Gannett Acquires All of ShopLocal

  |  July 8, 2008   |  Comments

UPDATED: Gannett bought out the ownership stakes of McClatchy and Tribune in separate transactions.

Gannett has acquired all of ShopLocal, the online shopping circular provider previously owned by a triumvirate of newspaper publishers. Gannett, which also owns PointRoll, bought out the ownership stakes of McClatchy and Tribune in separate transactions.

With the move, ShopLocal will work more closely with PointRoll, a rich media provider acquired by Gannett in 2005, to enhance products like PointRoll's PaperBoy online circular ad format. "It's an opportunity for us at PointRoll, and more importantly at Gannett," said Chris Saridakis, SVP and chief digital officer at Gannett. "It creates value for retail clients."

Saridakis said ShopLocal partners include 29 of the 30 top retailers in the circular space, including Target, Lowes, CVS, and Wallgreens. Uptake of ShopLocal's database, and the PaperBoy unit, "is one of the reasons we wanted the 100 percent acquisition," Saridakis said.

The transaction was likely motivated in part by financial challenges faced by Gannett's rivals, according to Peter Krasilovsky, VP and program director of marketplaces at the Kelsey Group.

"The biggest thing probably is that Tribune and McClatchy are looking for money, and Gannett was in the position to buy them out," he said.

Krasilovsky first posted about the prospective acquisition prior to official word from Gannett or other parties on the Kelsey Group's blog.

Prior to the acquisition, Tribune owned 42.5 percent and McClatchy owned 15 percent of ShopLocal. Gannett disclosed it paid Tribune $22.3 million, and McClatchy expects to earn $13.5 million in the deal, after taxes. ShopLocal was created in 2004 by CrossMedia Services, a company owned jointly by Gannet, Knight Ridder and Tribune at the time. McClatchy acquired KnightRidder in 2006. Gannett continues to work with both newspaper organizations on additional ventures such as CareerBuilder, Classified Ventures, and Topix.net.

Full ownership of ShopLocal, Krasilovsky speculates, could compliment Gannett's ownership of PointRoll, which it acquired in 2005. ShopLocal's localized SmartMedia display ads are served through PointRoll.

"PointRoll and ShopLocal are already working on joint products and sales," said Saridakis. "Retailers over the summer are already working on back-to-school and holiday, and the timing couldn't be better."

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