Major Newspaper Pubs Acquire Majority of Topix.net

In another example of traditional media buying digital companies, Gannett, Knight-Ridder, and Tribune Co. yesterday announced their acquisition of a 75 percent ownership stake in local news aggregator Topix.net. The companies declined to discuss the cost or specific terms, other than to state that each will own a 25 percent stake in Topix.net. The deal closed last week.

Since its official launch a year ago, Topix.net has continuously monitored over 10,000 news, media, and government sites around the Web, organizing links to articles in more than 300,000 subject areas.

A Knight-Ridder spokeswoman described the move as a means to broaden the publisher's distribution channels. "The real value for Knight-Ridder is in the technology," she said, adding that it would assist the company to "better distribute both news content and advertising."

From Dow Jones & Company's acquisition of MarketWatch in November to The New York Times Company's purchase of About.com, announced last month, traditional news publishers are continuing to encroach on the interactive space and its trove of ad dollars. Topix.net is ad-funded, with a proprietary classification on top of Google's AdSense program, which allows for ad targeting.

Topix.net already tracks sites operated by Gannett, Knight-Ridder, and Tribune, but the new relationship will bring the company closer to the publishers' online advertisers, allowing it to expand its services and technology thanks to the added content and funds provided by its new investors.

"We'll be able to reach more readers--those publishers have 30 million unique visitors a month, altogether--and they will benefit from our highly localized, contextual advertising technology," Mike Markson, vice president of business development at Topix.net, said.

Markson estimated that Topix.net's click-through rates have tripled since it launched last year, in large part because of its technology that allows Topix.net to be just as relevant locally as nationally.

David Curle, an Outsell Inc. analyst, depicted the collective acquisition as an attempt by the publishers to regain control over their content. "Publishers don't mind the traffic that aggregators bring to their own sites, but they resent the loss of control over their readers, and the way in which they experience publishers' content and advertising," said Curle.

Topix.net, with its remaining 25 percent share, will continue to run the site from its home offices in Palo Alto, Calif.

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