Newspaper Partners Buy Majority Stake in Topix

Topix.net, a news search/aggregation site, has announced a majority investment from The Tribune Co., Knight Ridder Digital and Gannett Co. These are the major companies behind Classified Ventures and sites like CareerBuilder and ShopLocal, among other online verticals.

Under the terms of the deal — the money was not disclosed — each newspaper will own a 25 percent stake in the company. Collectively the three publishers will own 75 percent of Topix, with the existing management and shareholders retaining 25 percent. Topix will remain an independently run entity.

Mike Markson, VP of business development, says that everyone at Topix is very pleased with the investment for several reasons. €œFirst it gives us working capital and the ability to add resources and some folks.€ He also said it opens up many new opportunities for Topix to work collaboratively with local newspapers.

Markson said that it has always been Topix€™s intention to work with traditional newspaper publishers and speculated about several ways in which the newspapers might work with Topix. Topix already has syndication deals with AskJeeves, Citysearch and AOL, among others, with more on the way.

What differentiates Topix from other news aggregators is the availability of local news, which has made it an attractive partner for destination sites and advertisers trying to reach local consumers. (Yahoo! news also has local feeds.)

Markson added that €œTopix will be able to integrate [the partners'] vertical site listings into contextually relevant pages€ on Topix. He also suggested several ways that the newspapers could be featured on the Topix site. The New York Times has a €œfeatured placement€ deal with Topix.

And like Google news, Topix drives considerable traffic to local newspaper sites.

At a time when newspapers are trying to figure out their online strategies and how to compete with an increasingly crowded field of players in the local online arena, Topix may represent a very strategic investment.

In the latest round of Kelsey Group-ConStat consumer research €" a telephone survey of 500 consumers €" the Internet had caught up with local newspapers (each at 70 percent) as a medium used to find information about local products and services.

On a panel at the recent NAA conference, I spoke about the possibility of newspapers coming together in a kind of mega-news portal (a la SBC and BellSouth with YellowPages.com) to drive traffic and create a new, Internet-friendly brand. While this is not exactly that strategy, it's quite close.

€œThis will help take us to the next level,€ said Markson. €œThese guys have smart money and whole bunch of marketing power.€

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