This paper firstly modifies Judd's (1985) model of multiple products by taking into account the heterogeneous competition in Taiwan's newspaper industry. It is concluded that closing the Min Sheng Daily is indeed a short term optimal decision for the United Daily News group. However, in the long run, our paper shows that the withdrawl of the United Daily News from the entertainment news market could induce further and more severe competition in the general news market. We will by conclusion offer several management suggestions to Taiwan's newspaper industry.