• Forbes, Tuesday, June 9, 2009 9:30 AM

San Diego is California's second-largest city, yet it's a one-newspaper town whose newspaper is faltering. Ad revenue at the San Diego Union-Tribune has dropped 40% since 2006.

Last month, the paper's new owner Platinum Equity announced that nearly 200 Union-Tribune staffers would be laid off. A newspaper that once employed 1,422 people will soon employ just 572. With the Union-Tribune cratering, it opens a hole in the market and the opportunity for some unconventional business models, industry watchers say.

As a result, you get a glimpse of what local news may soon look like in big cities with shrinking newspapers. This is what you see: a Web news venture that gives writers a cut of the ad money created by their own stories and a new entity whose nonprofit founders raise money from readers to buy laptops for their reporters.

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