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British journalist Charles Arthur's post "Newspapers: why fungibility means they’re really really really really really REALLY screwed" shines a light on a basic disconnect between reality and the center of gravity in American journalism.

Well, two disconnects.

One is that mentioning "fungibility" sends about half of American journalists scurrying to look it up in a dictionary or perhaps on Google. Hey, if you're going to be a writer you should know and understand words like fungibility, granularity, and my personal pet peeve, taxonomy.

But the bigger disconnect is a deep-seated belief that news is not a fungible commodity.

And that belief becomes even more deeply rooted as newspapers refocus on local coverage, dropping content that is obviously available everywhere on the Internet.

"Our content," many say, "is unique and not available anywhere else on the Internet."

While that may be true from the content provider's viewpoint, it misses a larger issue: What value do consumers get from your news? Can they get it elsewhere?

Why do people consume news, anyway? There are a lot of reasons, and while "I want to be well-informed on matters of civic importance in my community" may be an important one for some people, it's really not a major driver of news consumption in the big picture.

Consider some others, in no particular order:

• Reading the news is a pleasant and entertaining activity.
• It gives me something to talk about at lunch with my coworkers.
• While reading the paper, I discover what's on sale at my local stores.
• Sometimes I see stuff about people I know.
• I want to feel like I'm part of a community.

When you begin to look at it through the eyes of a consumer, you discover there are ways of obtaining that value other than by reading your local newspaper, print or online.

This is the real challenge facing newspapers: You're not competing on the basis of whether you have unique news. You're competing with the entire world on the basis of the value that consumers get out of your product.

Pleasant and entertaining activities? They abound. Something to talk about? It's everywhere. Discovering what's on sale at local stores? Besides radio and several dozen cable channels, there's also the big box store's website, where their whole weekly sales circular is reproduced online.

People I know? Facebook. Feel like a part of a community? Ditto.

I'm not saying there's no market for what newspapers do. What I'm saying is that the breadth and scale of competition is far greater than most journalists imagine. For most of the points of consumer value that you might name for "news," there are alternative sources. And that gets us back to fungibility.

The problem of fungible commodities is that open markets relentlessly drive prices down toward the cost of production.

You want profit margins? Look for scarcity.

Where can scarcity be found? Here's one hint: Time. Your ability to compete may turn out to depend on your ability to arrange, organize and prioritize on behalf of every individual user. Do you know of any websites that do a good job of that?

The silly season is supposed to be in late summer, and here we are in late winter. Yet we are right in the middle of the silly season, judging from the preposterous nonsense being peddled as "solutions" to the "death of newspapers" crisis. Lately I'm seeing ideas that fall into one or more of several simple categories:

Ideas from aging printies who apparently fell asleep in 1994 and just woke up. This includes most of the paid-content and microcharging nonsense, and just about everything written in the last 12 months by a "columnist."

Ideas from people who can't count, or can't be bothered to count. For example, let's shut down the printing presses of a thousand or so profitable newspapers and walk away from 40 billion dollars or so of annual revenue just because some guy who got rich quick in the first Internet bubble says we should.

Ideas from people who believe in the tooth fairy. If we just put some Adsense under our pillows, Google will come in the night and leave enough dimes and quarters that we can buy rice and beans. Or maybe we can put a gun to the tooth fairy's head and make her pay for linking to our sites. Or maybe the tooth fairy will just buy us.

Ideas from personal agenda-pushers. This is a pretty broad category, ranging from media-haters to fame-seekers to consultants pimping their products and services.

None of this is useful.

Edison said genius is one percent inspiration and 99 percent perspiration. I'm a lot more impressed when somebody actually tries something and discovers what works, and what doesn't.

I'm grateful to Bloomberg News, the Wall Street Journal, the New York Times and several dozen small-town daily newspapers for demonstrating that consumers will pay for scarce, high-value business information but not general news or even great columnists, at least not in sufficient numbers to make it a business worth pursuing. I'm delighted that Bob Cauthorn discovered how employers will pay for "Top Jobs" ads. I'm glad Belo showed us both the promise and the difficulties of scale inherent in behaviorally and demographically targeted local online advertising. There are hundreds of other examples rooted in perspiration, leading to both success and failures, but always learnings.

An ounce of empiricism beats a pound of bloviation. It would be nice if the new crop of commentators took a moment to review what's actually been going on for the last 15 years, and informed themselves of what's actually happening right now. But I suppose that's my own case of wishful thinking.

Clayton Christensen and the disruptive-innovation crew from Harvard -- who developed the NewspaperNext program with the American Press Institute -- struggle to get us to understand how and why simple, low-end, inadequate, "junk" products and services so often topple the big guys.

Take Twitter, for example. One look at the public timeline will tell you it's a vast ocean of utter crap. It's pathetically simple, often unreliable, and even some of its heaviest users are constantly whining about how something else would be better.

But it's open, with a publicly available programming interface. Suddenly you have a whole constellation of Twitter applications, Firefox extensions, image-handling, URL-shortening, conversation-tracking and buddy-recommending services created by third parties.

And now you have the Poynter Institute running a Twitter journalism webinar. Hundreds of newspapers and thousands of journalists are figuring out ways to fit Twitter in with what they do. The most compelling news photo I've seen this year came when Janis Krums was riding a ferry across the Hudson River. His cellphone photo of the downed US Airways plane was instantly "retweeted" and forwarded and relayed all over the planet.

Is it journalism? Why should we care? It is what it is.

One of the low-end, disruptive examples Christensen points to is Linux, which I first used in 1993 or so.

I bought a used '386 PC from a junk dealer and set it up at home. It had no windowing system, just a command line. It had very little networking capability, just dialup. It was unstable. I downloaded patches from Finland every week and recompiled the alpha-state kernel.

It was really just a toy for the college students, amateurs and hobbyists who were the primary developers of Linux back then. I had fun with it.

By 1995, I was in the middle of the Star Tribune Online project in Minneapolis, and our dozen staffers had a problem. Some of them were using Macs. Others were using Windows95 (we started with a pre-release version). We couldn't share files. Left brain couldn't even talk to right brain.

So I installed an early version of Red Hat Linux on a spare PC. Installing it was a struggle. It didn't solve the problem immediately, but it came with Samba, which could talk to the PCs, and I found the source code to Netatalk, which implemented Appletalk protocol for Unix.

After a bit of fiddling with the C source code I got Netatalk to compile. Suddenly this toy operating system was doing a crucial business job. And it was a job that both Microsoft and Apple had intentionally left untouched because it served their purposes to create separate universes with maximum customer lock-in.

Over a decade passes. Microsoft and Apple both make major improvements to their product line. But Linux creeps up on the server side, and eventually becomes the Gold Standard for Web operations. It runs on supercomputers. It runs on cellphones. Your Tivo and your wifi router and your print server probably run embedded Linux, and it comes on those $270 netbooks down at the Target store.

Suddenly Microsoft looks like an inept Soviet-style bureaucracy, and people begin wondering whether its day has passed.

Can we see this pattern in newspapers? Of course we can, and you don't even have to look at the Internet to find it. Daily print newspapers for years have intentionally ignored vast areas of their own business:

• Reporters won't cover "chicken dinner" news. It doesn't meet the "threshhold."
• A hunter brings in a picture of the deer he shot over the weekend. Newspaper won't run it; the quality is too low, and besides, dead Bambi offends somebody on the copy desk.
• Ad sales force won't call on the bars downtown. They're too little to worry about, and besides, half of them don't pay their bills.
• Garage sale junk ads are a nuisance. It costs more to take the ad on the phone than you get paid. Raise the classified rates until the problem goes away.

So somebody else steps in to meet the need: a shopper, an alternative weekly (we used to call them underground newspapers back in the hippie era). And they're a joke, until they start getting the real estate agencies and car dealers.

The people Mark Potts labels printies, short for Printosaurus Rex, dismissed the Internet for over a decade as a fad, a toy, the realm of pajama bloggers, blah, blah, blah. But now the Internet has become deeply embedded in American life, with news audiences integrating news from traditional sources with a vast set of Internet resources, many of which may still look like toys to the printies.

Most of the disruptive-innovation tales in Christensen's collection do not end in the outright demise of the big, aging incumbent. They lead instead to a marginalization, and in the case of the big steel mills that Christensen points to as examples, widespread bankruptcies and many mill closings. Yet we still have big steel mills, and some of them apparently are doing fairly well.

So here's what you should expect in the next five years:

• More layoffs from Microsoft as its once-absolute hold on computing becomes weak. But don't dance on its grave; Microsoft is not going away.
• More migration of time and attention to the Internet, much of it centered on strange new activities like Twitter that seem at first to be -- well, complete wastes of time. But TV, movies, radio and print will continue to play major roles.
• More newspaper layoffs and bankruptcies and print shutdowns. But printed newspapers will persist and even thrive in many situations, and in some cases new printed newspapers will arise in the ashes of failed daily giants. They will be different from the ones they replace
• Linux everywhere. I had to say it.

I really hate being in a position of defending the newspaper industry. It's much more fun, and in the big picture perhaps more productive, to kick it in the pants. But I have to call bullshit on the "Newspapers Are Dead" meme.

No, they're not. Neither is print. Schadenfreude and gravedancing do not advance a rational conversation about how journalism will work going forward, and irrational negativity will not help us invent the future.

Let's get some perspective. In spite of the worst economy since Roosevelt, many U.S. newspapers are still turning profits in the 15-20 percent range, and the U.S. newspaper industry is still turning around 50 billion dollars of gross revenue every year.

Several major newspaper companies are in big financial trouble because they borrowed heavily to finance acquisitions on an assumption that even greater profit margins (over 40 percent in many cases) were going to continue. But do not confuse a poor corporate finance decision with fundamental sustainability of the business.

I've been working exclusively on the online side of the news business since 1994, after many years in print, and I'm as much an online advocate as anybody. I've seen cycles of boom and bust and I know how to recognize crazy talk, and there's a lot of it going around right now.

I can't remember where, but I was reading a blog post the other day written by someone who had visited a local newspaper and was stunned -- stunned -- to discover that there's a lot of money in the local journalism business.

Yes, there is. A lot.

And if you want to understand why newspaper managers aren't impressed by ill-informed arguments that we ought to just quit printing and/or outsource all our ad sales to Google, that's why.

Big money.

Look, there's no question that a fundamental restructuring is taking place in a number of dimensions.

Part of that involves a consumer preference shift from print to digital. Part of that involves an explosion of sources and choices that knocks the local newspaper out of the nonlocal information business. Part of it involves product disintegration -- especially classifieds from news, but also news itself being ripped apart.

Those changes will present huge challenges and demand painful choices going forward, and both the print and digital product lines of local newspapers will have to adapt, along with all of the people who produce those products.

But that doesn't roll up to a "newspapers are dead" conclusion. There is tremendous demand for local media, both from the people we usually and falsely call "consumers," and the businesses that we often call "advertisers." The solutions that work to meet that demand will change. Some companies will fail to change and will die, and others will step in. We can be sure that the future won't be like the past, but that doesn't mean there is no future.

A lot of media punditry comes from people who have absolutely no idea what they're talking about. An exception is Alan Mutter, and I recommend these recent posts to inject some fact into the friction:

Why newspapers can't stop the presses
Print drives online ad sales at newspapers

When you read them, keep in mind that there is a lot of variation in actual performance among the more than 1,400 daily papers in the United States.

I've written previously about MOM -- a whiteboard project dreamed up last century at a New Directions for News workshop. MOM stands for "My Own Matrix," a universal personal infobroker that would monitor all the news, tell you what you need to know, keep track of your schedule, recommend activities and even suggest friends. Mom wouldn't be a device, but rather an entity on a network that would interact with you through any number of devices.

When we got done writing down the attributes of MOM, we realized two things: One, we had rendered all existing media products obsolete, and two, no existing media company would ever build it.

Today comes the news that Google has released user-geotracking software that runs on mobile phones and continuously updates the big Google brain with information on your current location. This ability to know where you are was one of MOM's requirements. Now she can recommend based on location, or tell us where not to go.

This isn't entirely new, of course; many phones have had GPS capability for awhile, and other services such as Loopt have been able to track and share location. A lot of the features MOM would have already exist somewhere on the Internet.

But Google is slowly aggregating all the functionality of MOM, lacking a June Cleaver interface of course. If Google ever figures out how to get everything working together, we'll have a real breakthrough, an entity that knows who we are, where we are, who our friends are, what we plan to do, and can make recommendations about where we ought to go, who we should meet and what we ought not to do.

Exciting and potentially scary.

"Singularity" is a term from mathematics often used by science-fiction writers to describe a point at which some system, perhaps a computer network, reaches a turning point in functionality that changes everything.

Often this shows up as a hard-edged moment, like Skynet becoming self-aware in the Terminator movies, or Colossus in the Forbin Project. There were jokes last weekend, when Google suddenly began marking everything on the Internet -- even itself -- as malware, that Google had suddenly become self-aware.

But that's now how it will happen. The future, as William Gibson says, is already here; it's just unevenly distributed.

Google and Facebook and Twitter and recommendation engines and mobile devices and GPS chips and ubiquitous networking are rewriting the way we discover, the way we interact, the way we communicate and the way we think.

It's a soft-edged process taking place at a human generational pace. In some ways this makes it harder to see, harder to understand, and much more of a challenge for those of us who play key roles in the old processes -- especially journalists.

Here's an image I've been using a lot lately, both for internal training and external presentations such as last week's BPB Forum Lokaljournalismus in Schwerin, Germany.

Journalists tend to gravitate to only one of these roles: the town crier, the quaint colonial-era village character who walks around ringing a bell telling you what's happening. It comes naturally. This is why 24x7 coverage teams and the "continuous news desk" concept take root so quickly when newsrooms suddenly awaken to the urgency of taking the Internet seriously.

But the other roles aren't secondary. They're coequal, and they're grossly neglected by most local news websites.

Moreover, they consistently surface in qualitative research as poorly met needs. The language people use is a little different, but recognizable: "Help me connect with people." "Help me get answers I need." "Help me find people like me." "Help me pursue my interests."

The guys from Harvard will tell you that a poorly met need is a business opportunity -- but you shouldn't need an MBA from HBS to tell you that.

It's easy to point the finger at the "business side" and say they're responsible for the revenue, and they're just not selling enough advertising to support our really great content.

The inconvenient truth is that the content isn't all that great, as judged by the marketplace.

Actual usage data from U.S. newspaper websites consistently demonstrates great reach (monthly cumulative unique-user count) and terrible frequency. There is an audience segment that uses local online news very heavily -- 30, 40, 100 times a month or more. But it's small, too small to sustain the World Of Journalism As We Know It.

News is not enough. Doing the same thing better and faster is not enough. It's time to look left and right at what's not being done.

What does a town square look like? Forums, blogs and photo sharing are obvious tools, and many newspapers have finally -- after years of active resistance -- grown comfortable with the idea of hosting them, if not adept at cultivating them.

But who in mainstream media has done as good a job of aggregating local voices as Chicago's Windy Citizen or Boston's Universal Hub?

And why not? It's not a matter of technology (both those sites use free, open-source tools) but rather of recognizing the value created by sending people away. What's the Number One website, the most powerful brand on the Internet? Google. What does it do? It sends people away. What do they do? They come back for more.

The third role, the "town expert" role, is where we all fail.

We even fail at being the town expert in the territory where we might claim to excel, the town crier function. (Note that I have drawn overlapping circles.) Show me one single local newspaper site, just one, that has done a great job of building topics pages. Yahoo has topics pages. Cnet has topics pages. Newspaper sites? They have stories. Incremental stories that beg to be placed in context.

But topics pages aren't the only model. What about Wikipedia? AmplifySD tried the wiki model for music, and of course the San Diego Union Tribune rewarded the experimenters by abolishing the online department and throwing its leaders overboard.

The brighter spots are outside the mainstream news industry, projects like EveryBlock and Repsheet.

Don't forget that the town expert overlaps with the town square. The informal community conversation has long been a primary source of answers. Who can I trust to work on my car? What about that new hair salon? Where can I leave my pet while I'm gone for the weekend?

Back in the days of dialup online services like CompuServe and The Source, where time really was money ($6 to $12 an hour), those services built a business around forums that provided answers to questions. They were called SIGS -- special interest groups -- and while there certainly was some idle chatter, when the meter was running the bulk of the conversation was direct and practical.

Too few people now working in online media enjoyed that experience. If they had, they might understand forums and comments as being sources of something other than pageviews and headaches.

Technology is not the problem. It rarely is. The deficit isn't in a lack of tools, or a lack of vendors. It's in a lack of vision coupled with execution. If you see your role only as it relates to the town crier function, then you're going to pour all your energies into storytelling techniques, flash, video and mojo dojo.

Those are not bad things. But they will not fix the frequency problem, and they will leave the community with poorly met needs. Don't complain if someone else steps in with a solution.

It's a sad and painful thing, watching the slow-motion train wreck in Minneapolis. And for the passengers on that train, it must be bewildering and humiliating to be the utterly dominant newspaper in a market long considered solid gold, yet declare bankruptcy.

It seems like just yesterday when we were burying money in the basement. Not literally, of course, but there was a year at the peak of the Star Tribune's performance when the order went out: Stock up on supplies. We're making too much money. (Note: I was the founding editor in 1994 of Star Tribune Online, which was rebranded StarTribune.com. I left in 1999.)

It's not sustainable, we were told, and if we're going to deliver consistent growth numbers and keep our investors happy, we have to smooth it out. Suddenly we all got new Compaq desktop computers and threw out the old P-60 IBMs. New monitors. Anything that could be expensed was expensed. Anything that could be rapidly depreciated was welcomed.

Then the paper went on the block, and McClatchy snatched it away from the Tribune Company, which thought it had a winning bid, and the Washington Post, long an investor. At over a billion dollars, it was the richest newspaper deal in history, when market size was factored in. McClatchy used the paper to slingshot itself into the big leagues.

Who ever imagined the Star Tribune would be resold at half price, then declared bankrupt?

This is another example of what I've called the ownership crisis.

The Star Tribune is, strangely enough, still profitable as an ongoing business. Its print product is still profitable and is huge, with 522,000 Sunday circulation and 322,000 daily -- far ahead of the rival Pioneer Press at 246,000 Sunday and 184,000 daily. Its website utterly dominates a highly competitive, wired, highly educated marketplace and enjoys one of the highest market shares of any newspaper site in the world.

Profitable.

But in the face of a brutal recession that has dried up advertising revenues, it can't meet the payments on the loans its owners took out in order to grab control. It's not profitable enough.

Humiliating and offensive as it may seem to the newspaper staff -- who are among the victims in this soap opera -- the bankruptcy is probably a good thing. Some second-tier lenders who made poor risk evaluations are going to lose everything, but unless the recession turns even more ugly, it's likely that the paper will ride this one out. But will it be recognizable? Will the senior managers continue to gut the product and fire key staffers until it becomes a joke?

I can't imagine the Pioneer Press emerging a winner. Nobody in the bulk of the metro area reads the Pioneer Press. Its distribution on the west side is nonexistent, and it's effectively surrounded in the eastern suburbs by the Star Tribune.

But then, who in 1999 could imagine that the Strib would be bankrupt in 2009?