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If the world unfolded as predicted by Bill Gates, printed newspapers would be dead in the next four years. While he may turn out to have been directionally correct and merely wrong about the timing, it's been interesting to watch the world change around Microsoft and slowly render the software giant impotent at a time when newspapers continue to hang around and even start new print publications.

While it is surely premature to pronounce dead a company with a 263.2 billion USD market capitalization, the writing is on the wall: the era of the PC has ended. The Web is the center of the universe and the PC is just one of many peripherals.

Now Microsoft is saying that openly. After a series of high-profile failures (PlaysForSure, Zune, and now Vista) from Redmond, it needs to change its way of thinking from top to bottom to embrace Web services. (This is why it wants to buy Yahoo, an effort that I think will fail even if it succeeds.)

The problem is that MS has no particular advantage as a service provider -- other than mountains of available cash to fund development, which often is not the advantage you might expect. On the minus side, it has a demonstrated track record of incompetency and inability to stick with an idea long enough to make it work.

Just this week Microsoft told people who made purchases from its failed MSN Music online store that "as of August 31, 2008, we will no longer be able to support the retrieval of license keys for the songs you purchased from MSN Music or the authorization of additional computers."

Microsoft is surrounded by smart, more agile competitors, many of which have nothing to lose. As we move from desktop to mobile-centric Internet access, free Linux -- especially in the form of the Google-financed Android project -- will be the dominant platform. This will lead to an explosion of small-scale disruptive, innovative development, overwhelming Microsoft like an attack of fire ants.

Is there any value to newspapers in studying this, other than misery loving company?

I think it illuminates two options for newspaper companies, which are in many ways in the same trap as Microsoft.

One path is to embrace and leverage processes modeled on the principles of "open source" development, as Google is doing. This requires abandoning the arrogant hostility toward the reader that you find in many newsrooms, banning the language "unwashed masses" from thought as well as conversation. The Founding Fathers referred to "a decent respect to the opinions of mankind," a concept disturbingly absent among many journalists who are eager to latch onto other concepts expressed in that era, such as freedom of the press.

The other path is suggested by a line generally attributed to F. Scott Fitzgerald: "The cleverly expressed opposite of any generally accepted idea is worth a fortune to somebody." This essentially is Apple's path, the closed system where value is created through enforced simplicity and clarity. But can newspapers cleverly express anything? The quality of writing, and the quality of thought, in most of America's 1,400 or so newspapers is not encouraging.

My rule of thumb is a simple one: Use the right tool for the right job. The Internet's strength is collaborative interaction; print's strengths are linearity, focus and serendipitous discovery.

So in my world newspapers should use the Internet to execute a Google-like, open-source-inspired, conversational approach to journalism, while remaking print around focus, quality, depth and thought-provoking discovery. I'm troubled when I see newspapers trying to badly copy the Web's strengths into print (i.e. those awful Page 2 summaries of news you already know about) and failing to invest in journalism worth reading.

So in my vision of the future, the Web is not exactly the center of the media universe. It's one of the centers, and it's optimized for open interaction and community-driven conversation. Print should focus on our need for periodic escape from the cacophony of the bazaar. If we do that, perhaps newspapers will still be around for awhile. Maybe even longer than Microsoft. Who knows?

I'll leave it to others to comment on the potential impact on the newspaper industry of the proposed Microsoft-Yahoo takeover.

I'm interested in how Microsoft may be faced with a choice: Change who you are in a very fundamental way, or destroy both Yahoo and yourself in the process.

That is the very choice facing newspapers today, and we might learn something by considering how this takeover might play out.

Why does Microsoft want Yahoo, anyway? Here's why: It's four o'clock in the afternoon for the Microsoft software empire. At four o'clock there's plenty of daylight left, but night is on the way.

That's the way it is for Microsoft, which built its lock-in software empire in an economy of scarcity (and some shady business practices). Despite all of Microsoft's efforts, scarcity in the software world is disappearing.

The Internet is responsible for that. It made possible the open collaboration by volunteers and independent companies that created Linux, Apache, an array of free database servers, free programming languages like PHP and Python, and ultimately competitors like Google who are making the old world of desktop software and desktop operating systems largely irrelevant.

The cool stuff is on the Web, not the desktop, and we don't need Microsoft for that. This is the nightmare that Microsoft has been fighting from the start, the reason it opposed the open Internet from the start, the reason it suffocated Netscape at the start.

So it's four o'clock, and Microsoft knows it has just a few more years to move from being desktop-centric to being a Web-centric business that's more like media company.

Its own efforts (MSN) have been a mixture of serial failures and very marginal successes, so something big has to be done now.

But here's the danger: Microsoft's DNA would be poison to Yahoo. Instead, Microsoft needs an injection of Yahoo's DNA. It's unlikely to accept that.

Microsoft's internal value system tells it to tie everything together in order to defend the core. Defending the core, as we in the newspaper business have finally begun to understand, ultimately prevents you from innovating.

Instead of embracing open standards, it peddles second-rate proprietary tools like ActiveX, Silverlight, and the ill-fated "Plays For Sure" audio system, all intended to lock consumers into a Microsoft-only solution. Instead of competing on merit, it tries to prevent licensees from supporting other standards.

What a contrast is Yahoo. Like most successful Web companies, Yahoo built its business on open-source tools like OpenBSD. Rasmus Lerdorf, who invented PHP, works there, and Yahoo is probably the largest single user of PHP in the world. Yahoo contributes heavily to open-source projects, hosts open-source conferences, promotes open standards and gives away its own code. It's not perfect, but it's almost a mirror image of Microsoft.

Yahoo doesn't need an injection of Microsoft, but Microsoft could use an injection of Yahoo. Will it take the medicine? I doubt it. Like a newspaper taking over an entrepreneurial dotcom startup, I fully expect Microsoft to destroy everything that's open and creative about Yahoo, driving away its best talent and its most loyal users.

The universe of "Amigos" officially expanded today with the announcement of an expanded relationship between Yahoo and a set of newspaper companies that has grown to 12 with the addition of McClatchy.

The deal now covers participation by 264 newspapers across 44 states in Yahoo's targeted advertising network and search technology. Newspapers will be able to sell locally targeted advertising delivered on Yahoo's network, and Yahoo will be able to sell national advertising into newspaper websites. There also will be extensive linking to local newspapers' content from Yahoo.com, which could become a major traffic driver for the newspapers.

Meanwhile, the Chicago Tribune has a curiously headlined story: "Papers leery of online deals." The Tribune Company and Gannett are the major players sitting on the sidelines. The Los Angeles Times cites a source who calls McClatchy's switch "a huge swing vote in the industry."

Yahoo News has launched local pages for metropolitan areas across the United States, aggregating local news from RSS feeds and via screen-scraping. Users of Yahoo's personalization tools will get a link that aggregates their hometown news by default, and a cluster of local headlines on the news.yahoo.com page.

The typical local page uses RSS feeds to pull in headlines and summaries from half a dozen sites, each linking back to the site (through a clickthrough counter) for story views. For each participating website, there's also a a site-specific RSS aggregation page on Yahoo.

All of this is separate from the personalized my.yahoo.com page, which is conceptually more of a Web-based RSS reader than a news portal system.

Sites with tight registration requirements or restrictive RSS usage policies are being left off the bus. This means that in some metro areas, the major local newspaper may be missing.

Yahoo has been negotiating registration changes for some major sites in order to include them, asking that Yahoo visitors be allowed to click through without having to register on the destination sites.

Threat or opportunity?

Probably not much of either. MSNBC has been doing local pages for years, working directly with local TV stations and newspapers long before RSS became a factor. It didn't seem to have a tremendous effect one way or the other. Yahoo's effort may be somewhat stronger, as it includes more sources, but I don't see it as radically different.

All of this is part of an inevitable pattern. The Internet makes it possible to disintegrate content and to reintegrate it in new ways. Screen-scrapers, RSS feeds, search engines, feed readers, and socially driven link aggregators (Slashdot, Digg) aren't going away.

My advice to local news sites: Get your own house in order.

Users will choose and use multiple jumping-off points. The choice will be driven by quality of experience.

If your homepage is ugly, cluttered and overloaded with hucksterism, you shouldn't be surprised if many users flee to the sterile organization of Yahoo Local. If your site offers poor opportunities for interaction, then you shouldn't be surprised if many users migrate to Topix or one of the many local discussion sites that are popping up all over the country. If you don't engage with local bloggers and photographers, don't be surprised to find a version of Greensboro101 in your own backyard, or a big locally focused Flickr pool.

Do a great job. Earn your way. Make your users fall in love with your site.