Newspaper publishers form Web ad venture
EmptyDENVER -- MediaNews Group Inc. and Hearst Corp. said Friday they have purchased an 80% stake in an online classified ad software provider for $20 million and will operate it through the newly formed Kaango Ventures LLC.
MediaNews and Hearst also said they sold a 10% interest in the new company to Lee Enterprises Inc.
MediaNews, Hearst and Lee will use Kaango for an initiative aimed at creating an industrywide consortium featuring community-based classified advertising.
Founded in 2006, Denver-based Kaango LLC is a software provider for online classified ad markets and operates an Internet site for radio-control hobbyists.
Kaango founders Michael Kranitz and Marc Vigod will retain a 20% ownership and will remain with the company. Kaango Ventures LLC expects to acquire the remaining interest within five years.
Denver-based MediaNews is the nation's fourth-largest newspaper company with 61 daily newspapers, including The Denver Post, San Jose Mercury News and The Detroit News.
Hearst's diversified media interests include the Houston Chronicle and the San Francisco Chronicle, magazines, broadcasting and entertainment.
Lee Enterprises, based in Davenport, Iowa, owns 51 daily newspapers in cities such as St. Louis, Mo., Lincoln, Neb., Madison, Wis., and Tucson, Ariz.
W. Dean Singleton, vice chairman and chief executive of MediaNews, is chairman of The Associated Press, a not-for-profit cooperative owned by its member news organizations.