Daily newspapers are shrinking, digital news ventures are desperately seeking profit, and Politics Daily features a serialized crime novella on its website? What is Melinda Henneberger thinking? What is she doing with AOL’s money?

“Fiction in newspapers is a tradition that goes way back to Dickens,” Henneberger says. A former New York Times reporter, she has been at the helm of Politics Daily since its start in May. Financed and fed by AOL, it has become one of the most popular political sites.

“People who come to our site are interested in politics—why not political fiction?”

For nine days Politics Daily published a novella in serial form by Washington writer James Grady. It started with a gang shooting in DC; it took readers on a high velocity trip through city streets, populated by thugs and good guys, like Dante Jones, an ex-con trying to make peace between beefing crews. It ended last week. You’ll have to read it to find out whether Rhea, Dante’s woman, got her man back in one piece.

In the first chapter, Dante and Rhea are driving through DC. His cell phone rings. An ally tells him two kids were gunned down near Liss Gardens; blood could flow.

“We’re going home.” Rhea shook her head like she did when she had to give bad news to patients at the clinic. “You’re done with that.”

“Still my city – our city. Our country. Still people like us.”

“People like us don’t shoot people.” She stabbed her finger at him.

“Don’t tell me about you in Vietnam or the what-next: you did your time.”

“Liss Gardens was my last gang truce. Maybe it’s not over.”

“It’s never over.” Her voice softened. “I’m live and breathe proud of you, but it’s somebody else’s turn to step up. You aren’t some street-walking Henry Kissinger!”

“I know who I am,” he said as the windshield filled with a sports stadium named for assassinated Senator Robert F. Kennedy.

“’You want to be Henry Kissinger,” said Rhea, “go into politics.”

“What I do is politics.”

That is Grady’s point. A novelist and screen writer who wrote “Six Days of the Condor,” he’s been writing hard-boiled fiction, hanging with DC’s cops and peacemakers.

“I wanted to write about politics but not about senators and talking heads,” he says. “The people I got to know on the streets of the city practiced politics in a fundamental way at a much higher level than what we see on Capitol Hill. Political science has not caught up to what these guys are doing.”

If Luther, the grizzled drug dealer, could stand in Harry Reid’s shoes for a week, health care might pass like a breeze off the Potomac.

Grady knows gritty Washington and the marble city of monuments. He drives the tale through town with enough references and flashbacks to orient the reader in both worlds. His prose is more Twitter than Gabriel Garcia Marquez. No 200-word paragraphs here. Lots of speed, dialogue, movement, action.

“I envisioned it as if it were a TV show,” he says. “Every episode had one particular drama and a through line.”

And a cliffhanger, the device used by Alexander Dumas when he wrote “The Three Musketeers” in serial chapters published in a magazine in 1844.

Can a device that hooked 19th century readers command the attention of media skimmers of 2009?

“We think of politics as broadly defined as possible,” says Henneberger. “We are taking a much more magaziney approach. In a way it’s counter programming.”

The idea to try fiction came up through discussions among the staff, who work in separate locations without a central newsroom. Henneberger declares the Grady experiment a success, but she’s not declaring victory for her model of old school journalism, strong on reporting and writing, short on vitriol.

“It’s a gamble,” she says. “I’m grateful it’s one AOL is willing to take. Everyone is searching to find a model that works.”

Politics Daily seems to be working. It gets 4.8 million unique visitors a month; Politico attracts a third that number.

Will Henneberger publish fiction again?

“Oh, yeah,” she says.

It was the best of times, it was the worst of times. . . .

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