Charging (a lot) for news online: The Newport Daily News

Hacker sets up a blog and a GiantBomb.com-style structured wiki of every person, place, thing, story and issue in town. They now have the speed advantage and own local search. He also cooks up a self-serve, stupid-simple advertising system that works just like Facebook's original Flyer program. $15 bucks to run a flyer for the day. $50 for the week.

Reporter covers local meetings and businesses and recruits citizens to contribute to a town hall blog. The goal is not so much to get pageviews off the citizen blog, but to show the community that the cool people are all on board.

Business guy meets every small business owner in town, organizes weekly reader meetups, handles sponsorship sales.

In three months, they could position themselves as THE web site for the community. Then it's a matter of selling monthly sponsorships at $300/month to local businesses and professionals who want a seat at the town's front page. You sell 40 of those and you're making $160,000/year. Add on another $20-30k in flyer sales.

Meanwhile, the biz-dev guy cuts a deal with a few regional outlets to syndicate their content to them and with a few local businesses to host sponsored blogs for them.

And 1-2 times a year they throw a must-attend event and make a profit off ticket sales.

There's probably a bit of a ceiling to an approach like this, but the right three guys could more or less call the shots in their community once they get up and running.