Silicon Insider: As Newspapers Die, Is MySpace Next?

March 16, 2006 — -- It's got to be pretty depressing when even your country cousin doesn't want you in the family anymore.

The big news this week in the so-called dinosaur media was the announcement that hapless and struggling Knight-Ridder has finally found a buyer for its stable of newspapers. The good news for KR shareholders (though apparently not for the stock market) is that the deal is for $4.5 billion in cash and stock.

The bad news, at least for old Knight-Ridder types, is that the buyer is the McClatchy Co. In the cosmos of California newspaper publishing families, it has always been the Chandlers (Los Angeles Times), the de Youngs (San Francisco Chronicle) and Ridders (San Jose Mercury-News), with the McClatchys (Sacramento Bee, Fresno Bee) as the bumpkin relations from the Central Valley.

Adding insult to acquisition, the McClatchys immediately turned around and announced that of the 32 KR newspapers it was acquiring, a dozen would be dumped immediately back on the market -- including such crown jewels of the Knight-Ridder family as the Philadelphia Inquirer and the San Jose Mercury News.

On the local news that night, a veteran sports columnist, and a contemporary of mine at the paper in the good old days, put on a brave face and said that no doubt there was a buyer out there that would love to own such a great newspaper with such a long tradition.

Perhaps.

It was just a year ago that I predicted -- to considerable consternation and censure from the press -- that most major newspapers would be dead or dying by the end of this decade. Apparently, I was being conservative.

As I look around California, for example, I see the San Francisco Chronicle turning into the Daily Worker for baby boomers, the Los Angeles Times selecting stories based on political considerations, and now, the only real newspaper of any size left, the Mercury News, apparently orphaned. Meanwhile, McClatchy's strategy appears to be that of snatching up small-town papers, the last redoubt of daily print journalism. But that is just buying time before Yahoo and Google start putting local Little League box scores online.

As it happens, while all this was going on, I heard from an old friend, and one of the best business editors around, Dan Beucke. Dan worked with me at the Merc News and is now an editor at Business Week.

Needless to say, the conversation eventually came around to our old employer. Have I heard, he asked, of any Silicon Valley tycoons who might want to buy the Mercury News as a vanity project? After all, he reminded me, the paper is still very profitable. Why wouldn't someone see the value in balancing their growth-stock portfolio and, in the process, gaining their own editorial soapbox?