Neither newspaper is doing particularly well, in the larger scheme of things: the Globe was just sold to a local hedge-fund billionaire for $70 million — which means it has lost a staggering 90 percent of its former value in the last two decades. The Washington Post, meanwhile, was just acquired by Amazon CEO Jeff Bezos, after the paper’s former owners admitted that they couldn’t see a future in which they didn’t have to cut more staff and continue to lose money. Not a great environment for innovation, you might think — but you’d be wrong.

A Twitter-based local news aggregator

As Justin Ellis at the Nieman Journalism Lab notes in a recent post, the Boston Globe‘s in-house research lab has built what amounts to a Twitter-powered news aggregator called 61Fresh — a tool that pulls in tweets based on a number of factors, but most importantly whether the content comes from a number of sites and services of interest to Boston residents. The algorithm-driven experiment is designed to produce a kind of Techmeme-style news aggregator, but one based on geographic parameters rather than topic-specific ones.

Every 10 minutes, the algorithm goes searching for the most viral news items. And because it uses Twitter as its source material, it isn’t just a soul-less feed of the latest headlines, but a snapshot of what people in the community (or at least connected to that community, since some may be ex-residents) see as interesting content worth sharing — whether it’s about Tom Brady or a local fire.

Is this going to somehow save the Globe by generating millions of dollars in revenue? Of course not. But it might help the company figure out how content works now, and how social sharing helps drive engagement, and that certainly couldn’t hurt as it tries to carve out a new path — not to mention that those working on it could develop new skills that might come in handy.

A visual interface for mobile news

Along the same lines, the Washington Post is experimenting with a visually-driven news interface called Topicly, which it launched this week: in a nutshell, it takes the top stories from the newspaper and sorts them based on the number of updates — and then displays them as a series of images tiled across a page, so that when readers click on a topic like “Chemical Weapons,” they get all of the stories the newspaper has written that related to that topic.

Cory Haik, senior director of digital news for the paper, told Ad Week she thought of the interface as a good way to present news for mobile users who don’t want to scroll through a lot of headlines, since it’s easy to see what the top stories are and what they are about (Circa, the San Francisco-based news startup, is also trying to rethink news for mobile). The new Post feature also has its own advertising format, which should make it easy to insert native ads into the stream as well.

Again, this probably isn’t going to make the difference between profitability and unprofitability for the Post, but it is a welcome sign of experimentation and a desire to learn how to present content differently for a mobile, digital audience. And to be fair to the Post, the paper has a long history of that sort of thing — from a Facebook news reader (which didn’t wind up working out) to its algorithmic news-recommendation app Trove and a socially-driven advertising unit.

Since no one really knows what the future of digital media looks like, it’s worth experimenting with as many new things as possible — in part because the next new thing always starts out looking like a toy. So kudos to the Post and the Globe for doing so, despite the gloom all around them.

Post and thumbnail images courtesy of Flickr user George Kelly

At first blush, the number is small but the Globe‘s publisher and a respected newspaper analyst see cause for optimism. Here’s a closer look at what the number represents for the Globe and the rest of the country’s newspapers.

[Update: Late Wednesday afternoon, the New York Times Company announced it is putting the Globe up for sale]

A new revenue stream

In October of 2011, the Boston Globe removed its more highbrow content from its general information portal, Boston.com. The paper began charging $3.99 for this content (feature stories, columnists and so on) while continuing to offer bread-and-butter city fare (Red Sox, car crashes, weather, etc) for free on Boston.com.

The strategy reflected a view that most people don’t want to pay for basic online news but that some might pay for a more high-fiber news product. As of last December, a total of 28,000 people have signed up — including some at a 99 cent promo rate — and this number is not growing fast. To put this in perspective, the New York Times has around 640,000 digital-only subscribers; yes, New York is a bigger city but it’s not 22 times bigger.

In a phone interview, Boston Globe publisher Christopher Mayer disagreed that 28,000 was a “small” figure and noted that the $3.99 subscription was just one of several digital products the Globe will be selling. Others will include a new tablet offering with a different pricing point.

“We’re not looking at having one digital product provide an alternative to one print product,” he said, adding that the strategy was based on tapping into the “brand promise” of the Boston Globe.

Ken Doctor, an analyst of newspaper economics, said by phone that the Globe’s 28,000 figure is actually good compared to other papers. He adds that it provides a new revenue stream while also permitting the Globe to justify significant increases in its home-delivery prices. Half of these home subscribers, who get free access to the website, have signed on, which suggests they may be primed to pay for digital-only in the future.

Doctor also said the company’s “tremendous penetration” with Boston.com is an under-used asset that can be a discovery vehicle for the Globe. And this may be where the paper is headed. As Poynter reports this week, the company intends to do more to “untangle” the Globe and Boston.com

A borrowed time strategy

In the larger picture, the Boston Globe is doing a passable job of playing a weak hand. Unlike the New York Times or the Wall Street Journal, the Globe can’t hope to pull in new digital subscribers from across the country or the world; its potential growth is limited to New England.

The Globe’s strategy to use its digital products as leverage to squeeze more revenue out of its home delivery service thus makes sense in the short term. But the paper simply won’t be able to maintain its 360 person newsroom much longer unless there is a sudden uptick in people under 30 buying home delivery subscriptions.

The Globe — and other papers like it across the country — must hit on a digital growth strategy soon if they are going to survive. One option may be partnering with premium international brands like the New York Times. For now, a young person in Boston who can only afford one digital subscription is likely, I suspect, to find more value in the Times over the Globe — but a bundled option that included Globe content could prove attractive. Mayer said the company has yet to explore such bundles.

Meanwhile, the Globe is also experimenting with partnerships with MIT media researchers and iPads in classrooms.

The Globe announced this week that is using $65,000 of reader vacation funds to buy 75 iPads for Boston Public Schools and Stoneham High School. The idea, according to Globe executive Saurer, is that “digital kids turn into digital adults” and that the iPad program will expose them to the paper’s content and knowledge from around the web.

“In the past, teachers would ask elementary school kids to cut out pictures from the paper — it was very tactile,” said Saurer by phone. He added that the advent of digital reading and the impractical economics of supplying paper and ink led the Globe to try the iPad program.

Saurer said the Globe will tweak the program going forward by, for instance, looking at whether the projectors are a good use of money or if more iPads are a better option.

Newspapers around the country run similar education programs funded by vacation subscriptions but Saurer believes the Globe and its sister paper, the Worcester Telegram & Gazette, are the first to provide school kids with devices. He said about a quarter of readers choose to donate their subscriptions.

The article, A New York Times Whodunnit, is plump with gossip but also drives home the crucial business challenges the Times must address sooner than later, exploring the infamous exit of former CEO Janet Robinson, who pocketed $24 million after her sudden departure last December.

• The piece reveals how the rapid shrinking of the New York Times Company has led to a financial and management crisis for the family who runs it.
• The Ochs-Sulzberger clan, we learn, is under strain from dwindling dividends and a dearth of prestige positions for family members to assume.
• It was this backdrop that helped fuel the clashes between Robinson and the girlfriend of publisher Arthur ­Sulzberger Jr. which was the ostensible reason for Robinson’s sudden firing.
• Overall, though, the article makes clear that the “other woman” narrative is just a symptom and not the cause of the Times’ troubles.

Here are three key takeaways for the New York Times Company, whose share price has been lagging the market by nearly 25 percent:

1. NYT Co desperately needs a CEO 

On an April earnings call, one analyst pressed Sulzberger directly about the the company’s CEO search and asked if he would take on the role himself. Sulzberger demurred but everyone else appears to be fed up with the company’s rudderless leadership. In April, a leaked email from a Times reporter blasted the “ghost ship” and took Sulzberger to task for palling around with a series of mountain-climbing gurus rather than running the company.

The New York magazine article reveals that the strategic crisis may be more acute than imagined due to internal divisions over the Times’ critically-important digital initiatives. The article reveals that the Times’ controversial pay wall gambit was actually Robinson’s baby and that Sulzberger instead favored the open strategy of the paper’s longtime digital veteran, Martin Nisenholtz. Now both Robinson and Nisenholtz are gone, meaning Sulzberger will have to find a new evangelist for the pay wall religion he apparently doesn’t share or else carry out a strategic pivot.

2. The Boston Globe and About.com are distractions

The New York Times Company has been shedding assets, including regional newspapers and a stake in the Boston Red Sox, to buttress its cash reserves. The moves make sense but also raise questions about how much longer the company will keep its other properties. While the Times has been talking up the digital makeover of BostonGlobe.com, the site only has 18,000 paid subscribers, which seems frightfully low, even considering the site’s recent launch date.

The New York magazine article also makes it clear that the Boston property has been a pawn at the mercy of the company’s rival fiefdoms. Likewise, revenues at the Times’ one-time cash cow, About.com, have declined significantly (though it is still profitable) and the how-to site appears to be more of a distraction than a key element of any New York Times turnaround plan.

This is not to disparage either the Boston Globe or About.com but simply to point out that they are languishing under Sulzberger. He or a new CEO must take steps soon to shape them up or sell them.

3. Mayor Mike Bloomberg could save the Times

The New York magazine article concluded with the tantalizing suggestion that Mayor Michael Bloomberg is a likely candidate to swoop in and rescue the Times. Other media outlets have already egged him on with pieces like The Atlantic Wire’s “Everyone Wants Mayor Bloomberg to Buy the New York Times.”

The speculation makes a ton of sense  - and not only because Bloomberg will be unemployed next year and in possession of a personal fortune worth at least $22 billion. The purchase would also make strategic and business sense.

Recall that Bloomberg’s eponymous financial company also has extensive media experience. While an actual merger would be a non-starter, the New York Times could contribute valuable data to the existing Bloomberg platform while retaining its editorial autonomy.

Michael Bloomberg would also be a better fit to lead the Times than other rumored candidates (like Mexican billionaire Carlos Slim) and, in any case, would also certainly be an improvement over the status quo.

NYTCo acquired the 17.75 percent stake in what was then New England Sports Ventures, LLC in 2002, spending $75 million for 750 units in the hopes of boosting the Boston Globe. They started to look for buyers during the company’s cash crunch in 2008, looking for roughly $200 million in a tough market, but held out despite pressure to dump them for a smaller return. The company’s been selling them in batches over the past year for $300,000 a unit — a total of $225 million, or three times the original investment. That doesn’t recognize any payments they received or additional investments in the interim.

The company sold 55 percent of the stake for $117 million last July, following a smaller sale.

The investment was controversial from the start, putting reporters at the Boston Globe especially in the difficult position of covering a team owned in part by their parent company. In the interim, the sports group acquired the Liverpool club and 50 percent of NASCAR’s Roush Fenway Racing.

Photo courtesy of Shutterstock.com user [Christopher Penler].

“The impetus for the free trial is getting the word out on new features, including the Boston Globe e-paper,” said Peter Doucette,
Executive Director, Circulation Sales & Marketing.

The e-paper is what is known as a “replica” and mimics the traditional look and feel of a newspaper on a screen or tablet.

BostonGlobe.com launched last October but so far sign-ups have been sluggish. The site has only attracted 18,000 paid subscribers so far.

Part of the challenge may be cannibalization from the paper’s affiliated site Boston.com which pre-dates the new site but also draws on content from the Boston Globe.

The freebie offer lasts for 12 days and is sponsored by Coldwell Banker Residential Brokerage. Other papers, including the New York Times and the Wall Street Journal, have done similar promotions in which a select sponsor takes down a paywall, or part of it, for a short time.

The Globe is also offering a 99-cent week introductory offer the first eight weeks. The site is free for print subscribers.

Unlike sites that have been open access until a “paywall” goes up, technically BostonGlobe.com launches as a subscription-only site. But the same content has been free until now through regional news and info site Boston.com, which will no longer will house the complete paper. Overall, Editor Martin Baron estimates that about three-fourths of the newspaper’s content will now only be available on BostonGlobe.com.

The goal is to keep Boston.com high traffic by keeping it open, while developing BostonGlobe.com for subscribers. Boston.com still will have fresh newsroom-produced daily content, including 20 new blogs and breaking news, and will feature some articles from the newspaper. (Here’s the FAQ on Boston.com.)

Baron describes it as “two different sites for two different kinds of reader — some understand journalism needs to be funded and paid for. Other people just won’t pay. We have a site fior them.”

The “content rules” that govern what should show up where may be a little complicated but planners have tried for simplicity in other ways. No meters for BostonGlobe.com like its corporate sib Nytimes.com — although it will respect first clicks from social media links, no complicated digital payment plans — and a number of other aspects that make it stand out:

– No BostonGlobe.com apps. Instead, the site is based on HTML5 “responsive design”, an app-like offering that reflexively re-sizes depending on the device and screen. Everything from the front page to the photo galleries to the HTML5 crossword puzzle (built on technology developed first by the New York Times) is designed to work via browser. That includes a “MySaved” feature that allows users to save stories via the browser on one PC or device and not only open them in another, but quickly save them for offline reading on a new device. It even works in the experimental browser on a Kindle so imagine the potential for the pending Amazon (NSDQ: AMZN) tablet. (Note: Ethan Marcotte, known for pioneering this kind of design, worked with the Globe.)

During a demo, Jeff Moriarty, VP of digital products, talked up the potential: “The intention is for it to get smarter and smarter. I’d like it to be individually personalized eventually.” But he also was careful to note that they’re trying to avoid doing too much. Readers asked for a site that looked like the familiar Boston Globe — hence the same fonts — and a lot less like other sites, including Boston.com. The responsive design allows them to focus on overall design rather than making versions for different devices.”We have all of these different versions from one code base so we don’t have to update multiple versions.” Unlike other sites that have to redesign or retool using existing cloth, Moriarty knows he was lucky. “We had the benefit of building a new site from scratch in 2011.” They don’t get to avoid that altogether — they’re planning a refresh of Boston.com early next year.

– One price fits all: Unlike NYTimes.com, which offers a smartphone plan, an iPad plan and all-access, BostonGlobe.com only has one subscription price — $3.99 a week, about $208 a year. Print subscriptions, which include access with any variation, can run as low as $1.75 a week, making print plus digital the better deal. Publisher Christopher Mayer explained in a pre-launch interview: “Because BostonGlobe.com was built using those techniques, we don’t have separate solutions with different devices.” He added, “Your relationship will be that web site on any of the devices you have.”

– New ‘loyalty’ program: No wine club or access to editorial meetings but subscribers do get membership in a new loyalty program that includes special events and a “level of access” to our staff. “They might be able to have dinner with me or accompany a sports columnist to an event.” Mayer added, “The more we engage the readership of the Globe both in print and digital is good for us.”

– Most sports coverage stays free. Unlike some sites that see sports as one of the reasons people will pay, Globe Publisher Christopher Mayer and Editor Martin Baron know their audience well enough to realize that won’t play in sports-mad Boston. “Sports is a highly competitive envioronment up here,” Mayer said when I interviewed the two a few days before the launch. Cut off access and users are likely to head for one of its competitions like Comcast Sportsnet , BostonHerald.com or others in the crowded space.

Still, not all sports coverage is included — enterprise pieces done outside regular beat/season/post-season coverage will be subscription-only.

– Seven-day delays: Some content will take a week to show up on Boston.com, including restaurant reviews; health stories from the Monday health section; recipes from the food section, but not the stories; and travel stories. Boston.com will carry summaries of every story that it doesn’t feature.

– Different approach to ads: One research finding led to a different approach for advertising. Mayer said the majority of people see print ads as part of the overall reading experience. They wanted to provide that same kind of integration at BostonGlobe.com but with the awareness that digital ads are a lot less passive. With that in mind, he said, “we’ve adopted an ‘elegant integration’ of ads into the site designed to be part of that reading experience, to inform the reader, communicate a message.” As a result, ads are meant to be more limited and less imposing than on Boston.com.

The official statement sounds like a no: “We do not comment on rumors of acquisitions or divestitures. The Boston Globe is an important part of The New York Times Company. The Globe has made excellent progress and is on solid financial footing. Its continued digital and print progress signals a strong future.”

But it’s a public company and credible offers have to be considered. It would be a lot easier if the group wanted to buy the Boston asset that is for sale and has been for a year — the company’s holding in Boston Red Sox owner New England Sports Ventures (now also the owner of Liverpool LFC).

Entrepreneur Aaron Kushner told the Globe that he and a dozen or so other investors have formed a group called The 2100 Trust that plans to make a bid that would be attractive. NYTCo acquired the Globe in 1993 for $1.1 billion. The decision not to sell followed a dramatic showdown with unions resulting in $20 million in cost cuts.

The group’s statement, published in full with the news story at Boston.com late this afternoon, says in part:

“The Boston Globe has been a pillar in the city, the Commonwealth and the region for more than a century. We believe that The Boston Globe’s strongest days can be ahead. It is essential that the Globe be positioned for its next 100 years. This will require the significant long-term investment that we intend to make. One of the principal areas of investment will be the newsroom, which is due for a significant increase.”

They promise to send a letter of intent.

The Globe, which is owned by the New York Times Co. (NYSE: NYT), had repeatedly said it had no “immediate plans” to charge online users, but there were signs that the move was coming. In addition to the New York Times, which announced its plans to put up a paywall in January, sister paper Worcester Telegram & Gazette said in August that visitors to its site would only be able to access 10 articles a month before being asked to buy an online subscription for $14.95 per month. The Globe says it has not yet determined how much it will charge for access to the new BostonGlobe.com.

The paper says that the “two brands” model “appears” to be the first of its kind, although other newspaper publishers have added second online brands that are also less dependent on content from the print newspaper. The McClatchy-owned Miami Herald, for instance, relaunched its flagship Miami.com site two years ago as an entertainment guide but continues to put content from the print newspaper on MiamiHerald.com.

Globe Publisher Christopher Mayer tells his own paper that the newspaper’s two sites will allow the paper to cater to both “casual and occasional visitors” to Boston.com who want quick access to the paper’s stories, as well as “committed readers” who are more likely to read stories on the site written for the print newspaper. A glance at the current site, though, shows that a large percentage of Boston.com’s content is written primarily for the website, so it might be tough to convince even those “committed readers” that by only visiting Boston.com and not the new BostonGlobe.com they’re missing out on very much.

Will we hear next that NYTCo is pulling back on its efforts to sell its stake in New England Sports Ventures? The subject is sure to come up when Robinson appears at UBS Tuesday.