Newspapers wrecked my shoulders. It has been this way for two decades, a chronic condition my chiropractor blames on my hauling 50 pounds of newspaper up the hill near the Southern California house where my parents still live. For five years, I was my neighborhood's carrier.

Carriers, like newspapers advertising, have gone missing. Double-shifting adults drive around in the predawn hours, tossing fish wraps onto frozen driveways to help make ends meet. They're replacing preteen boys and girls.

Similarly, Craigslist and eBay (Nasdaq: EBAY) have replaced classifieds. Google (Nasdaq: GOOG) search ads have helped to make quarter-page business ads less relevant.

The steady decline
Businesses shouldn't be blamed for pulling their advertising. Total newspaper circulation peaked in the U.S. in 1988. Subscription numbers have declined each year since, according to figures compiled by Editor & Publisher and hosted by the Newspaper Association of America (NAA). In 2008, circulation fell to less than 50 million for the first time since 1945.

But 2009 was one of the worst years in newspaper history. Overall ad spending fell 28.6%, to $24.8 billion, the lowest total since 1984, when businesses spent $23.5 billion. Adjusted for inflation, newspapers haven't been this thin since 1955.

Investors reading that will react in one of two ways: with justifiable disgust, or dangerous curiosity. Has the newspaper business reached bottom? Even if New York Times Co. (NYSE: NYT) is too risky to buy, are smaller-scale newspaper holding companies such as McClatchy (NYSE: MNI), A.H. Belo, Journal Communications, and Media General worth buying at current prices? Can they thrive in the age of the e-reader?

Good questions, all. Let's dig into both the bull and the bear arguments for newspapers.

The bull argument
Buyers will tell you ... nothing. There aren't many buyers. In fact, there's an almost universal loathing of newspaper publishers in our 160,000-strong Motley Fool CAPS investor intelligence database. All-Star investor UltraLong captured the zeitgeist with this pan of McClatchy in January:

Really, how many more jobs need to be cut? Well, it doesn't matter if they can't get ad revenue up and with their online business being only 1/6th of the pie and only up 3%. For that matter, I say they're [doomed]! Couple that with $1.93 billion in both short and long-term debts and even with profitability they'll never climb out of this mess they're in.

UltraLong makes a fair point. McClatchy's debt was more than 10 times equity and 91% of capital as of December. Media General had four times more debt than equity. Journal Communications looks more reasonable, though debt still accounted for 89% of equity and 47% of total capital. In each case, debt certainly stands in the way of earnings growth.

So why be bullish about companies that owe too much and produce too little advertising revenue? Because no one else wants the job. A well-constructed contrarian investing strategy can be profitable; it's the essence of what we do at Motley Fool Rule Breakers, and our average pick is up 25%, crushing the market.

Consider, too, the technical changes coming to the newspaper business. Newsprint is crazy expensive. Any reduction in these companies' dependence on ink should aid their ailing bottom lines. What's more, if Apple and (Nasdaq: AMZN) create attractive subscription models for their e-readers, these papers could realize higher revenue even as they adopt transformative cost structures.

Kindle was responsible for more than 10,000 e-subscribers to New York Times Co. in 2008. My guess is that number has gone higher -- much higher -- in the months since. It's the most rational explanation for The Times' public, if schizophrenic, bear hug of the iPad.

Finally, let's concede the obvious: The industry, as is, has already failed. Drastic transformations are all that's left, and they might be enough to give life to this zombie industry.

The bear argument
But that's a long shot, and it may even be wishful thinking. News Corp.'s (Nasdaq: NWS) Dow Jones subsidiary is the rare media outlet to create a pay-to-view digital model, highlighted by the e-editions of The Wall Street Journal and Barron's.

And for as much talk as there is about the ascendancy of local content and hyper-targeted advertising, a recent report from media experts BIA/Kelsey projects just 2.2% growth a year from 2009 to 2014. That doesn't necessarily sound like a growth market, does it?

To be fair, that figure covers all local media, not just newspapers. Nevertheless, it reflects the trend: Digital trumps traditional, regardless of whether we're talking national or local media. Newspapers aren't leading the shift to digital.

Why would they? Newspapers offer a tactile, serendipitous experience of browsing and discovery. E-readers allow for sharp and efficient digestion of content; they're built for blogs, newsletters, niche magazines, and newspaper sections. But entire newspapers? It's hard to fathom.

Let's put this in the starkest possible terms. AOL, at 43rd, is the world's top-ranked digital media portal, according to Web information company Alexa, and even that's a distant second to blogging portal, which ranks 18th. For further comparison, The Times' ranks 94th and The Wall Street Journal online ranks 264th.

Buy magazine publishers instead
It's fashionable to suggest that the iPad is going to transform media in general and newspapers specifically. That's possible, but it's more likely that only a handful of existing papers will be able to shift subscribers to their digital editions.

I don't see magazines suffering the same fate. Special-interest magazines are like blogs in that they attract readers with a specific content need. Advertisers love this; specificity increases relevance, and relevance is worth paying for because conversions -- i.e., ads that create actions -- are more likely. Relevance is why contextual ads work.

So while I'm not betting on newspapers at these levels, I'm bullish on magazine holding companies such as Meredith (NYSE: MDP). Top properties such as Parents, Better Homes and Gardens, and Family Circle will be made better by interactive e-readers, leading to more relevant ads, higher rates, and ultimately outsized returns to shareholders.

Would you buy magazine publishers at current prices? What about newspaper publishers? Discuss in the comments box below.