Congratulations to Rich Skrenta and the rest of the Topix.net team!
Topix.net focuses on fine-grained categorization of news by subject and location. They combined a broad news crawl with a clever, automated, classification system. Topix has hundreds of thousands of categories including narrow categories like nanotechnology and small little towns like Sequim, WA.
While it may be a little surprising to see newspapers making this deal, mainstream newspapers have been struggling mightily to deal with online news. This deal has substantial benefits.
Gannett, Knight-Ridder, and Tribune gain a well-differentiated news aggregator to compete against Yahoo News and Google News. The acquisition also gives them a powerful tool for enhancing their own news sites with related content and customization features using Topix's fine-grained subject categories. Finally, Topix has developed some expertise in targeting advertising to news -- something newspapers desperately need -- and Topix can transfer those skills to its new partners.
Great news, Rich. Congrats again!
Tony Gentile deserves credit for breaking this story on rumors earlier today. Also see the comments from Gary Price, Susan Mernit, John Battelle, Michael Bazeley, and Mike Masnick.
Update: Rich Skrenta (CEO, Topix.net) posts about the investment deal.
Update: There seems to be a fair bit of confusion about the valuation Topix.net received, in part created by Bambi Francisco first reporting only that "the funding was less than $5 million" but then updating her article to say:
- The three newspapers bought 75 percent of the company for a market valuation below $100 million, but north of what venture capitalists valued Friendster, according to someone close to the deal. Friendster ... received a market valuation of $50-plus million.
Update: A year and a half later, Topix.net raises another $15M in funding to add additional fuel its impressive growth. Very cool.