How the the mainstream media is responding to the rise of social networks was addressed during one of the EconSM afternoon breakout sessions. Vivian Schiller, SVP and GM, NYTimes.com; Rich Skrenta, founder and CEO, Topix.net; Ken Stern, CEO, NPR; and WSJ’s Kara Swisher talked to moderator Tad Smith, CEO of Reed Business.

-- The Zeitgeist Of The Newsroom: Stern said the spirit of NPR’s newsroom is pretty optimistic. “We’re in a unique position to get support from listeners, corporate sponsorship, and 10 percent of our funding comes from the government.” On what’s ailing newspapers, Schiller said that while newspaper advertising revenues decline while online revenue is rising, newspapers are trying to rebalance. And while there’s light at the end of the tunnel, it’s going to take time to get out of the tunnel. Swisher noted recent reports about online ad revenue growth appears to be slowing. For Topix, the focus on local content has grown due to newspapers pulling back regional coverage amid declining revenues. “We’re not approaching this from a J-school perspective - if a new restaurant opens, we define that as news,” Skrenta said. If there’s 20 cop cars in front of a local business, that’s news right there. We focus on things that people find relevant, although it would be considered to small for a major publication in some cases.” Stern noted that the base for mediated, fact-based news has shrunk. I think that’s bad. We invest heavily in fact-based reporting. I understand that the economics of newspapers are clinically depressed. The mindset at a lot of papers is: If you can get someone off the street to give you information for free, why pay a professional to do that? But civic society depends on news, not just information.” The answer lies in finding a new model that incorporates the best of both worlds, Stern added, saying it harkens back to the days of early news radio broadcasts.

-- Not That Bleak: Swisher and Schiller both noted that the financial situation for newspapers is not so woeful. Schiller pointed out that many newspapers, like the Times, are profitable. It’s the growth rates that Wall St. findings problematic. Swisher related a story about attending another conference where newspapers were bemoaning their situation. Following that panel, Barry Diller, the chairman and CEO of IAC (NSDQ: IACI), was dumbfounded by the sad talk. “What are these people talking about? Newspapers are terrific businesses,” Swisher said, quoting Diller. “And here was a non-newsperson getting it right.” As far as the issue of young people not getting their news from print publications, Swisher added that with the rise of online and cable news outlets, people will turn to high quality news providers. “I hate this question about kids not reading newspapers. Other than taping a joint to each page of the newspaper, I don’t know how you get kids to buy paper. The fact is, when you ask where they get their news, they invariably respond ‘The NewYorkTimes.com or CNN.’ So it’s the professional media still count.” Stern agreed that there is still an audience for professional media, but the cost of running such operations, such as foreign bureaus, are huge. “That will remain a serious challenge to all of us.”

-- Google: Friend Or Foe: In response to an audience query wondering how newspapers are affected by Google News, which gets ad revenue by aggregating news stories from various sources. Swisher said, “Google is a parasite, but it’s a helpful parasite.” Schiller picked up the baton, adding, “We love Google (NSDQ: GOOG). It’s introduced a whole new class of readers. It does bring in traffic. On the friend or enemy, we fall on the friend side.” Overall, Schiller said that she considers this the best of times. “We have numerous ways to reach readers, from online to mobile.” Stern said it’s more mixed, especially for the local newspaper industry. Swisher ended the session with pithy quotes from here grandfather: “He said, ‘If someone’s going to eat your lunch, it might as well be you. He also said that if people are hungry, they’ll eat dog food. Well, people are hungry. And that means there’s an opportunity for people with high standards to jump in here and provide something great. Newspapers don’t need to roll over, so to speak.”