Newspapers, TV and radio news shows and general interest magazines generally built audiences by bundling together a variety of content - general news, sports, weather, business reporting, lifestyle and entertainment, and so on.

The Internet dismantled those bundles, creating opportunities for niche products in each topical area that competed with general interest publications and networks.

See, for example, the book "Blown to Bits: How the New Economics of Information Transforms Strategy" by two Boston Consulting Group executives. The book grew out of a 1997 Harvard Business Review article they wrote, in which they pointed to newspaper  classified advertising as a prime example of a product that could be un-bundled from the print product and done better online.

General news stories have increasingly become a commodity, available at numerous websites such as Yahoo! News or Google News or a variety of other online news aggregators.

Some general interest publications will survive in this environment, such as major national newspapers like the New York Times and USA Today, or cable networks like CNN, Fox News or MSNBC.com. 

But local news sources, especially metro newspapers that serve a wide geographic area with a variety of content, have been forced to re-think their online strategy in the face of a new competitive environment online in which a myriad of highly focused sites chip away at the traditional bundled product.

Some news organizations are forming alliances with competitors to share more generic news stories and thus reduce the cost of providing news that is easily obtainable from a variety of sources. See the Associated Press' round-up of these efforts: Some news-sharing alliances that emerged in 2008.

Instead they're focusing on a hyperlocal strategy. Rather than delivering one product with commoditized news to a large geographical area, they're creating locally focused products for individual communities that offer more extensive and in-depth coverage on local issues.

And within those very local communities, online sites can slice up content even more, creating "verticals" on specific topics of concern to local residents. Thus a local site would have sections on crime, education, health care, etc. similar to the beats of traditional newspapers but with much deep and richer "evergreen" content (stories supplemented by databases and background information). See for example the Online Journalism Review story urging local newspaper sites to create online sections on health care reform - Newspaper websites offer no cure on health-care reform.

Besides newspaper, the local market has attracted many independent community news sites, as well as start-up companies that have rolled out platforms for creating hyperlocal websites across the country.

See this long list of the different types of hyperlocal websites.