Can an electronic newspaper be profitable?

Papers like The Seattle Times are in a tough spot: Online advertising revenue is a long way from covering expenses. Meanwhile, print advertising is vanishing. So why not ditch the presses and trucks and go electronic? It just might pencil out.

The tech gadget of the moment, this moment anyway, is Amazon's new wireless electronic book-reader, Kindle. The wireless device can deliver any one of more than 88,000 books, including bestsellers, which Amazon sells for under $10 each. The text appears on Kindle with the same crisp clarity as print on paper, and the battery that runs the device will go a week before it needs a two-hour recharge. Amazon hopes Kindle will tear up the book business just like iPod tore up the music business.
 
But there is another business, newspapers, that ought to be closely following Amazon's bet on Kindle. Newspaper owners these days routinely issue gloom-and-doom financial forecasts, usually accompanied by announcements of layoffs and other cost-cutting measures. Draconian steps are necessary, they declare sadly, because newspaper revenues keep falling.