News Groups Take Stake in Topix

  |  March 23, 2005   |  Comments

The deal has implications for local interactive ad sales at Gannett, Knight-Ridder, and Tribune Co.

Local news aggregator Topix.net has sold a three-quarter stake in its business to three top newspaper publishers. It's a deal that has implications for the interactive ad sales operations of the publishing companies, as well as that of Topix.net.

Gannett, Knight-Ridder, and Tribune Co. have each acquired a 25 percent stake in Topix.net, with Topix.net founders retaining a 25 percent stake. Collectively, the three media companies operate more than 140 newspaper and local TV station Web sites with nearly 30 million unique monthly visitors. Financial terms of the transaction were not disclosed.

"We were at a place in our growth where we could have gone for traditional VC funding, but then we would have turned around and gone to Tribune, Gannett and Knight-Ridder to cut deals," said Mike Markson, Topix.net's VP of business development. "This is an opportunity for us to leverage those assets to take this to the next level."

Topix.net aggregates news by category and city. It displays contextual ads from Google's AdSense program, to which it first applies its own targeting technology. It also offers its own content-targeted text and graphical ads. Its self-service text ads are sold on a fixed rate per page basis. Custom advertising and featured content placements are sold on CPM rates that vary by category.

While the details of the relationship between the media companies and Topix.net will pan out have not yet been determined, Markson said some possibilities include the newspapers selling Topix.net ads via their established local sales forces, and integrating contextually relevant links to Topix.net from the media companies' news pages. Another long-range possibility is for the newspaper sites to utilize Topix.net's technologies to better target ads on their own sites.

The same media companies have jointly invested in local content verticals Careerbuilder.com, ShopLocal.com, Cars.com, Apartments.com and Homescape.com. Topix.net already offers news content from the newspaper sites, and plans to integrate this kind of vertical content into its site as soon as possible.

Topix will look for ways to integrate some of the content from those ventures into its site in a contextual way, such as adding nursing jobs from Careerbuilder to its nursing industry news page. Adding the content from the newspapers' classifieds themselves is not in Topix.net's immediate plans, according to Markson.

"Topix.net's technology will leverage the media assets and broad reach of our three companies in entirely new ways," Jack Williams, senior VP of diversified business and development at Gannett, said in a statement. "We are extremely pleased to partner with Topix.net to grow and develop its service and help audiences find the news they want online."

Markson said Topix.net, which launched just a year ago, will continue to operate as an editorially independent, stand-alone company managed by Topix.net's executive team. Topix.net will use the funding to expand its development staff and operational infrastructure.

Topix.net has syndication deals with AskJeeves, Citysearch and America Online, among others, and plans to continue making more in coming months.

"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," said Greg Sterling, director of Kelsey Group's interactive local media program. "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."

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ABOUT THE AUTHOR

Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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