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The San Jose Mercury News, Silicon Valley's struggling paper of record, is embarking on an ambitious and unusually public campaign to figure out how to contend with the rapid changes -- many of them originating with its readers -- that are transforming the newspaper industry.

The newspaper, long the preeminent authority on technology news, has launched an initiative called "Rethinking the Mercury News" that will be the subject of a paper-wide meeting this afternoon at its headquarters in San Jose.

At a time when many newspapers are staggering around like punch-drunk boxers trying to find a business formula suited to the Internet age, the paper's effort, which is being spearheaded by Deputy Managing Editor Matt Mansfield, appears uniquely clear-eyed and transparent.

"We all look at our slumping circulation and revenue numbers and wonder what kind of changes it will take to grow -- or even keep -- our audience," Mansfield told Portfolio.com in an email interview. "The good news is that we can find out. The answers lie in the people who walk, talk, drive, shop, and read among us every day."

Mansfield does not have the luxury of time on his side. Last month the paper cut its news staff by 17 percent. It was the third round of newsroom cutbacks in the past two years.

At the core of the Mercury News campaign is a deceptively simple idea: Give the readers what they want.

To achieve this, the paper is preparing to conduct an extensive survey of its readership, to be undertaken by teams of staff members from all departments at the Mercury News, who will venture into the community to observe and catalog readers' news consumption habits.

"We intend to focus outward so we can know best what media consumers want and need," Mansfield said. "The challenge will be to discover those things that will grow the business while holding to the core component of the great journalism that has come to distinguish the Merc."

Perhaps no news organization in the country is more acutely aware than the Mercury News of the challenges facing newspapers in this era of media consolidation and technological change. The paper's readership, encompassing Silicon Valley, is arguably the most tech-savvy in the country.

The paper also has the added challenge of catering to an audience that expects local news coverage in addition to its signature tech franchise. Mansfield said he is well aware that the paper plays a very important role not only for Silicon Valley businesses, but for their employees as well.

"We're hoping that we get a level of engagement that's meaningful," Mansfield said. "We believe we will because Silicon Valley has a lot of thoughtful people who understand that a thriving local media is important."

Mansfield said the paper's role in fostering a sense of community in the Bay Area "calls back to journalism's early roots." It's a mission, Mansfield said, "not to lose as we head into the future."

The paper is taking a very public approach to its reinvention, complete with a "Rethinking the Mercury News" blog, co-written by Mansfield and investigative reporter April Lynch, and a Facebook group.

As data rolls in from readers, it will be uploaded to a central database available to everyone in the newsroom. Mansfield said the paper would be incorporating principles developed by the Newspaper Next project and the Ideo design consultancy.

The paper will also host a series of "group conversations about the media in general and the Mercury News in particular, with groups such as Silicon Valley thought leaders, business owners, and community advocates," Mansfield said.

The Mercury News, long a crown jewel of the Knight Ridder chain, has been on a roller coaster ride for the last year in the wake of the McClatchy Company's $6.5 billion purchase of Knight Ridder. Shortly after the sale, McClatchy sold the paper to the MediaNews Group.

Despite the daunting challenges facing the Mercury News, staffers are moving forward with remarkable optimism and aplomb. The paper's blog borrows a line from the X-Files to capture the spirit of the new initiative:

"When it comes to starting the reinvention of the Mercury News, the X-Files may have said it best: 'The truth is out there.'''

by Sam Gustin

The first entry on the Mercury News's rethink blog can be found here.