THE COLE PAPERS, Examples, May 2000

Examples of how newspapers now organize new media

Whether organized inside or outside, many traditional publishing companies have expanded their on-line presence over the last few years. Witness:

Advance Internet Inc.: A subsidiary of Advance Publications, the private media giant owned by brothers Donald and Samuel "Si" Newhouse, Advance includes among its properties the Plain Dealer of Cleveland, The Oregonian of Portland, Ore., and The Times-Picayune of New Orleans, as well as Conde Nast magazines. The company also has interests in cable television, book publishing, several technology companies and business weeklies. Recently, Advance acquired Wired magazine and sold the Random House book-publishing business.

Advance recently purchased an equity interest in New York-based Real Media, which will represent the company for national ad sales. With many sites (and more planned) Advance could deliver large numbers of readers and charge a high premium for advertising.

Its web sites include Parade.com, Newhousenews.com, religionnews.com, cartoonbank.com, mardigras.com, rainorshine.com, vogue.com, epicurious.com, concierge.com, as well as its local sites: nj.com (New Jersey), al.com (Alabama), mlive.com (Michigan), cleveland.com, oregonlive.com, and Nola.com (New Orleans), silive.com (Staten Island), syracuse.com and masslive.com.

Belo Interactive Inc.: In December, Belo announced its plan to distribute news from the media properties of parent Belo Corp. through pagers, telephones, mobile phones, fax machines, e-mail and the Internet. A revenue-sharing alliance with Strategy.com enables Belo to enhance the services of its various web sites and to potentially derive revenue from advertising, customer charges and e-commerce transaction fees. Belo owns the Dallas Morning News, the Providence (R.I.) Journal and six other daily newspapers, Dallas' Wfaa-TV (Channel 8) and 15 additional TV stations, regional cable news networks and various interactive assets.

Belo's interactive group reported $6.5 million in revenues in 1999, compared with $3.2 million in 1998.

(Conflict-of-interest note: A significant number of Cole Group consultants -- including the editor and publisher of this newsletter -- are providing contract services to Belo Interactive. Christopher J. Feola, a correspondent for this newsletter, is Belo Interactive's chief technologist.)

CIMedia: Cox Interactive Media (www.cimedia.com), founded in 1996, is partnered with AccessAtlanta.com -- the highest rated local site in the country, reaching an average of 22.8 percent of local Internet users per month during the most recent quarter. Like other newspaper-cum-Internet companies, CIMedia has built a nationwide network of web sites -- it has 55 sites, 21 of which are in the top 50 markets, each providing local news and advertising to the community.

In March, CIMedia, a subsidiary of Cox Enterprises, Inc., acquired a 10 percent ownership stake in artificial intelligence developer Enkia Corp. -- an Atlanta-based spinoff from the Georgia Institute of Technology, and a member company of the Advanced Technology Development Center, which helps early-stage advanced technology companies accelerate growth.

Cox did not respond to requests for an interview.

KnightRidder.com: Among the most recent to make the move to an "outside the newspaper" model the start of KnightRidder.com was announced by Knight Ridder President Tony Ridder last November. KnightRidder.com President Dan Finnigan expects the company to have more than $50 million in revenue this year.

The new company will manage and control all of Knight Ridder's on-line efforts, which include newspaper-operated web sites, the activities of Knight Ridder New Media in San Jose, CareerPath.com and Classified Ventures. The company will continue to be part of the Real Cities network, which includes regional hubs such as BayArea.com, Miami.com, Broward.com, and TwinCities.com, as well as a national home page, RealCities.com. Revenue from the Real Cities network is expected to increase by about 70 percent, or $30 million this year.

The Real Cities network includes partnerships with Belo of Dallas and Central Newspapers Inc. of Phoenix and E.W. Scripps of Cincinnati, and expects to have partnerships and affiliations in the top 25 markets within the year. Real Cities' regional portals offer local and regional directories of community resources and businesses, free e-mail, community publishing and search capability. Anticipated growth this year is in the direction of local databases and events.

The New York Times Co.: The Times Co. announced last May that it had separated its Internet holdings into a separate entity, Times Co. Digital, which consists of roughly 50 sites including the New York Times on the Web, boston.com and New York Today, as well as web sites from its regional newspapers, magazines and broadcast holdings.

Because the company has filed a registration statement with the Securities and Exchange Commission to create a new class of stock intended to track the performance of New York Times Digital, the SEC regulations governing the quiet period prohibited the company from responding to requests for comment.

However, the intent, as announced by Times Co. chair Arthur Sulzberger Jr. last May, is to allow the company's Internet holdings to grow independent of its traditional media resources. "Because the Internet is dramatically changing the way people obtain news and information, it is essential that we continue to be a leader in cyberspace, he said, in an article published by InternetNews.com.

"This step significantly advances our ability to build a high-quality, high-value Internet presence and to respond even more quickly to the fast-moving Web marketplace. By aggregating our portfolio of Internet assets into one business unit, we will sharpen our strategic focus and gain the flexibility to bring our digital future to scale," he continued.

-- L.C.C.

Examples of how newspapers now organize new media

See also Inside or outside: for papers, that's the new media question

From THE COLE PAPERS, May 2000, Copyright © 2000, All Rights Reserved.