The acquisition of Newsbytes News Network by the Washington Post Company yesterday is part of a broader corporate campaign that reflects a growing concern among the newspaper and its rivals about online coverage of the booming technology industry.
The Post Company has expanded significantly beyond its traditional publishing business, especially since the explosion of the Internet. The subsidiary has been snatching up established online media organizations to build its own brand and dominate technology coverage in the newspaper industry.
In addition to Newsbytes, the Post Company last year acquired TechNews, a business and trade publication covering the computer services industry and the Washington technology community. It has invested in Upside Media in October, forming an alliance in which the two companies share editorial resources and collaborate on industry conferences, Web events, and advertising sales projects. Earlier this week, it announced the purchases of several computer industry trade publications and two trade shows from the U.S. subsidiaries of publishing house Reed Elsevier.
John Morton, president of Morton Research, a consultancy that analyzes newspapers and other media properties, says the Washington Post Company's strategy is not only sound, but also increasingly common.
"What they and other newspapers are essentially trying to do is protect their franchises," he said. "All newspapers have one eye cocked on Microsoft, which would like to take away their business, and these investments are very good insurance against whoever winds up being a major player in the future."
For the Post Company, which owns several newspapers, magazines, and television stations, much of the future almost certainly lies in the technology arena. If the ranks of the federal government are taken into account, the nation's capital has more technology workers than the state of California--and it is precisely this audience that the publishing company is after.
"People in the Silicon Valley wouldn't recognize this, but the mid-Atlantic area is really the capital of the Internet in usage, traffic, and bandwidth," said Andrew Jacobson, president of Post-Newsweek Business Information, a new Washington Post Company subsidiary. "Technology is a local business that is growing faster than the other major business in this town, the government."
Of course, it doesn't hurt that many of these acquisitions are highly profitable trade publications that present considerable opportunities for cross-marketing and shared advertising revenue.
The company's acquisition of Newsbytes, which has delivered tech news via the Internet since 1983, allows it to attach its brand name to a well-established online media outlet. The organization provides almost 100 news stories each business day to more than 180 print publications, online services, and Web sites around the world, reaching more than 5 million readers.
The deal also gives the Post Company a running start when compared to its pulp competitors' attempts to cash in on the Web.
"The Washington Post Company is obviously seizing an opportunity to increase coverage of this important news segment," said Wendy Woods, Newsbytes' founder and editor in chief. "It is getting into high tech in a really big way."
With correspondents in 20 cities worldwide, Newsbytes covers developments in software, hardware, the Internet, intranets, computer telephony, telecommunications, legal issues, government regulation, international business, and company news. The pioneer news service also provides fee-based access to its stories, as well as to photographic images of people, hardware, and software related to them.
Newsbytes will become part of Post-Newsweek Business Information, which was created by combining the publishing properties of TechNews with the publishing and trade show properties of Reed Elsevier. Financial terms of the deal were not disclosed.