By: Staff reports
An IPO May Or May Not Be Next
In an expected move, Knight Ridder joined the ‘dot-com’ craze yesterday. Chairman and CEO Tony Ridder announced the creation of KnightRidder.com, a separate business unit for the San Jose, Calif.-based newspaper company.
Company officials cautioned that the news shouldn’t be viewed as a prelude to an IPO for the new division. ‘All options are open as we go forward,’ said Polk Laffoon, vice president for corporate relations at Knight Ridder. ‘No decision has been made.’
Laffoon said the company realized that new media must be separated into its own business unit with its own reporting structure so that decision making is streamlined. Knight Ridder has over 45 Web sites and a staff of 400-plus. Its Real Cities network is a collection of regional portals being developed in the top 25 markets.
Internally, Tony Ridder has said the company might follow the successful model of Charles Schwab Corp., which has kept its profitable Web unit under the umbrella of the head company.
Once the transition is complete by the end of the first quarter of 2000, KnightRidder.com will draw on the newspapers for news feeds and other information. The Web unit will pay newspapers for that material, Laffoon said.
In addition, Knight Ridder’s Web sites will use the company’s newspapers for promotion. KnightRidder.com plans to soon launch a large advertising campaign to promote itself.
Currently integrated in Knight Ridder’s newspaper operations, the company’s Internet activities generate about $30 million in revenues per year. Knight Ridder will spend about $48 million this year on new media, Laffoon said.
Knight Ridder’s 31 newspapers generate over $3 billion in revenues.
The company follows in the steps of several other newspaper companies that have created separate new media division this year, including The New York Times Co., Tribune Co., and Belo.
(c) Copyright 1999, Editor & Publisher