You have nothing to worry about - the mainstream can only survive. But news
paper may become too expensive to maintain as a medium when sites like craigslist basically undercut every newspaper in the world. Of course, the Herald's publishers have a responsibility to make their product a better place to rent an Auckland apartment than any other.
Back in the late 80s I did contract work with the Newspaper Advertising Bureau and helped setup the national advertising distributions systems of the day. While I was there, the "Wire89" system was established - that was NZ's first News internet using frame relay replacing (I think) telex. My job was to make the new wire89 system carry the display ad bookings.
But, as an old hand at "publishing", my ability to keep up with the 19 year old whizz kids is a little limited. I find "groupware" on the internet including Web 2.0 "societies" do not often provide me with that sense of belonging or identity that a mainstream media entity employs talent and specialists to design and present in such a way that it is not challenging or alien.. It is hard to transgress into the wilderness of LOL and IMHO without feeling shut out by a need of the Web 2.0 generation to out-class each other. Youtube is also quite good for attracting video stalkers!
Blogging started with Blogger.com - and I was one of the first million or so bloggers and used it before it sold itself to Google. I had to kick myself, that I had not written it myself. It is so simple, really.
Blogging means when I have an idea, I can file it, and I do not have to worry about reformatting my hard disk anymore. Blogger have kept my online record and I can republish it to any server, including their own. I no longer worry about losing stuff to the blue screen or hard disks grinding themselves to pieces.
The mainstream have adapted to use the new technology. Web 2.0 works but it connects you to too much drivel and wastes time. It is supreme entertainment.
Mediums that are threatened are: TV, Newspaper, Radio. Mainstream operators that are threatened are those who do not evolve their media.
If what I did in 1989 was infant steps, Web 2.0 is adolescence. It is not so much small defined groups (cells) but dynamic fluid entities that hatch casual connections with exact targets over time. More like the way a beehive works (and I most certainly do not mean the ugly one in Wellington).
The information carries tags and individual behaviour is recorded to show what they want to know about. At some stage the semantics join up. Word matching is not how it is done. Human interaction is. Eventually "news" will just be a functional medium driven by those with the best ideas of how to deliver democratic relevancy.
Google news seems to some to make newspapers irrelevant. In fact it raises interest in what news organisations write. The "publication" entity is no longer confined to the pages the paper are written on. It is extended and the more activity (human minds) you engage in synch with each other, the more that will happen in the world.
20 years ago when I wrote a letter to the editor I felt powerless. Now when I blog, and someone reads it and calls me names, I feel engaged. I think Al Gore's campaign is a great example of how the medium can be used to generate conversations. The Guardian's web boards make interesting reading, it exposes more opinions and demonstrates how the mainstream will survive.