Imagine a major U.S. city without a newspaper. Think it couldn't happen? Consider San Francisco, and think about what it would mean to you.

Two weeks ago, Hearst Corp. threatened to shut down the San Francisco Chronicle if it can't find a buyer or significantly reduce costs at the 144-year-old paper. If Hearst acts on its warning, the city's only paper would be the Examiner, a freebie.

The sorry muddle Hearst finds itself in is just another chapter in a string of crushing setbacks for U.S. newspapers, which like other traditional media outlets fear they may be sliding toward irrelevance, if not extinction, as they compete with YouTube, Facebook Twitter, blogs, iPods, satellite radio and 24-hour news channels for an increasingly fragmented audience.

The information industry newspapers once ruled has been revolutionized by the Internet and other digital media. Add to that a near collapse of advertising revenue caused by the recession, and the prognosis is not good.

"The entire industry is in a state of metamorphosis, and the changes are accelerating at a pace few observers could have anticipated even a year ago," said Tom Corbett, a research analyst with Morningstar Inc. in Chicago.

Although the maelstrom has created opportunities for any manner of Internet competitor to cash in on newspapers' once-dominant audience, scholars and media executives warn there are implications to readers and - dare it be said - to American democracy. Mark Willes, former publisher of the Los Angeles Times, said newspapers serve a crucial purpose so far unmatched by any other medium. A well-written, well-edited newspaper acts as a government watchdog, drawing information together that readers need, even if they don't always want it. Newspapers entertain, allow for clashing ideas and provide a common base of knowledge that, with luck, make for an informed citizenry, he said.

"If we are going to have effective government, if we're going to have all the things I think are central to having a civilized society and a successful society, [newspapers] must grow. They must stay relevant," said Willes, who now leads Deseret Management Corp., the LDS Church-owned company that oversees KSL TV and radio, the Deseret News and other businesses.

But that ideal may be in danger. E.W.Scripps Co. last month shut down the Rocky Mountain News, ceding the market to its rival, The Denver Post. The latter is owned by MediaNews Group, which also publishes The Salt Lake Tribune and more than 50 other papers in 11 states.

The Seattle Post-Intelligencer and the Tucson Citizen in Arizona face similar fates if buyers aren't found. Papers in Minneapolis, Philadelphia and Chicago have slid into bankruptcy. Even The New York Times isn't immune. Shares of its parent company's stock closed as low as $3.77 last month, below the cost of the Sunday paper.

"It's the perfect storm that we've never seen before," said William Dean Singleton, chairman of the board of the Associated Press, publisher of The Tribune and chief executive of Denver-based MediaNews.

Ads in freefall

Many factors, including the global recession, are robbing newspapers of their customary sources of advertising revenue. But layered over that weakness is the Internet, which pundits say is the true source of newspaperdom's troubles, even as papers belatedly pour more resources into online products to fight the migration of readers to the Web and reclaim their role as the dominant information source in their markets.

Taken together, the two factors have undermined traditional newspaper business models, savaged print circulation numbers and led to an upheaval in the way readers get news.

About 50 million Americans turn to the Internet for news on a typical day, according to a study by the Pew Internet Project in 2006. More than 70 percent of heavy Internet users got news online, but only 43 percent got news from their local newspapers and even fewer read national newspapers.

"I live in front of a computer, essentially," said Susan Stewart Rich, 30, who was an avid print newspaper reader five years ago, but has shifted her reading habits to online news sites. Her Web browser automatically defaults to a news site every time she switches on her computer. "It's just so convenient. I don't know how else to say it," she said.

Like other online readers, she sees the Internet as having broken down the monopoly on information that newspapers have traditionally shared with television and radio. Most papers and TV stations publish free news on Web sites and thousands of independent blogs and news sites break, shape and spin information, giving consumers unprecedented access to differing slants on events. Viewership of Qatar-based Al-Jazeera's English Web site rose sixfold during the 22-day Gaza War in January, and most of the hits came from the U.S., according to The Associated Press.

The jump in viewership occurred in part because Israel barred TV networks such as CNN from entering Gaza during the war. But it also reflected wider media trends. The Internet is increasingly where people get news.

Some warn, however, that this freedom comes at a price. Newspapers with their large newsrooms originate much of the content that feed online news sites and blogs and they do so without compensation.

As their operations migrate online, newspapers have yet to find a business model that generates sufficient revenue to maintain their news operations.

Healthy revenue from print advertising in years past paid for large editorial staffs and investigative reporting that unraveled scandals such as Watergate and exposed horrific conditions at Walter Reed Army Medical Center, the country's top military hospital for wounded service members.

That's changing. The implosion of ad revenue has forced papers from the Deseret News in Salt Lake City to The Wall Street Journal in New York City to eliminate thousands of jobs through layoffs and buyouts. At least 15,590 newsroom positions evaporated in 2008, according to Paper Cuts, an online site. Another 2,700 jobs have been lost this year.

Nowhere are budget cuts more obvious than in coverage of the wars in Iraq and Afghanistan, where many papers have cut their presence, relying on wire services instead of their own writers. As a result, reporting has homogenized, and the twin conflicts have largely faded from public awareness.

"For the hard-core newspaper reader, it's obviously a very difficult situation," said Carol Dogherty, associate director of the Pew Research Center for the People and the Press.

Willes, who also served as chief executive of Times Mirror Co., worries about online-only news, saying it often only reinforces what people want to believe, he said.

"The junk that's on the Internet is really scary to me. It's totally unedited. Some of it is factually, absolutely wrong. Some of it is malicious," he said. "And to think that everybody is getting their information on the Internet is one scary thing to me, which is why I think we have to have well-edited, well-written, well-researched newspapers, so that there is a place where people can go and get a good sense of what is going on and trust it."

Newspaper insiders aren't the only people concerned with the growing shift to online for news. Said longtime newspaper reader Mike Dunn, a Sandy airline pilot with a college degree in journalism: "The beauty of the Internet is that it attracts people with a low attention span. [But] people have an obligation to understand the whole story and you can't get that anywhere but in a first-rate newspaper.

"Readers have an obligation to be informed. Give me news that is important. Give me news that helps me make decisions," he said.

Poor foresight

The deep water papers are in can be traced to their own lack of imagination. Even as TV and radio chipped away at their audience, newspapers raked in ever more revenue that bolstered their bottom lines. Profit margins exceeding 20 percent became common, lulling publishers into complacency and leading most newsroom executives to lowball the Internet's threat to their business models. Papers simply plowed ahead, which created opportunities for myriad competitors.

"Newspapers historically have not been on the leading edge of anything. They tend to react to things that happen to them rather than to look ahead and figure out where they are vulnerable and try to figure out something that will prevent it," said John Morton, president of Morton Research Inc., a media research company.

To staunch the loss of readers and advertisers, newspapers have put much of their content on the Web. But the transition hasn't been seamless or quick. Some papers, notably The New York Times, tried to charge fees to access their sites only to pull the plug when the experiment failed. Others dithered while online news aggregators such as Google and CraigsList, the free classified ad site, became part of the landscape.

"Papers are doing a lot of good things on their Web sites now. The only problem is they started 10 years too late," Morton said.

What newspapers should do to recover their prominence and profits is debated fiercely in newsrooms and on Wall Street.

Tribune Publisher Singleton doesn't see convincing signs that all readers are fleeing from print newspapers. Almost 40 percent of adult Americans still read a newspaper every day. Print readership may be down, but online readership for newspapers is up, and the number of people reading The Tribune in one form or another is at an all-time high, he said.

Corbett, the Morningstar analyst, questions whether newspapers can convert their online sites into profits that rival what they once earned from their print products.

"For newspapers, going online is like trading dollars for pennies when it comes to revenue because newspapers simply haven't been able to generate the same revenue stream online that they could with their print product," Corbett said.

As chairman of the AP, Singleton is in a position to observe how hundreds of newspapers are responding to the challenges posed by online forms of information and the advertising recession. He is optimistic about the chances for papers, but isn't oblivious to the risks facing them.

"In the long term, if we fail to monetize the Web, as we must, then the business may have no future. And there are those today who argue today that it has no future," Singleton said.

"I'm not one of those. I believe we do have a future. But I believe it will be a more complicated future," Singleton said.

"I think readers will be reading print newspapers the rest of my life and yours. But I think more of our business will be online than it is today. More of it will be targeted products than it is today. And I plan to stay until the last call," he said.

pbeebe@sltrib.com