06-30-08 | Printable Version

Diversifying Portfolios

Cozi, Kaango and Adify Among Names Added to the Mix

Several newspaper companies have expanded their portfolios and offerings in the past year with strategic, non-traditional partnerships and acquisitions. Some deals will help companies leverage and deliver local content in new ways and reach a broader audience. Other deals will diversify companies’ holdings and allow them to capitalize on growing technologies. Below are a few recent transactions.

Cox adds Adify

In April, Cox Enterprises agreed to pay $300 million to purchase the advertising technology company Adify. Adify provides companies with the technology to launch vertical ad networks, groups of sites about specific content that advertisers can access with one buy.

Founded in 2005, Adify has developed vertical ad networks for several top media companies including Time Warner, Reuters, The Washington Post Co., Forbes, The Guardian and Martha Stewart Living Omnimedia.

Adify is a self-service ad network where publishers can negotiate their own ad rates and reject unwanted advertisers. Adify typically takes about 20% of the revenues from the relationships.

With this acquisition Cox will be competing with Google’s Doubleclick division.

Gannett gets Cozi

In June, Gannett Co. purchased a minority stake in Cozi, a free online service that helps families manage schedules and stay in touch (www.cozi.com). Cozi’s organization tools include a central family calendar, customized shopping and to-do lists, a family blog and messaging tools. The service can be accessed from computers or mobile phones.

Gannett and Cozi will collaborate on product innovations that will deliver Gannett’s rich local content and information to users. Gannett will market the Cozi brand throughout its media network.

Cozi launched in the fall of 2006 and now has more than 600,000 family members. The company estimates 2,000 new members are added each day.

Gannett will receive a seat on the company’s board of directors. The financial terms of the investment were not disclosed.

quadrantONE Launches

Launched in February, quadrantONE is a new online sales organization designed to target premium advertisers that want to reach high-quality national audiences. Investors in the network include Tribune, Gannett, Hearst Corp. and The New York Times Co.

The new company will allow advertisers to reach online audiences in 27 of the top 30 markets with a single buy, allowing newspapers to compete with national online portals. Advertisers will also be able to customize their campaigns to reach the exact audience they want to target.

The network will cover the nation’s top markets including New York, Los Angeles, Chicago, San Francisco, Boston, Atlanta, Houston, Phoenix, Detroit, Dallas, Philadelphia, Washington, D.C., Baltimore, Cincinnati, Denver, Minneapolis/St. Paul, Orlando, San Antonio, Sarasota, Fort Lauderdale, San Jose and Albany.

quadrantONE is open to any affiliate companies that wish to participate.

Kaango Jumps

In November 2007 MediaNews Group and Hearst acquired an 80% ownership stake in Kaango, an online classifieds and software firm, for approximately $20 million. Lee Enterprises agreed to acquire 10% of Kaango from Hearst and MediaNews.

Kaango was already providing MediaNews and Hearst newspapers with their online classified software platform. Other clients include Scripps, Media General, Freedom, and Journal Register.

The acquisition is intended to mark the beginning of an initiative to create an industry-wide community-based classifieds consortium. The consortium will serve the websites of its network participants while also rolling content and ad listings into a national marketplace portal, Kaango.com.

Kaango.com will allow the companies to compete directly with Craigslist and eBay’s Kijiji.

Zillow Talk

This past November also saw the announcement that 11 newspaper publishing companies would be partnering with Zillow.com, a leading real estate web site.

The strategic partnership, representing 282 newspapers nationwide, will allow local advertisers to place their for-sale listings and open house information on Zillow's online platform. The newspapers will also be able to enhance their web sites with Zillow’s rich real estate content and information on homes, neighborhoods and value trends.

Four million people visit Zillow every month, with 70 % buying or selling a home now, or planning to buy or sell a home in the next one to two years.

The major newspaper companies included so far in the consortium are Hearst; Journal Register; Lee Enterprises; Media General; MediaNews Group; Morris Communications; Paddock Publications; Pittsburgh Tribune-Review; Scripps Co.; Times-Shamrock Communications and The Day Publishing Co.