Back in the early 1990s, when I was a reporter at the Los Angeles Times, Bill Gates came to the paper for an "editorial board" meeting, a weird combination of meet-and-greet and press Q&A in which company brass schmoozed the mogul while lowly reporters and editors were supposed to ask him tough questions.

Even then, newspapers were worried about what new technologies would mean for their business, and Gates was hardly re-assuring. In a comment that has always stuck with me, Gates observed that newspapers delivered a bundle of things – national, international and local news, brand advertising, classified advertising, event listings – that didn't logically belong together as a bundle. Why would people turn to the same source for both Iraq war dispatches and used cars?

The answer, historically, was that newspapers alone had the distribution apparatus – trucks and printing presses – to get both of those things to the masses. But Gates was right: the internet, by changing the distribution equation, would bring about the unbundling of those various services, and that would mean trouble for newspapers.

Today the Los Angeles Times, still one of America's great newspapers, is engaged in an endless soap opera relating to its ownership. Chicago's Tribune Co., having bought the Times from the Chandler family only a few years ago, thinks the paper should be making more money, and wants to cut costs further to make that happen.

Journalists at the paper (not surprisingly) as well as the publisher and many civic leaders in Los Angeles (rather more surprisingly) think further cuts in editorial would severely undermine the paper's ability to deliver the kind of journalism that Southern California wants and needs. This conflict, and the troubles at many other papers around the country, has prompted a nostalgic yearning for the days when local families owned newspapers.

The problem, according to this formula, is corporate ownership, which subjects newspapers to the profit demands of Wall Street. Just look what happened to Knight-Ridder, once a paragon of newspaper chain excellence, now dismembered because some hedge-fund managers wanted it so.

But the trouble, alas, is not corporate ownership. The trouble is the unbundling of the newspaper business model that was so foreseeable even 15 years ago. If you're looking for a job, you might go to the newspaper, or you might go to Monster.com. If you're looking for a house, you might go to the newspaper or you might go to Realtor.com. If you're looking for the latest on Iraq, you might go to the newspaper or you might (even in America) go to bbcnews.com.

And if you're an advertiser looking to sell plane tickets or phone services or shirts and shoes to the citizenry of Southern California, you might go to the newspaper, or you might go to, say, Microsoft's new "Digital Advertising Solution," which will enable advertisers "to more easily reach customers by packaging Microsoft's products, including Xbox, MSN, Windows Live, Office, Windows Mobile, and Microsoft TV." Oh, and don't worry, many of these new advertising services can now be geo-targeted to a specific locality.

Newspapers are still a good business, they're just not nearly as good a business as they used to be, and that's going to be an issue for almost any ownership structure. It's true that a family committed to quality journalism can do an enormous amount to support it: the three best papers in America – The New York Times, The Washington Post, and The Wall Street Journal – have all benefited immensely from enlightened and family ownership.

But the choice on offer is not the Tribune Co. or the Sulzberger's (of The New York Times). The choice in LA, it seems, is the Tribune Co. or music mogul David Geffen, and it seems unlikely in the extreme that a ruthless Hollywood operator like Geffen (or anyone else rich enough to do it, for that matter) would spend two billion dollars to buy the paper and then run it as a public trust. I'd wager that a Geffen-owned Times would quickly have journalists pining for the days when they were at least working for people who knew something about newspapers and didn't have personal agendas.

The issue for newspapers is not the ownership structure, and the more time people spend worrying about that the less time they'll have for the real issue, which is how to remake the business model in the era of unbundling.

Jonathan Weber is the founder and editor in chief of NewWest.Net, a new type of regional news and information service focused on the Rocky Mountain West in the United States. He was previously the co-founder and editor in chief of the Industry Standard

Click here to read more of his articles

Explore Tech & Web

• Personal Tech

• The Web

• Gadgets & Gaming