(To respond to the graphic at the right click here.)
We use open source tools. A small staff works with a large group of writers who are paid based on performance. The key is to monetize pages enough so income equals outgo with a bit left over.
The New York Times reports that something along these lines is starting to happen in local journalism. The story focuses on the editorial effort, young reporters in an office talking on telephones.
This is a bit like analyzing a bull from the rear end. It's the wrong way to go about it. The right way to evaluate an open source enterprise is through the business model. The output is a byproduct.
In the case of local journalism the job is to organize and advocate the market. Just as ZDNet organizes and advocates tech for you, a local newspaper should do the same for its community.
In business this is done through a directory. Each business you mention is a push pin on a Google map, linked to the story, and linked to its Web site. They don't have a Web site? Sell them one.
By building an organized Web presence for businesses large and small, you build the continuing revenues any editorial effort rides on.
The key metrics are links and traffic. Keep building the former, monetize the latter, and you can build a business online. Even if you're doing local news.