GANNETT INVESTS IN ZAPMEDIA

By: Staff reports GANNETT INVESTS IN ZAPMEDIA

Newspaper Giant Makes Interactive TV Move



America's largest newspaper company, Gannett Co. Inc., is making
a play in interactive television. The parent company of USA Today
invested $270 million Tuesday in ZapMedia.com of Atlanta.



ZapMedia is the creator of a new Internet appliance, ZapStation,
designed to be a home information and entertainment system. The
product is scheduled to debut this fall.



The ZapStation device connects to the Internet through a broadband
connection, and plays CDs, DVDs, and MP3s. The system is operated
by remote control and a wireless keyboard. The device connects with
the owner's existing TVs, stereo systems, and PCs, and can store
hours of audio and video.



Gannett said it will provide $250 million in advertising over the
next 10 years, $19 million in cash, and other revenue-sharing
opportunities. In exchange, Gannett becomes an equity investor in
ZapMedia, which will also feature USAToday.com as its national news
source. Local news from Gannett's 73 daily newspapers and 22 TV
stations will be included.



ZapMedia hasn't yet determined the price of the set-top boxes or
subscriber fees for the service. The company said it will generate
revenue from subscriber fees, advertising, and licensing deals for
its software.