Knight Ridder Buys Free 'Palo Alto Daily News' and 4 Other Tabs

By: Jennifer Saba Knight Ridder announced late yesterday that it has acquired the company that publishes the Palo Alto Daily News, a free, tabloid-sized paper distributed in the upscale city located between San Francisco and San Jose, Calif.

The company, Priceless LLC newspapers, founded by Dave Price, Jim Pavelich, and David Danforth (who left the company), publishes other free daily tabloids in the area, in San Mateo, Redwood City, Burlingame, and Los Gatos. Terms of the transaction were not disclosed but Dave Price told E&P that his company is profitable.

"Our media strategy is to give customers what they want, in print and online," said Tony Ridder, Knight Ridder CEO, in a statement. "In today's world, customers want many kinds of publications, as evidenced by the great proliferation of free-distribution newspapers, shoppers, lifestyle magazine, and publications in autos, real estate, and employment. Increasingly, Knight Ridder is in all of those businesses -- and will become more so in the future."

Priceless LLC was founded in 1995, when the company launched its seven-day paper in Palo Alto with a distribution of 3,000 copies. Despite initial speculation that the free paper would flounder, the company grew to include other cities in the area. It now distributes a total of roughly 59,000 papers in news racks, stores, and businesses. The paper is delivered to about 30,000 Palo Alto homes on Sundays.

The success of the company can be attributed to the fact that the papers fill a void in the area. Prior to the publications of these free dailies, area residents did not have access to a daily paper other than the San Jose Mercury News, owned by Knight Ridder, and the San Francisco Chronicle. Though located near these major markets, each city is a unique community.

Editorial coverage aside, Price said that the competition among his papers and the Chronicle and Mercury News is negligible. Price explained that his papers serve advertisers that can't afford the bigger papers.

"The major metros are seeking national and major regional advertisers. We are going after a smaller advertiser," Price said, adding that the papers do business with mostly local shops, services, and restaurants. "We're sort of ships that pass in the dark. We don't see them and they don't see us."

Price and Pavelich will continue to manage and operate the five dailies, according to a statement. They will report to Hilary Schneider, senior vice president/operations for Knight Ridder.


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