Yesterday we reported on a speech by Rupert Murdoch (left, from Wikipedia) to newspaper editors in which he so much as said their industry will be killed by the Internet.

Personally I don’t think this is necessarily the case. Newspaper companies will be able to use computers and on-demand pagination to mass produce paper products that are relevant to future audiences. Just as radio and TV only forced the industry to change, not disappear, so it will be in this case.

But let’s assume Murdoch is right. How can incumbent newspaper companies achieve anything on the new medium? His speech read like someone anxious to learn. I'll take him at his word.

Following are some ideas.

1. Think cellular. Operators have erected high, if artificial barriers to entry. This is to the newspaper industry's advantage.
2. Think in terms of services, of buyers and sellers. Don't think in terms of news and audience. Your news effort just builds a database that can be used in these services.
3. Concentrate on the economic process. Blogs are content. Podcasts are content. They are editorial processes. Think in terms of serving readers, turning them into your prospects, passing them on to advertisers.
4. Separate out prospects from suspects. Look for ways to help your current advertisers -- car dealers, real estate brokers, department stores -- find the best prospects and gain more permission from them. This means services that get real prospects to raise their hands so they can be directed to advertisers, who can build prospect databases from them.
5. Start with big accounts. Only after your effort scales should you move the offering down to smaller advertisers, and eventually build a local eBay.
6. Think immediate. Look for ways to help the coming audience -- young, mobile -- gain immediate value from immediate information. Think traffic alerts that route around jams, customized ideas for what's happening tonight.
7. Immediacy means both space and time. Home sales in my zip code, arrests in my neighborhood, bloggers and Web sites in my neighborhood writing about local events, these have meaning. Murders across town may not.
8. Databases are key. Think in terms of databases, and matching databases, rather than in terms of news or advertising. The former is dynamic, the latter static. This means everyone's newspaper is different, just as Google News can be customized.
9. Protect privacy. Earn the trust of your readers by protecting the personal data they give you as fiercely as you do your current subscription list. Don't give out names until readers raise their hands and say they want to buy something specific. Once they do that they have enormous value.
10. Demand profits. Every service you create must be profitable, on its own, within a given time frame, or you should drop it.
11. Buy what works. The people who built what works will prove more valuable to you than what they built, so don't buy into the idea that you can just do what they did and steal their audience.
12. Make everyone compete. Always consider replacing the people you put in charge with the people whose smart operations you buy. Only a highly Darwinian executive environment will give you the dynamism you seek.
13. Experiment continuously. You're building a set of local services, not an online newspaper.
14. Leave the current staff alone. Let the newspaper people explore mass customization of their current product, but keep them out of everything else. They're too wedded to the past to be useful.

Like I said, I don't expect Murdoch, or any other news baron, to follow any of these rules. (James Cox Kennedy lives right here in Atlanta. He hasn't called me since the Web was spun, and I don't expect him to.)

As Blofeld told Bond, "I don't expect you to talk, I expect you to die," as telegraph companies were killed by telephony and as radio show hosts were replaced by TV.

But Murdoch asked some serious questions, acted like he was willing to listen to truth, and what you see above is a process for building local Internet-based businesses that are based on tomorrow's Internet rather than today's.

Tomorrow is the only place to be.