The Austin American-Statesman has come up with a clever way of tying online and print readers together by offering a pair of discounted subscriptions to Twitter users who follow the @statesman account.

Readers can choose from a four-day subscription to the paper (Friday through Monday) for $5 a month or a seven-day subscription for $6 a month, a savings of 70 percent from the regular price.

Internet editor Rob Quigley and publisher Michael Vivio teamed up on the idea and shared their brainstorming through their individual Twitter accounts. Nearly 7,000 people follow updates from @statesman, and it will be interesting to see the impact of this special offer.

To illustrate what a poor situation that is, let’s go back to September, where media analyst John Morton told the Statesman’s Dan Zehr that “a rule of thumb for valuing a newspaper is $2,000 multiplied by the average daily circulation over a week. For the Statesman, that comes out to roughly $350 million.”

In that same September story, Zehr writes that “Five years ago, a newspaper typically sold at 12 or 13 times its earnings before taking out taxes, interest and other accounting-related items. That’s down in the 5- to 7-times range now. The Statesman likely would go at the upper end of that range.”

The Statesman is owned by a private company, Cox Enterprises, so we don’t know what its earnings before taxes are, but I would bet it’s a lot more than $8-10 million. And Morton’s rule of thumb would now be $300 per average daily circulation, down from $2000.

If that much has changed in the past six months, then the market for a profitable newspaper, with no other daily competition and a growing web presence, has bottomed out. The land that the Statesman sits on is worth $32 million on its own, according to Travis Central Appraisal District records.

So what does Cox do now? The company said it wouldn’t rule out selling the paper and the land separately. They can either sell one of their well-performing papers for one of these low-ball offers, or hold on to it and see what’s around the corner. It’s a depressing situation to be in for the newspaper’s owners, and for those who work there.

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3. Behind the Scenes with Mad Men on Twitter Saddled with a terrible time slot opposite the Guy Kawasaki/Chris Anderson keynote, the people behind the Mad Men characters on twitter (@PeggyOlson, @bettydraper, @Roger_Sterling) told the entertaining story of how, without the support of Mad Men or AMC, they began talking to fans of the show and extending the lives of the characters online and between episodes and seasons of the show. Instead of fan fiction, they called it brand fiction.
4. Is Privacy Dead or Just Very Confused? Just because you share what appears to be a lot of personal information on Facebook or Twitter doesn’t mean there are things that you keep to yourself. Privacy isn’t all or nothing, and the business of what’s private and what’s shared can change depending on context.
5. HOWTO: 149 Surprising Ways to Turbocharge Your Blog With Credibility! More accurately known as the Merlin Mann and John Gruber show, the duo mixed inspiration with humor and practical tips for getting the most out of what you put online. (Plus, Mann did a spot-on impression of Ira Glass (or maybe Alex Bloomberg).
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8. From Blog to Book Deal: How-To You can follow in the path of Guy Kawasaki, Stephanie Klein and Hugh MacLeod, but you’ve got to hold up your end of the bargain by first creating something worthwhile. Once you become known, it becomes easier for other doors to open for you (agents, publishers, marketing).
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10. Comedy on Television and the Web One of several panels that was fine on its own, but didn’t match up to either audience expectations or its original description. A crowd showed up to see B.J. Novak of The Office, but the panel mostly focused on serious issues of how comedy has led the way in the web video boom.
11. Building a Web Business After Hours Inspiring stories and concrete examples of what to expect when you try to launch a business on your own terms.
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Thanks to Michael Barnes for the pointer to John’s blog. Michael also got John to share his reading list for media blogs.

Interesting tidbit near the end of today’s Statesman story about the paper’s search for a buyer. A significant portion of the value of a sale is the land that the Statesman sits on. The 18.8-acre tract at South Congress and Lady Bird Lake is appraised at $32.3 million. Today’s story says that “dozens of developers have approached Cox about the land … but none has been able to stomach the cost of moving the four presses.”

Cox won’t rule out selling the newspaper and land separately, he said, but it doesn’t intend to do so. “The highest and best use of the site is significantly more than what’s located there,” said Charles Heimsath, president of Capitol Market Research, an Austin real estate consulting firm.

It’s been odd enough to think about the Statesman under new ownership, but even odder to think about them not being in their familiar location.

Is This A Good Time to Sell a Newspaper?
In the Statesman’s own story, industry analyst John Morton puts it quite bluntly: “This is a terrible time to be trying to sell a newspaper. The sales value of newspapers has probably dropped in half in the last five years. … There are a lot of newspapers that are up for sale and there are no takers or no one willing to pay what the sellers want.”

But Morton and fellow analyst Edward Atorino both concede that billionaires and local businessmen who like the newspaper business could emerge as potential buyers.

So clearly, it’s definitely a buyer’s market out there. The New York Times pointed out that even though some bargains may be out there, there are fewer buyers interested. Papers saddled with large debts and dwindling profits don’t make attractive targets.

Is the Statesman a Good Buy?
Cox is selling an attractive property and using the proceeds to pay down debt in the rest of its business — this is the same method the Tribune company used when it sold its papers to billionaire Sam Zell.

Cox is a privately held company, so it doesn’t disclose financial information, but Statesman publisher Mike Laosa has said the paper is profitable. Like other newspapers, the Statesman has taken a financial hit because of decreasing circulation, lost advertising revenue, and a down economy, but the hit has not been as bad as for papers in Palm Beach and San Diego, who have relied heavily on revenue from real-estate listings and see a dramatic downturn in that area.

The paper is nearing completion of a project that will expand its facilities and house new equipment, giving them more flexibility in packaging and distribution.

And from an overall perspective, the state capital, a university town, and Austin’s high-tech community provide attractive incentives for a local media company.

Who Would Buy It?
One potential suitor might be another newspaper company, but as the Times pointed out, it’s not a good time for those folks. The Sun-Times Media Group is losing money rapidly, Tribune and McClatchy are weighted down with debt, and the most avid buyers, like GateHouse and the MediaNews Group, are in no position to keep buying.

Belo owns the state’s premier paper, The Dallas Morning News, and they have a strong presence in Austin with their capitol bureau. Hearst owns both the Houston and San Antonio papers, so an Austin buy would complete a trifecta in that area of the state.

Another potential suitor might be a wealthy individual or group of investors. State senator Dan Patrick said on his radio show that he’d be interested in purchasing the paper if it makes good business sense, but it’s unclear whether he’d be a serious bidder. Would Michael Dell be interested? Or Austin Ventures?

What Happens Now?
The folks at the Statesman will go to work as usual, and it will likely take months before a buyer emerges. In the meantime, I have a few ideas of how the current company might begin to evolve, regardless of their eventual owner, so they might find themselves well-positioned in the future:

• Make the online archives free — the increased search advertising revenue and the boost in relevancy outweigh current revenue from archive fees.
• Create their own local advertising network to head off challenges from competitors like Google.
• Make deals with smaller publications and offer to sell advertising into their print or online products for a split of the revenue.
• Ensure a laser-like focus on covering stories in Austin and Central Texas, and become the definitive source on key areas: the legislature, Longhorn sports, local music. Consider offering premium content (subscription newsletters, for example) on those specialized topics.
• Provide coaching to bring current editorial employees up to speed with online tools.
• Provide news and information to customers at any time, in any location, on any device.

The Digital Edge Awards categories, part of the Media Innovation Awards, drew more than 200 entries from U.S. newspapers of all sizes. The volunteer team of judges, who are all experts in the newspaper digital media industry, named finalists from 40 newspapers.

A full list of winners can be found here.

First it was me:

Now it’s this guy:

Statesman photo by Kelly West