Fortune reports that Geffen considered buying a 19 percent stake held by Harbinger Capital, a hedge fund. (Google also took a look but passed) Geffen — or anyone, really — would be a better owner than the Sulzbergers, the kleptocratic parasites who inherited their controlling stake. (The Sulzbergers like to style themselves as guardians of the Times's vaunted journalistic values, but the current generation seems far more interested in their dwindling dividends.)

If not Geffen, then who? Probably Carlos Slim Helù, the sketchy Mexican telecom mogul who's been accumulating a stake in Times Co. shares and debt. The debt, in particular, positions him to take over the Times if its finances take a tumble. We must stop this outrage! The Times is too great a national treasure for it to land in heterosexual hands.

Two sources close to FriendFinder says that Anthony Previte, FriendFinder's chief operating officer, "announced he is closing down Penthouse because it does not make any money and is in the red for production."

We called FriendFinder CEO Marc Bell to ask him about the rumor. He laughed, and then pointed out that since his company had filed with the SEC for an initial public offering to raise $460 million, if he planned to close the magazine down, he'd need to disclose that to the investing public.

Either way, folding the magazine wouldn't be a big blow to FriendFinder Networks — one source pegged losses from a recent issue at $16,000 — since the company makes most of its money off of raunchy personals websites like Adult FriendFinder, which Penthouse's publisher acquired in 2007. The bigger issue: The company's management can't seem to agree on whether to stay in the print business. On top of that, the company's facing a lawsuit from its former director of HR.

Television has been distracting people from the written word long before the Internet came along. And while the Internet has been good for reading, it's mostly encourage the consumption of short-form writing.

Print is a much better way to read long chunks of text — fewer distractions, easier on the eyes, portable from room to room, etc. — and to the extent the Kindle replicates these technological advantages, it is basically a crippled laptop.

But Granger imagines an e-reader that advances beyond the "crude" Kindle. He thinks better technology will do the trick:

... as electronic readers improve, as they add graphics and design and, eventually, color, even more people will opt for the more sustained, contemplative experiences more often. And all will be well with the world.

What he forgets: The Kindle has a built-in Web browser, though few people use it because the Web is not particularly attractive in black-and-white. If it adds color, won't people inevitably use it to read websites, and thus fewer books, just like they do on PCs? There goes Granger's theory out the window.

We suspect he has another reason for touting the Kindle, though. Hearst, the owner of Esquire is working on its own e-reader. By paying the Kindle such a backhanded compliment — right idea, wrong device — Granger is carrying water for his publisher's business interests. And not for the first time.

Hearst has invested in E Ink, a Cambridge startup whose low-power screen technology is used in both the Kindle and Hearst's planned reader. E Ink appeared on a splashy, Granger-praised Esquire cover last year. Perhaps this E Ink-stained wretch has even handled the product he envisions killing the Kindle? If so, it's too bad Granger won't tell his readers how much he loves that, too.

Armstrong, Google's top U.S. sales executive, has invested in Patch, a company which promises to develop "hyperlocal" websites focusing on news coverage specific to their communities. He's putting in money from his own fortune — money which he made through Google's lucrative IPO — but one must imagine New York Times executives view Patch as a stalking horse for the search engine.

Hence the new Times feature called The Local. Besides Patch's three towns, The Local will also cover two Brooklyn neighborhoods. It will be entertaining to hear the Times spin on why it picked Patch's turf to launch The Local. Milburn's attractive demographics? South Orange's thriving cultural scene? No, the Times is waging an old-fashioned newspaper war — on the still-unfamiliar turf of the Internet, against a Google millionaire. This will be by far more interesting than anything else that happens in Maplewood.

Hearst's e-reader will be larger than the Kindle — more like an 8.5 x 11 sheet of paper. And it will use technology from E Ink, a Cambridge, Mass. startup Hearst backed more than a decade ago. Hearst hopes to distribute electronic versions of its magazines and newspapers on the device, which a Hearst executive told Fortune will be out later this year.

It's like a terminal cancer patient putting faith in some herbalist's shark-bone treatment.

"The question now is, will readers give up their newspapers and magazines for these new readers?" asks Fortune. Uh, no. The question is whether people will give up their iPhones and netbooks for these new readers. Cheap laptops and smartphones are an irreversible trend. Factories in Japan, China, and Korea thunder out the mass-produced parts for these devices, which make their economics compelling. And a PC has the virtue of not being designed by a publisher more interested in protecting an old way of doing a business than serving readers.

Hearst has exercised its E Ink fetish before, when Esquire used it for an expensive, pointless cover. But the fact that Hearst owns a stake in E Ink is the silliest possible reason to champion the technology. Economists would call that a sunk cost: It's money already spent.

Newspaper and magazine publishers seem desperate to find some new trick to preserve the scarcity on which they used to profit. In a world overflowing with media, that is impossible. And editors and publishers are not clever technological tricksters. The E Ink reader will start out black-and-white. Wait, aren't the glossy photos and gorgeous layouts why we pick up magazine sin the first place?

What they ought to be doing is fixing their websites: Adding comments everywhere, publicly displaying the comments and pageviews stories garner, and — crucially — adjusting the story mix in light of that information. It's unlikely to happen. The makers of magazines are so used to dreaming up story ideas in their skyscraper aeries. It will never occur to them that their readers might actually be smarter than they are.

Smart enough, at any rate, not to buy a gadget designed by a magazine guy.

(Image via Gizmodo)

Of course, Google is planning to keep most of that profit. If Larry and Sergey plan to share anything more than links with the newspapers whose headlines it displays in Google News, they haven't signaled their intentions.

Good on them! If the newspapers had ever been even a tenth as cynical, opportunistic, and clever about exploiting their product and finding new advertisers as Google has, they wouldn't be in this mess. Instead of condemning Google of "stealing" their content, newspapers should be grateful that someone's making a pie — of which they can now ask for their fair share.

For example: A search for Yahoo CEO Carol Bartz on Google contains an ad for a DVD of Bartz's speeches. Can you imagine a newspaper salesforce thinking to solicit that ad, let alone running it in a timely fashion? There's a host of potential advertisers like that whom the newspaper industry has never tapped.

We're no doubt going to hear a lot of newspaper grandees groan that, like Apple in the music industry, Google will capture most of the profits from the online sale of their product. Did it ever occur to them that Apple might be reaping more of those profits because consumers think the portable convenience of the iPod and the one-click simplicity of iTunes have more value than the time-filling music itself?

Unlike the record industry, though, which for a good couple of decades had an enormously successful distribution medium in the CD, the newspapers have never come up with an electronic version of the news that is at once profitable for them and popular with consumers. Their websites are at once too large to shut down and too small to sustain them. The only newspapers seriously considering pay-to-read schemes are also-ran operations like Newsday. The right answer is embracing new sources of traffic (and hence revenue) like Google News — not shutting them off.

A few publishers understand this — generally outcasts like Dean Singleton, who's widely hated by his employees for cutting costs, and who recently killed one of his own by having his scrappy Denver Post outlast the Rocky Mountain News, which printed its final edition today. "The Internet world is a very competitive world," Singleton told the Times. "We don't have to let them take our content. We let them do so because it drives traffic." He's right: If the newspapers withdraw their headlines from Google News, scrappy Internet publications will gleefully replace them. To newspaper publishers who grew up with virtual local monopolies, this thought just doesn't occur.

Publishers should be rejoicing that Google is trying to make money off their headlines. At least someone is.

They've already lost hundreds of millions of dollars in less than a year. Executives at the cable-TV conglomerate announced the plan even as they said they were writing down Newsday's $650 million purchase price by $402 million. "We plan to end the distribution of free Web content," said Cablevision COO Tom Rutledge in a call with analysts.

What that really means: Newsday plans to end its distribution on the Web.

Employers are willing to foot the bill for subscription at work to papers like the Wall Street Journal and the Financial Times. But its inconceivable that consumers will pay for a rather ordinary product like Newsday.com, especially in a media market served by four large dailies, none of whom have announced plans to charge for their websites.

Newsday's Web traffic will surely plummet. Except for some local Long Island news, there's little Newsday readers won't find elsewhere. No doubt some enterprising local bloggers, or startups like Patch, will pick up the slack.

No wonder that a bunch of cable executives came up with this plan. With their local TV monopolies relatively undisturbed, and only limp competition from the nation's telecom oligopoly, they just can't conceive of a competitive market. If Newsday were, on its own merits, an outstanding publication, they might have a shot at charging for it. But it's not. So the cable guys are stuck doing the one thing they know how to do: Hike prices.

The absence of a strong newspaper, a contender with the New York Times, Washington Post, or even Los Angeles Times, has long frustrated the intelligentsia of the Bay Area. Instead, we have a sorry ink-on-dead-trees product that even some employees call the San Francisco Comical.

The joke is that the Chronicle isn't really Hearst's paper. The chain bought it in 2000 after publishing the San Francisco Examiner, the one-time "Monarch of the Dailies," for more than a century, and overseeing its slow decline. (Time wrote about the Examiner's troubles almost a half-century ago.)

In the 2000 deal, Hearst merged the staffs of the Examiner and the Chronicle into a single Chronicle newsroom, all but guaranteeing losses. And indeed, in its overstaffed state, the paper has not made a profit since 2001, and lost $50 million in 2008. (The Examiner, meanwhile, has passed through various owners and is now a sporadically distributed free tabloid owned by railroad billionaire Philip Anschutz.)

So Hearst is stuck with a title to which it has no sentimental attachment, which shows no signs of making money, in a tough market (the region has 21 daily newspapers spread around 11 counties). The publisher has already threatened to shutter the Seattle Post-Intelligencer. The trend towards reading news online is better established in the technophiliac Bay Area than elsewhere. It no longer seems so unfathomable that the Chronicle might close. The shame is that not many people might mourn its passing.

Update: SFist has a memo from Chronicle publisher Frank Vega.

Whitehouse.gov bloggers are a little slow on the draw. The Washington Post beat them by 15 minutes and posted a more complete transcript of the Q&A session at President Obama's Ft. Myers, Fla. town-hall meeting. (As for us: Pareene's off today.) But they have the chatty tone and completely obvious bias of most political bloggers down cold! Plus they did it reverse chronological order, just like a real liveblog.

In Time's latest cover story — which you can read without charge on the World Wide Web — Isaacson writes that publications cannot rely on advertising revenues alone, and should get their readers to pay per article instead:

A person who wants one day's edition of a newspaper or is enticed by a link to an interesting article is rarely going to go through the cost and hassle of signing up for a subscription under today's clunky payment systems. The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment.

We ought to cheer the notion that publications will try to start charging for content online. Writers at ad-supported publications will pay the fees and deliver crisp summaries and analysis for free. Outlets which charge will end up reduced to the business of trade publications, which only manage to extract money from people who need the information for their job.

That's pretty much what Time did in its early years, when it was a fancy printed blog. Editors there subscribed to the New York Times and other papers, and wrote up a weekly digest, which Time's founder, Henry Luce, then sold for rather less money than one would pay at the newsstand for all their sources.

But we have to wonder where Isaacson got this idea? Here's a hint: In 1995, Josh Quittner, whom Isaacson had hired the year before, wrote an essay about "Way New Journalism" for the online arm of Wired. Quittner wrote:

Nearly two-thirds of the cost of putting out a newspaper or magazine is the cost of printing it (paper, ink, printing presses) and distributing it (trucks, delivery folks, mail). Uncouple the content from the production and distribution costs, and you see the kind of cash we're dealing with here. Introduce the possibility that by the end of the decade, 100 million people will be on the Net. Now, give those people the technical ability to pay 3 cents for each and every story they read. If only 1 million people read, say, one Time story on O.J. Simpson, that's US$30,000. Pretty soon, you're talking about real money.

When Quittner noted that the technical infrastructure for such micropayments was missing in 1995, it was true. When Wired repeated the claim a year later, it was still true. But when Isaacson mouths the verity in 2009, he makes a fool of himself. He writes that PayPal does not accept micropayments; in fact, it does. Amazon.com lets anyone build their own micropayments service using its billing engine. The existence of 99-cent iTunes songs and 10-cent text messages show that consumers are willing to pay small amounts for digital content.

The problem with micropayments is not technology. It's that consumers are fundamentally uninterested in paying per article. Isaacson dismisses the problem of "mental transaction costs," but it's quite real. It's almost impossible to determine the value of an article before you read it. And the amounts we're talking about — 3 cents? 5 cents? 10 cents? — aren't worth the time it takes to decide how much one is willing to pay.

The advocates of micropayments also forget the basic law of supply and demand. Editors today increasingly talk about "commodity news" — the numbingly same mass of articles written about the same news event, adding nothing to the reader's knowledge. Why would anyone pay for those? The snobs of print media also forget that they have long competed with free radio and television news broadcasts. The news will come out, one way or another. It's the classic vanity of writers to think that they have created the one perfect story that exceeds all others. The clear-minded statistics of Web usage quickly reveal this as a delusion.

Quittner (who, full disclosure, was my boss for six years at Time and Business 2.0 and talked about micopayments incessantly) was right to note the liberating effect of getting rid of the costs of print media. But he was wrong about how we'd pay for it.

Ceefax, BBC's "teletext" service, got its start in the 1970s.

In 1981, KRON, a San Francisco TV station, reported on how the San Francisco Chronicle and Examiner were both putting their papers online. Cost of the online version: $10, versus 20 cents for a print copy. Hey, that sounds good — for the newspapers, anyway!

Newspaper chain Knight-Ridder had a service called Viewtron which helped kids "learn how to think and be logical." Sort of like YouTube today, right? It cost $39.95 a month.

In the 1980s, there was Prodigy, an online service which had sports scores before the newspapers.

And then there was QuantumLink, a service which later became AOL and bought Time Warner in a $160 billion deal, before it became worth almost nothing.

Google CEO Eric Schmidt has previously said he wouldn't help out by buying newspapers or showering them with cash. Google Print wasn't a bailout; it was an attempt to do business together. In a blog post, Google Print Ads director Spencer Spinnell says that his employer will keep working with newspapers — as long as they realize that they'll have to make money on the Internet, not in print (emphasis added):

We remain dedicated to working with publishers to develop new ways for them to earn money, distribute and aggregate content and attract new readers online. We will continue to devote a team of people to look at how we can help newspaper companies.

Cooper, who joined Portfolio in 2006, was one of the the business magazine staffers who was made a contract writer when they cut costs last year. He writes in his welcome post that he'll "continue to write for Conde Nast Portfolio, where I'm a contributing editor, as well as its website, and other publications."

Cooper's reporting for Time got him caught up in the scandal which brought down Scooter Libby, the Dick Cheney aide accused of outing CIA agent Valerie Plame. He was a high-profile hire for Portfolio, establishing the magazine's breadth of ambition; his departure, after the slashing of the magazine's Web staff, now signals a contraction. As Portfolio sinks, weighed down by the expenses of print, TPM rises.

Jarvis, a former ink-stained wretch, calls it a historic moment. Perhaps it is for him, since the Entertainment Weekly founder has made a career out of guiding old media organizations into digital nirvana. To make his living, it helps if he can argue that there's a pot of gold at the end of the online rainbow.

So LA Times editor Russ Stanton's recent disclosure that the newspaper's website revenues covers its editorial overhead — print and online — makes a handy PowerPoint slide for Jarvis.

But Stanton's claim doesn't withstand casual scrutiny for anyone familiar with the economics of online-only publications. The LAT newsroom, even after considerable cuts, still houses 660 people. And yet, in December, according to the newpaper's own figures, its website only generated 120 million pageviews. At that rate, that's 2.2 million pageviews per employee per year. One Gawker Media blogger, in a much-cited example, did double that figure in a month.

And fishiest of all, Jarvis's scenario doesn't include any expense for actually selling those ads. Do Stanton and Jarvis think ads, online or off, get magically sold through the simple grandeur of the wordsmithing to which they're attached?

Perhaps the Tribune Co., the publisher of the Times, is phenomenally good at running its business, but I doubt that, since it recently filed for bankruptcy. More likely: Stanton is engaging in wishful accounting. And since Stanton's tale suits Jarvis's needs, he's reprinting it without applying a media critic's needed skepticism.

The media itself is gayer than ever: From the pink mafia at the New York Times to the ambisexual likes of Neal Boulton, it's hard to think of the LGBT community as underrepresented in the mainstream. At the same time, as gays move out to the suburbs and raise kids, it gets harder for them to relate to the urban obsessions of the gay press.

And yet wannabe pink-collar kingpins like Here Media CEO Paul Colichman keep trying. His company is the product of a fire sale thinly disguised as a merger announced late last week. The company is made up of the post-layoff remnants of PlanetOut, the operator of a gay content portal and an online-personals site, along with Here Networks, a subscription cable channel, and Regent Entertainment Media, an indie film studio focused on the gay market.

Colichman (above), the Obama-hating Regent boss whom Queerty dubbed "the whiny queer version of Rupert Murdoch," is reprising the old dream that led a few queer media and tech veterans to start PlanetOut in the first place: Media for the gays, by the gays.

Under former CEO Lowell Selvin, PlanetOut expanded into everything from book publishing to all-gay cruises. An all-gay transatlantic crossing on the Queen Mary 2 proved such a financial disaster that it helped sink the company. But Selvin & Co. were too busy with playing with cruise ships to notice what was happening to the gay market: Having come out of the closet en masse in the '90s, most gays and lesbians found their interests weren't that different from mainstream America. The notion of a gay Web portal, which might have made sense in the mid-'90s, no longer worked in an age of blogs and search engines. And pay classifieds of any persuasion found it hard to compete with Craigslist ads.

Yet the dream of gay-media world domination continues to draw the likes of Selvin and Colichman. It's the promise of being a big pink fish in a small pond. Gay men seeking attention — who'd imagine? But that same dynamic is what dooms gay media moguls to being small fry.

Aron Pilhofer, Andrew DeVigal, Steve Duenes, Matthew Ericson, and Gabriel Dance (left to right) created the site's Word Train, a tool which polled readers on how they were feeling and displayed their answers, in an homage to Twitter and Facebook's status-update features. (Plus Dance has two earrings, so you know he must get the Web.) That's just one example of the string of multimedia innovations they've been pursuing since Times deputy managing editor Jonathan Landman greenlighted their work in 2007, New York reports in its All New issue.

But the fact that the Times has promoted its multimedia producers to full-time newsmen is a colorful distraction from the newspaper's real problem: It has not found a way to pay for its newsgathering operation online. And as print advertising revenues crater, the infographics department will surely be revealed as just another cost center to be cut. The bright young things are every bit as clueless as their ink-stained counterparts:

Over time, Pilhofer adds, this is the role the Times can play: exciting online readers about the value of reportage, engaging them deeply in the Times’ specific brand of journalism—perhaps even so much that they might want to pay for it. If this comes true, it would mean this terrible year was not for nothing: that someday, this hard era would prove the turning point for the paper, the year when it didn’t go down, when it became something better. Pilhofer shrugs and puts his glass back down on the Algonquin table. “I just hope there’s a business model when we get there.”

Why hasn't the Times hired equally brilliant counterparts on the publishing side? At current rates, the Times needs to increase traffic sevenfold to reach breakeven as an online-only business. It's the Times's business which requires reinvention, not its journalism.

(Photo by Mike McGregor/New York Magazine)

Smart, since the government and Google are the only people who have money anymore. But no such luck, says Google CEO Eric Schmidt. Google will take over a newspaper's Web search and broker ads for it (taking a hefty cut of revenues, of course) — but it's not going to shower the dead-tree industry with cash, he tells Fortune:

How about just buying them?

I don't think our purchasing a newspaper would solve the business problems. It would help solidify the ownership structure, but it doesn't solve the underlying problem in the business. Until we can answer that question we're in this uncomfortable conversation.... The fundamental question you're asking is, Why does Google not write large checks to newspapers? We're careful at Google with our money. We write large checks when we have a great strategy. And we don't yet have that strategy.

So much for the world's most innovative company! Google is getting into the energy business. One of its top executives, Vint Cerf, spends much of his time thinking about porting the Internet to deep space. And yet Schmidt doesn't know how to save the newspapers. "I wish I had a brilliant idea, but I don't," he says. How unlike Google.

Peter Kafka, a former Forbes.com editor, reports that 19 have been laid off from both the print and online sides. Other sources give a breakdown: 17 from print, chiefly those with the longest tenure and hence the highest salaries; and 2 from the Web, both recent hires.

Forbes and Forbes.com have been run separately since the late '90s, when the Forbes family hoped to make some quick cash by spinning out the dotcom in an IPO. The public offering never happened, but Forbes Media's split has persisted, exacerbated by turf wars and infighting. (Forbes.com did not want Dan Lyons, the magazine writer who turned into a superstar blogger as Fake Steve Jobs, to write for the website; he left for Newsweek last year.)

Plans to merge the two feuding operations first leaked in October. In November, the company, which is now part owned by the Forbes family and part owned by Elevation Partners, the private equity firm which counts U2 rock star Bono as a member, conceded in a memo to employees that a merger was afoot, and that decisions on cuts would be made in January.

It is a comedown for the magazine, especially. We have heard, but not yet confirmed, that the list-happy title has lost most of its junior reporters who served as factcheckers. And the print team, we're told, may move from its 60 Fifth Avenue headquarters to Forbes.com's dumpier newsroom at 90 Fifth Avenue, perhaps so Forbes Media can unload the more valuable real estate. (Not that it's a good time to sell Manhattan office space, which is likely why the move is still undecided.)