Billionaire moguls seem to be coming to the rescue of the newspaper industry. Are they on to something?

Surely there’s some price at which it makes sense to buy newspaper properties. If nothing else you could melt the printing presses and sell the scrap metal. More seriously, some of the properties excel at collecting content and even in this virtual age there are still going to be some people that want to get their fingers dirty with newsprint; the daily paper will remain the way to get advertising to them.

But one wonders whether these moguls fully understand the challenge faced by the newspapers. These multi-sided businesses spend a lot of money generating content to attract eyeballs so they can sell ads to companies that want to market to those readers.

Unfortunately, Internet-based advertising is so much more effective than print or television advertising because it can be targeted to people to whom it might be relevant and advertisers can be charged only when people pay attention to it or, with Google’s new pay-for-action platform, actually buy something based on the ad. The superior efficiency of the Internet sucks vast amounts of value out of newspaper as an advertising medium. So maybe they could sell their content generation asset to the internet properties. Unfortunately, it is beginning to look as if the Internet, with decentralized and fast-action news gathering from volunteers, takes a lot of value out of that asset as well.

I’m not a mogul, and I’m sure these guys are better at picking values than me, but it is hard to believe newspaper market caps have hit their bottoms just yet.