zjacob - 10:44 pm on Nov 14, 2007 (gmt 0)

purely ad-supported business model can work for newspapers (and other media) that have relatively low overhead costs

That's a good analysis. Adsense supported business models have a lot in common with those brick-and-mortar types.

In fact, when I look at the 5 year financials on listed free city paper companies in Europe, many of them show consistently return on equity well past 20% and very healthy balance sheets.

That's why there is so much upcoming competition to these papers. I think London had two new free city papers last year, for example.