THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, June 8, 1995 TAG: 9506080415
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 98 lines
Landmark Communications Inc. and Knight-Ridder Inc. have formed a joint venture to take their fledgling operations in electronic publishing and other on-line services nationwide.
The two companies are planning to announce the 50-50 venture today. It will be headquartered in Norfolk and operate under the name InfiNet, which Norfolk-based Landmark previously owned outright.
Terms of the deal weren't announced. But InfiNet President David D. Richards said this week that the company's immediate goal is to build an on-line network of 100 newspapers within the next two years.
``We think it will be a very significant opportunity,'' he said. ``It's a growing industry and large pieces of territory are still being staked out.''
The papers will be linked via the Internet, the rapidly growing global web of computer networks. InfiNet sells subscriptions to individuals and businesses seeking access to the Internet. The company has been increasingly building its own on-line content with stories, ads and information services from newspapers and other media partners.
Richards and other InfiNet executives said they believe the partnership with Knight-Ridder, the leader in electronic newspaper publishing, will help the joint venture set on-line standards for the industry.
``We have two newspaper publishing companies who are figuring these things in their own markets, and now we're ready to export that thinking,'' Richards said.
Analysts said InfiNet likely will have a leg up on other on-line competitors like Prodigy and MCI in trying to recruit newspapers because publishers have become increasingly mistrustful of surrendering control of their electronic products.
``That's this year's mantra from newspaper companies,'' said James D. Dougherty, an advertising and publishing analyst for Dean Witter Reynolds Inc. in New York. ``They don't want to be just information providers - providers of information to larger, third-party services in which their content ends up being buried. They want to be publishers.''
InfiNet, being owned by two newspaper chains itself, expects to be able to more easily build trust with publishers, Richards said. And it has designed its network so that any InfiNet subscriber, accessing the Internet from a computer at home or work, will see the local newspaper's electronic greeting first.
The problem with newspapers' on-line ventures is that none is making much or any money, said Edward J. Atorino, senior vice president for Dillon Read & Co. in New York. There are a number of others from such stalwarts as The New York Times and The Wall Street Journal.
``At the moment, it's basically R&D,'' he said. ``Whether or not it's a business or not, we'll know in the next five or so years. . . . But just in case, you've got to establish yourself to be in this business. You don't want to miss what could be your next big opportunity.''
Atorino said InfiNet and other electronic publishing ventures don't signal an impending death for printed newspapers. ``They'll be around for another 50 years, at least,'' he said. ``They may not go away. But I think the electronic delivery of news and information will become a very significant business.''
Together, Landmark and Miami-based Knight-Ridder own about 35 daily papers, which puts InfiNet about one-third of the way toward its goal of 100 on-line papers within two years. Landmark's holdings include The Virginian-Pilot and The Ledger-Star, as well as the Roanoke Times & World-News. Knight-Ridder owns some of the nation's largest papers, including the Philadelphia Inquirer, Miami Herald, Detroit Free Press and San Jose (Calif.) Mercury News.
InfiNet's Richards said his company already has recruited several other papers, including Worrell Enterprises Inc. dailies in Charlottesville, Culpeper and Lynchburg. Those three will join the InfiNet network by mid-July.
He said InfiNet is in talks with other chains that could add more than 50 papers nationwide.
InfiNet will allow any papers that join the network to control the content they put on line and set up various pricing tiers for access to that content. Richards said, however, he is hoping that the newspapers will provide most of the information at no additional charge to InfiNet subscribers, no matter where in the country they happen to be located.
InfiNet will provide customer service, billing, market research and other services. It will actually operate the network and provide the links that will give the newspapers' electronic subscribers access to the Internet. InfiNet and its affiliate papers will share Internet-related revenues, Richards said.
Revenues will come primarily from subscription fees, but may also come from advertisers or for charging for some specialized content.
To ramp up for the anticipated growth, Richards said InfiNet will by year's end likely add 20 to 30 employees to its Norfolk work force, now at about 50. InfiNet will move its headquarters into the former Atlantic Permanent Savings Bank building on Boush Street downtown. But some employees will work in two other downtown buildings.
Landmark involvement in the Internet publishing and access business began in 1993 with the purchase of a 70 percent stake in a small Norfolk startup called Wyvern Technologies Inc. The remaining 30 percent interest in the company, later renamed InfiNet, was purchased by Landmark last month. But co-founders Tom Manos and Richard Corkran, have stayed on as president and vice president, respectively, of a newly formed division called InfiNet Network Services. by CNB