SKIPPING GOOD INDUSTRY NEWS, FOCUS IS ON MOVE

An industry leader signals that web presses may give way to web sites

Big news in the newspaper business last week and the phone has been ringing off the hook.

Earnings? As you'll see inside, the numbers are good – very good. But, no, that wasn't the news.

Circulation? Also inside, the latest FAS-FAX numbers show some gains (whew), as well as some losses (oh, well). Though interesting, nobody has called me about the circulation numbers.

No, the big news in the newspaper business is that Knight Ridder is moving.

Somehow, I think if Gannett or Thomson decided to move, the world wouldn't care. But Knight Ridder moving to Silicon Valley? The news almost flooded my voice mail.

The Miami-based company announced it would be reorganizing its corporate staff and relocating between 50 and 60 jobs to Northern California in 1999. The news came as almost an after-thought, following its annual meeting April 28.

Company chief P. Anthony Ridder said in a press release the reason Knight Ridder was moving was that, "as a news and information company, we want to stay very close to developments related to this new medium. Knight Ridder people simply must be immersed in the kind of futuristic and entrepreneurial thinking found in Silicon Valley."

The questions came fast and furious: Were there other motives? Was Knight Ridder going to monopolize newspapers in Northern California? Was this an attempt to get "in the face" of Northern California-based competitors such as Chronicle Publishing Co. of San Francisco or McClatchy Co. of Sacramento?

The answers included the notion that Ridder previously had lived in Northern California while with the San Jose Mercury News, so maybe a fondness for the region played a part. Further, the likelihood of Knight Ridder acquiring MediaNews' Alameda Newspaper Group was slim, what with head-to-head competition in two markets. And, it seems to me, that neither Ridder nor the company could care less about where the headquarters of its competitors may lie.

No, I think that this is one that needs to be taken at face value: Knight Ridder wants some of the Silicon Valley go-go attitude to rub off on its executive staff.

One San Francisco columnist wrote, "Of course, the whole point of the Internet is that you can sign on to it from anywhere, even Miami, but never mind that." It was the columnist who was missing the point: You can't "sign on to" a new way of thinking.

No, moving corporate staff to Silicon Valley will give the company an edge that its more stodgy competitors will lack.

Why all the concern about Knight Ridder? Interestingly, if the company still owned the old Dialog on-line information business, I think this move would have been less of an issue (the Dialog business, is, in fact, in Silicon Valley). But since the company has reconstituted itself in recent months as an all-newspaper business, I think the concern stems from the notion that – gasp – information and technology are going to play a greater and greater role in the business of newspapers.

There is still a romantic notion – especially in newsrooms – that newspapering is a manufacturing business. Lots of big iron and big trucks. And though there are still presses and cargo, over the course of the next decade that is going to change.

The newspaper business has become a business of information. We provide our reader-customers with not only news, weather and sports, but also a good format for information to aid their purchasing decisions. We provide our advertiser-customers with access to high-quality readers. That we are currently addressing those customers via newsprint and ink is only a matter of timing.

No, the big news in the newspaper business last week wasn't earnings or circulation, or even the fact that Knight Ridder is moving. The big news is that our future is no longer web presses but web sites. Knight Ridder proved that by saying it was moving to Silicon Valley. The rest of the industry shuddered because it doesn't want to believe.

– David M. Cole

Inside ...

• Newsprint costs aside, first quarter earnings are most pleasing
• Journal Register, Knight Ridder and Lee notch record results
• Circulation numbers show a disturbing decline in Sunday sales
• If you think making sausage is nasty, try setting a standard
• Knight Ridder has many plans to make before leaving Miami
• Anybody got a Galactic Database?
• Persons

From NEWSINC., May 11, 1998, Copyright © 1998, The Cole Group. All Rights Reserved.