THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, February 15, 1996 TAG: 9602150361
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 83 lines
Gannett Co. Inc., the nation's largest newspaper chain, has joined the rush to the fast-growing global Internet computer network by buying a one-third stake in Norfolk-based InfiNet.
The Arlington-based Gannett announced Wednesday that it will join as a partner with Landmark Communications Inc. and Knight-Ridder Inc. in a push to make InfiNet the nation's leading commercial provider of access to the Internet.
Terms of the deal weren't disclosed.
Norfolk-based Landmark, parent of The Virginian-Pilot, and Miami-based Knight-Ridder, the nation's second-largest newspaper company, have been recruiting Gannett for nearly a year to join their fast-growing venture into electronic information services.
The latest deal will help increase InfiNet's downtown Norfolk work force, now numbering about 180, to as many as 250 people by year's end, company executives said.
The deal bolsters InfiNet's strategy of stringing together a nationwide network of newspapers that sell Internet services in their circulation territories.
InfiNet and the newspapers split revenues from the services, for which consumers pay monthly subscriptions averaging about $25. In return for their fee, Internet wanderers gain access to a mind-boggling array of ever-changing information and entertainment choices - many complete with sound and pictures - offered up by every kind of institution and individual imaginable.
Gannett's move onto this chaotic frontier seems, at first blush, fitting. The company has taken risks before. Its splashy and pioneering national newspaper, USA Today, piled up hundreds of millions of dollars in losses after its startup in 1982 before breaking into the black three years ago.
But on the whole, Gannett is one of the newspaper industry's more pragmatic and bottom-line-oriented chains. So its foray into the potentially wildly profitable Internet is significant - one that could convince other newspaper chains to follow.
``It is flattering that Gannett feels InfiNet can best address the Internet service needs of most of its many newspapers, and is willing to invest in the long-term vision we share,'' said David Richards, InfiNet president.
With Gannett's addition to InfiNet, the three newspaper groups that own the company have a combined daily circulation of more than 10 million. That's about one in every six subscribers of daily papers in the United States.
Meanwhile, a dozen papers owned by other chains and with combined daily circulations of about 1 million already have gone on-line as InfiNet affiliates.
Gannett didn't say which of its 92 daily papers will join the list of papers with Internet services - or when. InfiNet executives said in interviews that they expect dozens of the Gannett papers to go on-line in the next few years, however. The say the total number of papers, including Gannett's, that make up the InfiNet network will grow from 25 to as many as 100 by mid-1996 alone.
Richards declined to say how many subscribers InfiNet has nationwide. But in an interview he said that if InfiNet's current growth rate continues, by the end of the year the company will be among a handful of the nation's largest commercial providers of Internet access services.
In number of subscribers, Richards said he expects InfiNet to this year vault ahead of such current leading independent providers of Internet access as Netcom On-Line Communications Services Inc. But he said the company will remain well behind several big on-line providers like CompuServe Inc. and America Online Inc., which give subscribers to their private networks a back door to the Internet.
When Knight-Ridder joined as a partner last June, InfiNet honed its ``newspaper-centric'' strategy of selling people the services they need to hop onto the Internet for work and play. Up until that time, the Norfolk company also had been pursuing TV stations as local affiliates.
Generally, papers that join InfiNet post electronic versions of their leading local stories each day. Many offer weather information and other features. Some papers, including The Virginian-Pilot, also sell advertising with their electronic versions.
Logging in, some of the papers' Internet-access customers dawdle over this local information. Others quickly bypass it, however, and hop onto the wider world of cyberspace, where literally millions of electronic highways and back alleys await Internet travelers. by CNB