Wednesday, March 23, 2005

Why Topix was top pick for newsies


The acquisition of control in Topix.Net by three major newspaper companies could be the first step in an effort by the publishers to build a search colossus to compete with Google, Yahoo, Microsoft and the rest of usual online suspects.

Gannett, Knight-Ridder and Tribune each bought 25% of Topix, which "continuously monitors breaking news from over 10,000 online sources [twice as many as Google News] and categorizes daily news content into over 300,000 topics, 24 hours a day."

(UPDATE: In the original post, we reported that MarketWatch said the three publishers invested the paltry sum of "less than" $5 million, but visitors to our site think the value is considerably larger. We are askng Topix to clarify.)

Topix neatly slices and dices the news into categories and -- a key capability for newspapers -- will tailor the news report directly to your Zip Code. Topix says it also has developed systems to target keywords more closely than Google to the content of a page.

For now, each of the newspapers will link to Topix on its web sites and Topix, presumably, will put a little extra English on listings from partner newspapers when it assembles its news summaries. In the fullness of time, Topix and the publishers will collaborate on ad sales, filling what everyone hopes will be an ever-growing inventory of page views.

The really intriguing possibility, however, is that Topix could develop a full-service search engine to compete with Google, et al. Topix already has done most of the heavy lifting required to scrape and index the web, so it would not be difficult to add the necessary front-end components.

With a prominent position on more than 140 newspaper web sites with nearly 30 million unique visitors monthly, the Topix search business could scale rapidly and inexpensively. Because Topix would know the location of the originating web site (right down to the Zip Code of the user), the search results -- and the accompanying ads -- would be tailored to the all-important dimension of proximity.

As ad volume builds, the publishers and Topix even could create their own keyword-ad network to compete with Google and Yahoo, just as Microsoft recently did.

Gannett, Knight-Ridder and Tribune previously teamed up to acquire controlling interests in Friendster, Shop Local and Career Builder. Add that traffic to the core newspaper network, and you have conceivably the most potent online initiative yet for the Fourth Estate.

The trick will be getting the publishers to play well together, a process that in the past has been similar to herding cats. But this group of publishers is small enough -- and scared enough -- that this just might work.


Blogger Greg Linden said...

Hi, Alan. A minor correction. It appears that was valued at between $50M-100M in that deal, so the total investment was much more than $5M. See the Marketwatch article you link to (which may have been changed since you last looked at it) for the details.

12:05 PM  

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