Newspaper Chains Gain Major Stake in Topix.net

 
 
By Matthew Hicks  |  Posted 2005-03-23
 
 
 

Newspaper Chains Gain Major Stake in Topix.net


Three of the nations largest newspaper and television chains have gained a majority stake in news search engine Topix.net.

The search startup will announce Wednesday that Gannett Co. Inc., Knight Ridder Inc. and the Tribune Co. each have acquired a 25 percent stake in Topix.net.

The investment comes about a year after Topix.net launched its service, which indexes, aggregates and categorizes news from about 10,000 online sources.

Topix.nets founders are keeping the remaining 25 percent share in the company and will continue to manage and operate it as a standalone company, said CEO and co-founder Rich Skrenta.

Financial details of the transaction were not disclosed.

"It was really too good of a deal to pass up—to have their 140 newspapers, TV stations and online assets and their funding behind us," Skrenta said.

The deal with the media companies marks the first major funding for Topix.net, which turned its first profit in December.

With the investment, the company plans to expand its services and technology and grow its nine-person staff, based in Palo Alto, Calif.

Though Topix.net was not actively seeking funding, Knight Ridder executives approached it with an investment proposal following meetings in November about partnering, Skrenta said.

Topix.net has gained attention over the past year through a series of partnerships with search engines and media companies, which are tapping its syndicated news feeds.

Those feeds include news that can be targeted to local ZIP codes.

It has struck deals with America Online Inc., Ask Jeeves Inc., InfoSpace Inc. and Citysearch.

Earlier this year, the New York Times also began paying Topix.net to feature its articles in various categories of the news search service.

The major Web search engines such as Google, Yahoo and MSN also have focused on news search, expanding the way users can aggregate and customize online news.

Not all publishers are welcoming online news aggregation. Click here to read about wire service Agence France Presses lawsuit against Google News.

Topix.net and its three media investors are looking at ways of tapping into each others content and technology.

For example, Topix.net a few months ago began using its own relevancy algorithms with the Google AdSense sponsored links appearing on Topix.net in order to more closely target the ads to its specialized news categories, Skrenta said.

Topix.net could use the same categorization algorithms to help Gannett, Knight Ridder and Tribune better target their advertising content, which ranges from classified ads to real-estate section advertorial, Skrenta said.

The three media conglomerates also are partners in such sites as ShopLocal.com and CareerBuilder.com.

Next Page: No influence on how Topix.net displays news.

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"People want news thats relevant to them—where they live, the business that they are in, the topics they care about," said Jack Williams, Gannetts senior vice president of diversified business and development, in a statement.

"Topix.nets technology will leverage the media assets and broad reach of our three companies in entirely new ways."

But Skrenta stressed that Gannett, Knight Ridder and Tribune will not influence the way that Topix.net aggregates and displays online news and that Topix.net will continue to partner with other media companies.

Topix.net uses computer algorithms, rather than human editors, to determine the placement of news links on its site and the relevancy of search results.

"One of the neat things about Topix is that were a very different news reading model, where were taking in content from all publishers and contextualizing it," Skrenta said. "They have been very clear that they want to keep us editorially independent."

Taken together, Gannett, Knight Ridder and Tribune own more than 140 newspaper Web sites that reach about 30 million unique visitors a month, the companies said.

Gannett, of McLean, Va., is the nations largest newspaper publisher. It operates 101 daily newspapers, including USA Today, along with 21 television stations.

Knight Ridder, of San Jose, Calif., is the second largest newspaper publisher with 31 daily newspapers, including the San Jose Mercury News.

Chicago-based Tribune runs 14 daily newspapers, including the Chicago Tribune and Los Angeles Times, and operates 26 television stations.

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