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Free newspapers pile up profits

Not many companies can reap handsome profits by giving away everything they produce. But in the newspaper business, an enterprising group of publishers is doing just that. By relying solely on advertising revenues, their papers prosper without charging readers a cent. From the suburban Boston Tab (circ. 150,000) to Berkeley's East Bay Express (circ. 45,000), free newspapers, most of them weeklies, are finding lucrative editorial niches and providing a sprightly alternative to established dailies.

The free papers are usually distributed in carefully selected neighborhoods and shopping centers. Advertisers such as movie theaters, concert halls, groceries and restaurants use the free papers...

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