Knight-Ridder Inc

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KNIGHT-RIDDER INC.

Knight-Ridder is the third-largest U.S. newspaper publisher with sales of $3.2 billion, roughly 22,000 employees, daily circulation rates of 9 million, and Sunday circulation rates of 13 million. Behind both Gannett and Tribune Co. in print operations, the firm is considered a leader in online newspaper publishing. However, despite the success of the firm's Internet operations, the North American economic slowdown in 2000 and 2001 prompted Knight-Ridder to lay off roughly 16 percent of its Internet-related employees.

HISTORY OF RIDDER PUBLICATIONS

Knight-Ridder Inc. dates back to 1892, when Herman Ridder bought the Staats-Zeitung, a newspaper written for the German residents of New York City. Ridder expanded in 1926, acquiring the Journal of Commerce. In 1942, Ridder Publications incorporated in Delaware. Acquisitions that decade included Post Tribune in Gary, Indiana, and various newspapers in Washington and California. The firm also diversified into radio and television for the first time with the purchase of Minneapolis, Minnesota-based WCCO. In 1969, Ridder conducted its initial public offering and bought the Daily Camera, a newspaper published in Boulder, Colorado. Four years later, Ridder acquired Beacon Publishing Co. and the Wichita Eagle. Profits reached $14 million on sales of $166 million.

HISTORY OF KNIGHT NEWSPAPERS

In 1903, Charles Landon Knight exited the legal profession and bought the Akron Beacon Journal. By the late 1930s, Knight's sons had taken over the family business. They paid $2.25 million for the Miami Herald in 1937. The brothers also bought the competing Miami Tribune to gain access to its new printing press, as well as additional equipment and facilities. Eventually, the Knights stopped publishing the Miami Tribune. . In 1939, they enhanced the Miami Herald with additional photographs, comic strips, and new columns.

By 1940, the Knight brothers had adopted the Knight Newspapers moniker. Accomplishments early in the decade included the acquisition of the Detroit Free Press, the $3 million purchase of the Chicago Daily News, and incorporation in Ohio. In 1946, Miami Herald editor Lee Hills launched the Clipper Edition, a consolidated version of the newspaper that was distributed to several Latin American countries. A fire destroyed the Miami newsprint warehouse in 1949. The following year, the Miami Herald was awarded its first Pulitzer Prize for uncovering government corruption in Southern Florida. Knight Newspapers added the Charlotte Observer to its lineup in 1956. Three years later, it purchased rival The Charlotte News. The Chicago Daily News was divested to Marshall Field for $17 million.

CEO James Knight brought Alvah H. Chapman Jr. on board as his assistant in 1960. It was Chapman who first spearheaded the use of computers for tasks ranging from administration and advertising to layout, typesetting, and production. In 1965, the Tallahassee Democrat was acquired. That purchase was followed by four more in 1969: the The Philadelphia News, the Philadelphia Inquirer, the Macon Telegraph, and the Macon News. The strategy of owning more than one newspaper in a given market worked to eradicate competition for Knight. By the end of the decade, daily circulation had exceeded 2 million, and the company had conducted its initial public offering. Sales in the early 1970s reached $350 million, with profits of roughly $23 million. Knight added another five daily newspapers to its holdings, including two in Columbus, Georgia, two in Lexington, Kentucky, and one in Florida.

OPERATING AS KNIGHT-RIDDER INC.

In November of 1974, Knight Newspapers merged with Ridder Publications to form Knight-Ridder Newspapers, the largest newspaper publisher in the United States with 35 papers in 25 cities and a total daily circulation of 3.8 million and a Sunday circulation of 4.2 million. To receive Federal Communications Commission approval for the merger, Ridder had agreed to sell off its radio and television operations. In 1976, Knight-Ridder Newspapers changed its name to Knight-Ridder Inc. Two years later, the firm purchased VHF stations in Michigan, New York, and Rhode Island. Acquisitions in 1979 included Adams Inc., Fisher Publishing Inc., and Nittany Printing and Publishing Co.

Knight-Ridder diversified into cable television in 1981 via a joint venture with Denver, Colorado-based Tele-Communications Inc. The firm also bought a television station in Norfolk, Virginia. A pioneer in making information available online, Knight-Ridder launched an electronic library retrieval system, called VU/TEXT, in 1982. The following year, Knight-Ridder created a business information services division; acquired WNGE-TV in Nashville, Tennessee; and created Viewdata Corp. to offer news and financial services on home computers. In 1985, the online Knight-Ridder Graphics Network was put in place to serve Knight-Ridder newspapers. The firm paid $311 million for the six newspapers owned by Columbia, South Carolina-based State Record Co. in 1986. That year, the Knight-Ridder Graphics Network began selling its service to competing papers for $50 to $300 a month, depending on circulation rates, and the Viewdata unit was shuttered due to minimal demand. Knight-Ridder paid $353 million for Lockheed Corp.'s Dialog Information Services in 1988. The firm found that its Business Information Services division was growing at threefold the rate of newspaper operations, although newspapers still accounted for nearly 90 percent of sales. By the end of the decade, the company had divested its television broadcasting arm.

INCREASED FOCUS ON ONLINE TECHNOLOGY

In 1991, Knight-Ridder and Tribune Co. formed a joint venture to electronically deliver business news to personal computer users. The firm's Dialog unit unveiled technology that allowed users to purchase a license while online and avoid copyright law infringement. Knight-Ridder published The San Jose Mercury News on America Online in May of 1993, marking the debut of the first newspaper published in its entirety online. A wide-area network (WAN), put in place by MCI Telecommunications Corp. in 1994, allowed Knight-Ridder to link all of its offices via email and also to centralize its human resources operations. Economist Group bought the Journal of Commerce for $115 million in 1995. That year, Knight-Ridder acquired a stake in an Internet-based newspaper service known as InfiNet; published the The San Jose Mercury News on the World Wide Web; and joined forces with four other firms to acquire an 11-percent stake in Netscape Communications Corp. Other purchases included Carl Corp., Uncover Co., and Lesher Communications. Knight-Ridder sold its cable holdings back to TeleCommunications Inc. in 1996. It also became the first leading newspaper publisher to make all of its newspapers available online.

After deciding in 1997 to refocus on its newspaper operations, both print and online, the firm paid $1.65 billion to Walt Disney Co.'s ABC for four newspapers. That year, Knight-Ridder also replaced its WAN with a World Wide Web-based intranet, which it used to streamline procurement procedures. A major online advertising campaign began in January of 1998, when Knight-Ridder began developing its Real Cities series of regional information Web sites. By that time the company was already considered a major contender in the online classified advertising market. Knight-Ridder also eliminated the hyphen from its official name and moved headquarters from Miami, Florida, to San Jose, California. In November of 1999, Knight-Ridder folded the Internet-based operations of its daily newspapers into a new unit, dubbed KnightRidder.com.

In 2000, Yahoo! contracted Knight-Ridder to provide local and regional news on its My Yahoo! customized Web pages. To distance itself from the dot-com fallout, the firm changed the name of its KnightRidder.com unit to Knight-Ridder Digital in 2001. Cost cutting measures, including layoffs, continued as Knight-Ridder strove to improve its earnings despite the economic downturn in North America.