I'm not sure I buy the claim that American papers are simply behind the curve on the Internet. The NYT has run a great site for years, yet they're still on the brink of bankruptcy. The problem seems to be more fundamental. Even with the large audience major newspaper sites draw, advertising revenue or subscriptions just don't pull in enough money to replace the old combination of geographic monopoly and classified ads.
<i>"Google Devalues Everything It Touches"</i><p>Joel Spolsky described it thus: <i>Smart companies try to commoditize their products' complements.</i><p><a href="http://www.joelonsoftware.com/articles/StrategyLetterV.html" rel="nofollow">http://www.joelonsoftware.com/articles/StrategyLetterV.html</a>
Commodifies, not devalues. Devaluing something makes it less useful for the person buying it eg Mexico devaluing the peso. Commodifying makes it cheaper to produce by making distribution and/or manufacture more efficient, eg Tata figuring out how to make a car for one lahk.<p>The real danger is that Google is becoming the sole market maker for advertising, which means they can extract almost all value from the transactions.
This is like someone in 1780 arguing that industrialization devalues everything it touches. Yes, some senses. But the world is net better off. And more important, there is no going back.
People will pay. They care about hassle more than money. I absolutely detest the process of creating an account at a site to see content, and I use bugmenot all the time for free sites. However, I pay a decent chunk of change for a subscription to ft.com. When I find content I like, I <i>want</i> to subsidize the creation of more by the same creator. Micropayments and subscription models are the way of the future. Newspaper sites should support both models and let readers use either.