McClatchy Mash-up: What's Ahead for the New KR Digital

By: Jennifer Saba When McClatchy closed the deal on the Knight Ridder acquisition in late June, it not only got 20 papers, but also inherited Knight Ridder Digital (KRD), a wholly owned subsidiary of Knight Ridder. But executives have their work lined up for them in coming months. Perhaps the toughest, and arguably the most important, part of the whole integration process involves McClatchy folding Knight Ridder's Internet operations into its own.

Structurally, the two companies couldn't be more different. McClatchy Interactive, headquartered in Raleigh, N.C., produces the publishing tools, and hosts and manages McClatchy's newspaper sites. From there, it's up to each individual paper to shape the look and feel of the Web site. "We actually put fences out there and say, work within the fences," says Fraser Van Asch, McClatchy Interactive's executive vice president and general manager. "People come back and say they want to work a bit farther out, and we talk about it."

Until recently, KRD was highly centralized. Based in San Jose, Calif., KRD had each paper adhere to a template. Many at the newspapers complained the uniform look was too cookie-cutter, and lacked the flexibility to cater to local idiosyncrasies. Knight Ridder's bigger papers had KRD general managers on site, but they reported back to San Jose.

"Knight Ridder had some compelling reasons for creating a platform across markets," says Rick Thames, editor of The Charlotte Observer, a former KR paper now owned by McClatchy. "I think we are going to see a bit more freedom at each location," he adds, saying that's a healthy thing: "People on the ground here have the best understanding of how to design a Web site in our marketplace."

KRD took the top-down approach because it made it easier to sell national advertising. Plus, the Real Cities network, which welcomed newspapers outside of Knight Ridder, is considered an important part of KRD. "We love Real Cities," Van Asch says. "It's something we really want to expand. It's good for the industry, where a lot of people don't have bandwidth." McClatchy intends to keep Real Cities alive and humming, and has plans to grow the network beyond the 125 newspapers currently on the site.

"Our intention," says Christian Hendricks, vice president of Interactive Media at McClatchy, "is to do what those businesses have done all along, and take the best of both sides and combine them into one company." Former Knight Ridder papers will get to control more of the look and feel of their Web sites. But "It won't be a free-for-all," he says, "because they do have national advertising associated with it. We don't simply want to walk away from the revenue streams associated with it."

First on the list is for McClatchy to work with the 12 former Knight Ridder papers that have been sold to different owners. Hendricks explains they have different contracts with each of the papers for a period of time somewhere in the ballpark of 15 months to keep them on the current platform. "That's an enormous task itself," he says about moving the 12 papers off the KR platform. "I would couch this as the most complex integration in the history of the newspaper interactive space."

Overall, Hendricks is aiming for a 24-month time frame to get everything squared with KRD, which includes other subsidiaries like CareerBuilder (jointly owned by Tribune, Gannett, and Knight Ridder) and Classified Ventures. At press time, Gannett and Tribune, which have first right of refusal over Knight Ridder's one-third stake of CareerBuilder, had not made any decisions.

Ken Doctor, a lead analyst with research firm Outsell (and a former KRD vice president), believes that so far, no newspaper company has really hit on the magic digital formula. "The whole national/local equation over 10 years has been really hard for everyone to get right," he says. "The biggest dilemma is [McClatchy] has to do two things at once. They have got to integrate Knight Ridder sites into one network ... and they have to improve their own national platform. It's like running and dancing at the same time."