Judge Leonard Davis of the U.S. District Court for the Eastern District of Texas ordered a permanent injunction yesterday that will ostensibly prohibit Microsoft (MSFT) from selling Word within 60 days. It’s the result of a lawsuit filed by Toronto-based i4i, which claims that Microsoft violated a patent it owns regarding XML files. Microsoft is also supposed to hand over $290 million in damages.

There are more details from SeattlePi.com (still extant!) and TechDirt. But the most salient point here is that this is a ruling on a patent lawsuit filed in eastern Texas, which generally exists in its own orbit when it comes to patent lawsuits. So odds that this one will stick are awfully low.

Other equally important news: This footage of a guy in a wetsuit zipping down a giant water slide, up a wooden ramp and flying hundreds of feet through the air before landing in a kiddie pool is not real. It’s just a viral ad for Microsoft Germany.

But it’s pretty cool.

OK. But exactly how much less?

I’ve been asking Mark Josephson that question for months, and now he has an answer. Josephson, the CEO of local news platform Outside.in, figures the local, online-only newspaper of tomorrow, for a decent-sized city, will have a staff of 20 people. That’s 20 people, period. Perhaps six of them will be “news gatherers.”

Josephson was kind enough to model his future newspaper in a spreadsheet for me, and I’ll get to that in a minute.

But first, the context. Josephson’s opinion is worth noting because his company is supposed to play a role in creating said future newspaper/news site.

The pitch: Outside.in wants to help local news sites by supplying them with a river of extra content created by local bloggers, Twitterers and lots of people who don’t even think of themselves as content creators, like people who post real estate listings. The local site is supposed to aggregate and filter the stuff and sell ads on it. The people supplying the content get more exposure via links from the bigger site.

The three-year-old company has just rolled out a new tool that’s supposed to make all of this easier for local publishers, which could be a newspaper site but doesn’t have to be. For instance, the company has tested its “Outside.in for Publishers” offering with sites run by local TV stations. You can read more about it here.

Now back to Josephson’s news site of the future: He imagines that the tiny editorial staff of the model newspaper produces an extraordinary number of page views–40 million per month, in this example–and then augments it with twice as many page views from a third-party network (which could be, but doesn’t have to be, supplied by Outside.in).

A sales force of a dozen people sells ads for both buckets of inventory, and uses ad networks to fill in remnant space they don’t sell. Net result: A very healthy 43 percent operating margin, much better than the 27 percent margins the newspaper industry enjoyed from 2000 through 2007, before the business imploded.

Here’s what the math looks like: I’ve broken up the P&L into three sections, and clicking on each of them will enlarge the image. Or you can view the whole thing as  a Google document here.

Josephson stresses that his model is a starting point, and he’s happy to tweak any of the inputs.

If you think his assumptions about ad rates are too aggressive (and some local publishers I’ve talked have given me that feedback), you could knock them down. Same thing with page view goals. Or if you decided you wanted to run the business at break-even instead of trying to make a profit, you could do that too, and see how many more people you could afford to hire.

But no matter how you fiddle with the numbers, there’s no way that Josephson’s model gets you anywhere close to old newspaper staffing levels, whereby a paper like the Seattle Post-Intelligencer employed 150 people on the editorial side alone.

But those staffing levels don’t work anymore, which is why Hearst shut down the paper and replaced it with the online-only SeattlePI.com, which has a 20-person edit staff, earlier this year.

So Josephson’s numbers really become an ink-blot test: Do you think they spell doom for news sites in the Web age or an optimistic solution that lets them survive? Let me know in comments below.

But while Hearst isn’t ready to declare victory, it does say that the first two months of seattlepi.com’s life have been “encouraging.” Via a press release, Hearst offers up a bevy of traffic stats that show the site has grown even as its staff has shrunk. Hearst doesn’t offer up any info about revenue, but does say that its “sales and marketing team is highly energized.”

I sincerely hope so, and I sincerely hope it works. I still don’t get the math: Hearst says seattlepi.com is attracting 4.3 million monthly unique visitors. Chris Batty, who runs sales for Nick Denton’s Gawker Media empire, figures that traffic could support a staff of perhaps a dozen editorial workers at one of his sites–not the 20 or so that Hearst has working in editorial.

And bear in mind that Gawker’s titles have a national focus, not a regional one, which makes it much easier to sell than Seattlepi.com.  There may be a thriving business for regional/local online ads one day, and we’ve been hearing about the potential for many years. But it’s not there yet, and it’s not close.

Still, better to have Hearst says it’s encouraged than to have Hearst pull the plug after a few days.

Two months after becoming the nation’s largest newspaper to move to an all-digital news model, seattlepi.com’s year over year numbers show that it has more users this April than last April, when the Post Intelligencer was still publishing with an 80% larger staff, an amazing feat for an online venture with a newsroom of 20.

In April, its first full month of operation, seattlepi.com had 4.3 million unique visitors, up 1.6% from 4.2 million in April 2008 (source: Omniture). Total page views for the month were 37.3 million.

During the last week of April, the site broke its one-day unique user record since going online-only. There were 324,000 unique visitors on April 30—the 4th highest day in terms of unique visitors in 2009—breaking previous records set since going online only on April 29 (290,000) and April 27 (283,000). Total page views for those days were 1.5 million, 1.4 million and 1.5 million, respectively.

Two months into our online-only experiment, we are encouraged by this growth in visitors and expect our numbers to improve as we continue to establish new partnerships.

We get a lot of feedback from readers cheering us on and thanking us for continuing to bring them the local news and information they want and need. It’s great to see that not only have we not lost readers, we’ve actually gained new ones.

A new team of more than a dozen sales and marketing representatives and managers has been tasked with building advertising and marketing partnerships and creating a unique Seattle digital advertising agency.

Our sales and marketing team is highly energized to be working with such a vital and dynamic product. We will leverage existing partnerships with Yahoo!, Kaango, Metrix4Media, and others to create what is essentially a local digital advertising agency offering unique opportunities for business in the Seattle area and across the country. Advertisers and other partners understand that seattlepi.com is in an unrivaled, popular destination for news and information, offering tremendous value for exposing their products, services and brands to a large and very desirable audience.

Thanks to John Cook, who used to work for the PI but left last year to cofound TechFlash, which covers Seattle-area business news, for pointing this one out.

The Post-Intelligencer used to have something like 150 editorial employees. SeattlePI will have 20. Michelle Nicolosi, who ran the paper’s old Web site and will oversee the new one, says “the site won’t have specific reporters, editors or producers—all staff are expected to write, edit, take photos, shoot video and produce multimedia.” That sounds familiar, and not a terrible idea.

Can a 20-person staff, augmented by a bunch of local bloggers, put out the same product as the old paper? Of course not. But no one’s pretending they will. It will be a different animal, but that’s not necessarily a bad thing.

The real question — and the one that Hearst itself says it’s trying to answer with this experiment — is whether even a stripped-down site can be profitable. I’m doubtful it will, for reasons I’ve previously expressed. But I’d love to be proved wrong.

Here’s the Hearst press release.

NEW YORK, March 16, 2009— Hearst Corporation announced today that the Seattle Post-Intelligencer (P-I) will become the nation’s largest daily newspaper to shift to an entirely digital news product. The announcement was made by Frank A. Bennack, Jr., vice chairman and chief executive officer, Hearst Corporation, and Steven R. Swartz, president of Hearst Newspapers. The final print issue of the newspaper will appear tomorrow.

“The P-I has a rich 146-year history of service to the people of the Northwest, which makes the decision to stop publishing the newspaper an extraordinarily difficult one,” Bennack said. “We extend our profound gratitude and admiration to our P-I colleagues who have done such an exemplary job under extremely difficult circumstances over the past several years. Our goal now is to turn seattlepi.com into the leading news and information portal in the region.”

“Seattlepi.com isn’t a newspaper online—it’s an effort to craft a new type of digital business with a robust, community news and information Web site at its core,” said Swartz. “It will feature the breaking news reporting of Chris Grygiel and others covering City Hall; Levi Pulkkinen reporting on the court system; popular staff blogs like Seattle 911 with Casey McNerthney and the Big Blog by Monica Guzman; columnists like Joel Connelly, Art Thiel and Jim Moore; and of course, the cartooning and commentary of two-time Pulitzer Prize winner David Horsey. The Web is first and foremost a community platform, so we’ll be featuring new columns from prominent Seattle residents; more than 150 reader blogs, community data bases and photo galleries. We’ll also be linking to the great work of other Web sites and blogs in the community.”

“On the business side, we are assembling a staff to form a local digital agency that will sell local businesses advertising on seattlepi.com as well as the digital advertising products of our partners: Yahoo! for display advertising, Kaango for general marketplaces and Google, Yahoo!, MSN and Ask.com for search engine marketing,” Swartz said. “The site will also feature a digital yellow pages directory powered by Hearst’s yellow pages unit, White Directory Publishers.”

On January 9, Hearst announced that it was offering for sale the P-I and its interest in the Joint Operating Agreement (JOA) under which the P-I and The Seattle Times are published. No buyers emerged, resulting in the decision to move to an all-digital news model. Additionally, the JOA is being terminated. The P-I was founded in 1863 as the Seattle Gazette.

Seattlepi.com will be led editorially by Michelle Nicolosi, executive producer, who has headed the site since 2005. Nicolosi was previously an investigative reporter at the Seattle P-I. She was also previously the editor of Online Journalism Review (www.ojr.org) and taught journalism at the University of Southern California. Prior to that, Nicolosi was a reporter at the Orange County Register, where she was a lead reporter on the Pulitzer Prize-winning Fertility Fraud series.

In January, Nielsen ranked seattlepi.com among the top 30 newspaper Web sites with 1.8 million unique users. The site has an average of 4 million unique monthly visitors, according to internal Hearst tracking.