The Oracle of Omaha had little good news for the newspaper industry following Berkshire Hathaway's annual meeting. In comments made in the Washington Post, Warren Buffett noted that it was once an excellent investment buying newspapers because a dominant paper in a city could count on steady advertising revenue, and could raise ad rates annually. Not so anymore.

With declining circulation due to alternative new sources such as the Internet and television, ad rates are no longer so elastic. That assertion is backed up by the Wall Street Journal which reports on figures released today by the Audit Bureau which show industry wide declines of between 1-3%.

So, where to from here? Buffet's last comment is a telling one. He argued that owning the dominant news website in a region was not enough to guarantee sustained profitability for newspaper firms.

There is no doubt that newspapers need to secure a strong foothold in the emerging channels which are gradually cannibalising their revenues, but even if they do so – these sites are unlikely to offer the smooth ride and high barriers to entry which they have enjoyed during the last fifty years of publishing.

Ironically, one glimmer of hope is the infinite number of weblogs which are being created every day, and which are endlessly discussing, commentating and driving link traffic back to newspaper websites.

Oh, that is, if the geniuses in newspaper web publishing departments realised that non-expiring links and open access to content was a good idea.