If he ever tires of running his charitable foundation, it could be just the thing to distract Bill Gates during his retirement.

The Seattle Post-Intelligencer, Gates’s hometown newspaper, is up for sale. Tracing its history back to 1863, the title has followed in detail the rise of Microsoft and its co-founder. In fact, Gates’s success has contrasted sharply with the newspaper’s slow decline. Even though the neon globe on top of the PostIntelligencer’s waterfront headquarters is still one of the city’s landmarks, its print edition and hundreds of jobs face extinction.

Hearst, the publishing group that has owned it since 1921, has given itself six weeks to find a buyer or else the newspaper faces closure. The P-I lost $14m (£10m) last year and hasn’t turned a profit since 2000. It is a familiar story in cities across America and in Britain.

What used to be a local monopoly or duopoly for selling a house or car has been overturned by the onslaught of the internet. News aggregators such as the Huffington Post, which invest little in their own journalism but collate articles written elsewhere, are grabbing eyeballs that would otherwise be reading a newspaper’s own website.

Enders Analysis thinks that 30% of Britain’s local and regional titles could be making losses within two years. Deloitte believes that this year one in ten print titles could reduce their frequency of publication, go online or close.

In many instances the only hope of staving off extinction lies with public-spirited tycoons, such as Alexander Lebedev, the former KGB agent who bought control of London's Evening Standard for £1 last week from the Daily Mail group.

Where previously press barons owned newspapers for prestige and profit, today many have to make do with prestige alone. Newspapers are preparing for an era of sharply lower profit margins. Some are already well placed. The Guardian and Observer newspapers are preserved within a trust that has diversified into business publishing to offset their losses.

However, the decline has been steep enough to catch out people who should have known better. Sam Zell, a property magnate who splashed out $8.2 billion to buy the Chicago Tribune and Los Angeles Times in 2007, filed for bankruptcy protection less than two years later.

Carlos Slim, the Mexican telecoms bil-lionaire, has also been drawn to print, but so far without failure. Last week he helped out The New York Times with a $250m bailout that could leave him with an 18% shareholding, smaller only than the title’s historical owners, the Ochs-Sulzberger family. He also has a 1% holding in Sir Anthony O’Reilly’s Independent News & Media, which owns The Independent and Independent on Sunday.

Experts predict more unpicking of the bigger newspaper groups that attempted to use economies of scale to increase profits and offset the industry's decline.

“The likely prognosis is that we will see more private deals and a withdrawal of the institutional and private-equity investors who have tried hard to milk the newspaper industry, but have done little to enhance the value or importance of newspapers,” said Jim Chisholm, a newspaper consultant at iMedia Advisory Services.

The Standard’s continued existence could prove to be the exception rather than the rule. Closures stem from there not being enough tycoons to go round. Lebedev has made it clear he is not expecting to make a quick return. “This is not my way to make money, but I’d like to explain to the public that newspapers are something they should love and cherish,” he said. The Standard’s new owner will subsidise 20% of its running costs.

Others think the industry could have a future if it adopts new ways of thinking.

“Newspapers need a radical plan to adapt,” said David Elms, media partner at KPMG. “I’m not sure that just migrating to the internet necessarily works. They need to develop an integrated offering that creates very close linkage with their customers and advertisers as well as working harder on subscription models.”

It is not the sort of charity Gates had in mind when he set up his foundation.

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