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Knight Ridder forms Net business unit

The media giant says it is creating a new business unit for its Internet operations, to be called

Media giant Knight Ridder said today that it is creating a new business unit for its Internet operations, to be called

As first reported by CNET, the nation's second-largest newspaper publisher is considering a restructuring of its Internet business--largely to benefit from the hefty premiums Wall Street is attaching to Net properties.

" will reorganize, manage, and control all of Knight Ridder's efforts, including the Web sites now operated by our newspapers, as well as the activities now run by Knight Ridder New Media in San Jose," Knight Ridder chief executive Tony Ridder said in a statement.

Ridder said the transition will be complete by the end of the first quarter of next year. The company did not say whether it plans to take the newly formed unit public or issue a tracking stock. Sources previously have said that no decisions have been made on any financial structure. president Dan Finnigan called the timing for this move "perfect," but some analysts think the company is overdue. Knight Ridder joins other media companies including the New York Times Company, Forbes, and Time Warner in reorganizing to highlight its Internet business.

The Net's rapid growth has forced many of these companies to rethink their business strategies.

Next year said it would "undertake a major marketing campaign to promote our growing portfolio of regional brands." The company's Real Cities network of local sites will offer "several new features focused around local databases and local events," Finnigan said.

Ridder said revenue from the company's Real Cities sites is expected to increase by about 70 percent this year, to more than $30 million. It expects "significant" growth from the operations next year, too.'s Jeff Pelline contributed to this report.