Credit the EastBay Publishing Corporation with attempting to bring the local news into a virtual environment.

The group has added a “virtual valley” function to its two papers, the San Leandro Times and the Castro Valley Forum, for which you need to download the Unity 3D plug-in to use. The “valleys” are in beta, so there is little functionality thus far. You can move through a sort of community space that has a few buildings, including a library, a storefront and an information stand. The most noticeable aspect of the virtual community so far seems to be the placement of advertising.

A community paper thrives on its ability to serve a community. Is there any advantage to a virtual world exploiting the niche of a local community that can’t be served by other social network sites or blogs? That is the challenge that the “Virtual Valley” is trying to meet.

The newspaper industry is in huge decline right now, and most print news outlets, if they do not establish a viable online vehicle, will not survive. Quite a few community papers are relying on a healthy blogging presence to outreach with the community and ramping up other community relations in other ways. A virtual world is a nice idea, but only if it can add to the value of the news. If a virtual world’s main intention is to draw in advertising dollars, it will be difficult to maintain.