Newspapers are in the wrong businesses. They should no longer be in the manufacturing and distribution businesses — which have become heavy cost yokes — and should no longer try to be in the technology business. They’re bad at it.
Today’s newspapers invest in their web sites out of vanity and from an inability to get their heads out of the geographically defined markets of the past. They have a “local paper” so they assume they need a “local site.” Bull. Developing and maintaining a web site is expensive and reduces the funds available to support the journalism and community building. All but the largest papers should be sharing their websites, computer technology, etc. If you think you need SQL and HTML people on full-time staff, then you’re probably not understanding what it will take it succeed in the future.
Should the newspapers try at this late date to recover the online classified business? No. That would be, I am sure, a hopeless task. The opportunity is lost, the window closed. You can only fight economics temporarily and then only at specific moments in the development of an economy or market. The time for this particular battle is long over. For a newspaper to build an online classified business today would be sort of like someone building a new Internet Service Provider to compete with the phone or cable companies… It’s just not worth the bother unless the technology is distinctly and greatly different.