Editor's Note: TechNerd posted an update to this post here.

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The Seattle Post-Intelligencer’s clock is running down. One possibility floated for its future is to abandon its print edition and become an online-only entity.

How likely is that to happen? The odds seem slim to none, and not just because of the local economy. Dinosaurs don’t turn into hummingbirds overnight, and neither is the P-I likely to make a successful transition despite good metrics.

The P-I has a good audience. The company reports 45 million page views a month from about 4 million visitors. Nielsen puts their visitors lower, at about 2.5 million unique people in December, a busy month, and 1.8 million in November. (The Seattle Times scored 2 million “uniques” and 1.7 million in the same period.) 

But there’s a huge gap in revenue between even such a large online readership and a much smaller print audience. Online ads don’t score as much money per eyeball as print ads because newspapers are still able to charge what one might argue is an inflated rate because of their control over the means of distribution. Everyone can have a virtual printing press online, but an actual printing press, along with distribution, creates an uneven playing field that allows for high prices for business-oriented display advertisements throughout the paper, and the classified section, clumped in the rear—long a cash cow for newspapers before the craigslist era.

I’ve been working with and around Internet advertising since just about the time the first ad was sold back in 1994 on Hotwired.com. From a few million dollars a year in the early days, online ads have grown to about $24 billion from fourth quarter 2007 to 3rd quarter 2008. Borrell Associates, a research firm, puts local advertising a bit below that total. 

This seems like a lot of money, but it’s only a fraction of all U.S. ad dollars. Looking at just newspaper revenue, in the same period of time, (Q4 2007 to Q3 2008), print ads accounted for $37 billion in newspaper income, while online revenue was $3.2 billion. Print ad revenue dropped in third quarter 2008 by nearly 20 percent over the same quarter 2007; online revenue fell just a few percentage points. 

During the time I’ve worked on Internet content, I’ve seen and been part of a number of efforts that tried to use ads to fund online efforts. My own niche content site, Wi-Fi Networking News, once had hundreds of thousands of page views a month, a few years ago when lots of people were trying to figure out how to use and install Wi-Fi networks. An Apple-oriented publication at which I’m an editor gets over 3 million page views a year, and sells all kinds of sponsorships and advertising.

The bottom line is that there’s simply not enough viewers for most niche sites, including ones focused on regional issues, and not enough ways to generate advertising revenue to support more than just a skeleton staff earning far below typical media wages.

My Wi-Fi site, even its best year, couldn’t support a staffer beyond myself; the Mac site I work on is only part of a full-time living for even the folks who run the publication.

The P-I is far and away above those levels of readership, of course. If we look at the P-I’s 45 million page views a month, and break that into the advertising world’s CPM (cost per thousand), that’s 45,000 units that they can sell in some fashion, assuming that they can maintain loyal readers and capture new ones without having a print edition. (Veteran newspaper executive Alan Mutter suggests a lot of page views would be lost after print publication ceased, however.) 

If they could sell several ads per page and sell every single page view they offer, they might be able to generate something on the order of $10 per page per thousand views, or $450,000 per month—$5.4 million per year. (Niche sites can charge more. My Wi-Fi site once had about an $80 CPM when you added up all the ads spots on a page; the more general you get, the far lower the ad rates.)

That’s a reasonable amount of money, but no site sells all its inventory when they have that much to offer; the current ad climate is poor; and $10 per page might be too high an estimate.

Assuming a more reasonable set of assumptions, let’s say that the P-I could pull in the equivalent of $1.5 million per year starting on its first Web-only day from all ad efforts, including sponsorships, advertorial, and other relationships.

That’s enough for a publisher, a handful of back-office folks (programmers, administrative staff), and, with middling salaries and benefits, maybe 10 actual reporters who also act as videographers and podcasters. A lot of functions, including legal, would have to be outsourced. This also sidesteps any union issues the P-I would face in the transition.

For any bigger staff, an investor would need to step in and pour in money, expecting several years of losses, an unlikely option at this point in our economy.

An online-only P-I is somewhat like what Crosscut tried, and has moved away from (the group is talking about becoming a non-profit), but Crosscut didn’t start with the kind of traffic and brand name that the P-I has.

The P-I also may not have acted in time, too, by allowing the departure last year of John Cook and Todd Bishop, two of its most well-known business reporters who poured a lot of time and effort into breaking news online. Cook and Bishop joined the Puget Sound Business Journal staff to launch TechFlash—a focused online effort for regional business reporting. I expect that they took not only their moxie, but a lot of traffic with them as well.

In a few years, the idea of having an advertising supported online local or regional newspaper in which a combination of subscription extras (like Salon.com, limited print editions (like Politico), and occasional print books (like The Seattle Times guide to local schools) will seem perfectly reasonable.

In 2012, with our economy in recovery (one can only hope), and the disappearance in the interim of most second papers in remaining two-newspaper towns, as well as shrinkage in the weekly mainstream and alternative market, advertisers will be anxiously looking for places to spend local dollars.

Local radio and television will likely have also decreased substantially in importance, unless those industries reform themselves, too. Radio stations are being supplanted by Internet radio (streaming music and talk) and podcasts (downloadable, time-shiftable programming).

Broadcast TV has already faced huge declines in viewers, as people move to streaming versions of network broadcasts, services like Hulu.com for archived programs, Netflix’s streaming service for a variety of content, and downloadable services like iTunes.

Even today, Google has had a tough time selling local ads, because Google doesn’t have per se local content. It’s likely that by 2012, the company will have suffered significant reversals because of its inability to diversify revenue much beyond online advertising and providing search results. It may feed 10 times the search results its site does today, but their growth will have tapered off.

All of this means that the store down the street or the national chain with local outlets will be desperately working on strategies that let them focus on customers just down the block or a few miles away.

With radio unlistened to, TV unwatched, and newspapers shells of themselves, where will the money go? To whatever media is left online.

(Disclosures for this week: I write regularly for the Seattle Times, but as a freelancer, so I have no insight into what’s happening inside 1120 John Street. I admire Todd Cook and Todd Bishop, as well as the Seattle P-I online staff, and Crosscut’s efforts. Finally, Publicola is certainly a candidate for taking some of the revenue that print media may leave on the table as that industry implodes, but we’re no P-I, either. Yet.)

TechNerd every Monday.