(Fortune Magazine) -- Never pick a fight with someone who buys ink by the barrel. Mark Twain's advice was apt in its time but sounds downright quaint these days. The ink-stained publishing world is battling against companies like Google and Yahoo that sell ads via any Internet-friendly gadget. And we know how that fight is going: The buy-ink-by-the-barrel types are struggling.Behind all the handwringing is the fact that the Internet has not yet become the moneymaker that the $300 billion global publishing industry had hoped. Online revenue is growing, but not fast enough to make up for falling print advertising. Even the New York Times, a paper that has turned its staff loose online more than most, needed a recent $250 million cash infusion from Mexican telecom billionaire Carlos Slim to keep chugging along.
So if the Internet can't do it, what can save the New York Times (NYT) or your favorite magazine from withering away? Increasingly, publishers like News Corp. (NWS, Fortune 500), Hearst, and Time Inc. (the owner of Fortune) are looking toward a coming generation of so-called e-readers. These are handheld gadgets akin to Amazon's Kindle or the Sony Reader that use electronic "ink" rendered on a crisp screen to deliver an experience that approximates reading on paper - without the cost of paper, printing, and delivery.
Today the Kindle and the Sony Reader are mostly suited to books because their six-inch-diagonal, black-and-white displays simply don't provide a good enough reading experience and advertising environment for magazines and newspapers. But at least a half-dozen companies, including giants like Hewlett-Packard (HPQ, Fortune 500) and Fujitsu and startups such as Polymer Vision, FirstPaper, and Plastic Logic, are developing a new crop of readers, some of which will start hitting the market later this year. Designed with the requirements of newspapers and magazines in mind, they will feature larger screens (to make it easier to navigate through stories), wireless updating (something the Kindle has made a requirement), better image resolution, and eventually color and video.
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