advice. Still, her column today reminds anyone who’s interested of a very good point about the recent sale of Knight-Ridder newspapers: that far from being failing businesses, the papers had a 20 percent profit margin.

Lots of business would kill for that kind of margin. Then why did the KR board bail? Because newspapers are seen as a "failing" business, one "in decline." It’s true that they’re losing circulation, but that could be perfectly good thing: why spend oodles of money reaching the N+1th reader who doesn’t see the value in your product? (Propping up circulation, by the way, is what killed Life magazine; circ acquisition and retention was costing more than the marginal rate increase the ad sales people could charge per reader.)

Of course, seeing a newspaper as a local branded information resource rather than a bunch of pulped pine trees might extend profitability. But that would require looking at a financial enterprise as more than a quarter-to-quarter business. As Molly says:

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I don’t know any of the players so I don’t know the inside baseball, but the Dow Jones reorganization announced today feels like most of a right move. It puts the online and print versions of the WSJ under the same management, so all those horses have at least a chance of pulling in the same direction. The NYTimes has the same idea, combining print and online into a common newsroom. (The NYT’s locution of its "Continuous News Desk" has always bugged me though; isn’t the very nature of news continuous?)

Sticking the DJ wire in a different group, along with the stock averages and other market services, first struck me as a little odd but has a strong logic. The wire and market services are, essentially, reseller services and are available to be repackaged. Not so much the Journal or Barrons. The client bases for the newspapers and the information services are just different.

The Ottaway newspapers are an entirely different business and need their own separate management.

A long Salon article that starts out unpromisingly by repeating old news about the dumbed down free tabloids aimed at young adults gets suddenly exciting at the end of the third take. (You’ll have to watch an ad to get that far, but it’s worth it.) That’s when Farhad Manjoo introduces us to Rob Curley, the new media editor of the Naples (Fla.) Daily News.

 Curley gets it — completely and profoundly:

The Curley method is to convert small regional newspapers into powerhouses on the Web and make them indispensable to their communities — as indispensable as print newspapers once were, or should have been, to the regions they served. He counsels newsrooms to focus their resources on gathering local news. With the Web, national news has been "commoditized"; you can get national news anywhere, and local newspapers aren’t going to beat out bigger papers — or other news sites, such as Yahoo — that provide national coverage.

 and…

When papers embrace their mission to provide local news thoroughly, efficiently and in any manner people choose — in print, online or whatever other device people may want to start using tomorrow — audiences will flock to them, Curley says. He points to his efforts in Lawrence, Kan., where the three Web sites he created for the Lawrence Journal-World became the center of that college town’s daily life.

Can this business model stand on its own? No one’s proven it yet. But this is where newspapers win — by divorcing themselves from the medium and focusing on the information and the audience.

Ten years ago, when I was editing NetGuide, we’d review hundreds of Web sites a month. My publisher once asked me what our criteria were. We ask ourselves, "Is it useful?" I told her. Does the site have good information presented in a way that its readers want? The publisher, expecting a detailed and weighted punch list of features, was puzzled by the response, which may be one reason NetGuide ultimately failed.

Ten years later, the answer’s still good. Own your market. Be useful. People will come.

Let me be clear: I want to either work for Rob Curley or be Rob Curley. This is a guy who knows the answer.

Slate’s Daniel Gross gets all meta today with a fin de siecle article claiming that blogging is dead because Big Media is noticing it and wants to play.  Like an good trend piece, he picks four data points and extrapolates:

• Whatever trend gets on magazine covers is immediately dead.
• Early entrants sell out
• Big Media buys in
• Gullible VCs buy in 

A close reading, however, shows that the four points are really just two: The Sports Illustrated Curse, and Money Changes Everything.

Is all the corporate money spent on blogging being spent wisely? Of course not; that’s why it’s called venture money. Money in media goes where the audience is and it’s insanely valuable to find an audience that already exists, as opposed to one that you have to try to create.

The problem isn’t that online media valuations are out of line. The problem, which Gross never quite gets to, is that big valuations expect big returns. Ad money is flowing out of print and out of mass media and into online media. The returns will be there, at least for a while, because the technical investment — servers and bandwidth and whatnot — is long since sunk.

The trick, as it always is, is to find a way to converse with this audience in ways it finds appropriate. And what’s different in 2006 than it was in 2001 is that the audience is much bigger now and that it grew by itself.  The other difference: marketers have five years’ experience in figuring out how to converse with an online audience — Slate’s own valuation notwithstanding.

And if they blow it? The audience will stop listening and find some other place to congregate and talk amongst itself. At which point the cycle will begin again.