Knight Ridder, Washington Post Explore New Online Classified Ad Potential

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NEW YORK ( -- Large media companies such as Knight Ridder and The Washington Post Co. are taking a serious interest in an emerging new Internet organizational model that could offer new kinds of
classified advertising opportunities.

Dates and mates
Called online social networks, the new enterprises have names like Craig's List, Friendster, MeetUp and Originally conceived as peer-to-peer social networks for singles seeking dates and mates, they are evolving into online hubs where consumers can query extended networks of like-minded individuals about desired products and services.

Along with enriching one's love life, these online communities are enabling individuals to quickly get hard information from trusted people about the best house music in Pittsburgh, the most affordable neighborhoods in Denver or a reliable house painter in San Francisco.

$6.3 million
One of the latest to break surface, as well as the one that appears most focused on commercializing the concept, is Three weeks ago, the San Francisco-based company announced it had received $6.3 million in funding from venture capital firm Mayfield, and that Knight Ridder and The Washington Post Co. also participated. It is not known how much either media company contributed to the funding round.

KnightRidder Digital, the online division of the nation's second-largest newspaper company, sees as a way to reach broader and younger audiences who use the networks the way their parents used a newspaper's classified ads.

"We sense that there's this emerging market ... that people use other people in order to connect with listings and clearly, a big part of our revenue is classifieds," said Hilary Schneider, CEO of KnightRidder Digital.

100 metro Web sites
KnightRidder Digital is in 28 markets and has a total audience of 8.4 million for its various online news, features and services. Its Real Cities Network sells advertising across 100 Web sites to national advertisers.

Tying referrals to content
Ms. Schneider said she is exploring a business model that would integrate self-published referrals with KnightRidder content such as movie and restaurant reviews. "The first revenue engine we'll have is around the listings," she said, adding that KnightRidder will build a prototype and conduct focus groups. Her company would cross-sell Tribe and classified listings would be priced according to the ad's length, and whether it included video or photos.

Launched in July, invites people to build a variety of social and career networks, or tribes, to help them accomplish their goals -- short-term and long-term. Once a person joins, they invite their friends to join as well, and each member is linked to the members who invited them. A person can send out the call to her tribes to help find a plumber, a job, a running partner, the best place to find Mexico's Oaxacan cuisine in New York or a 1965 VW bug. A recommendation from someone in a member's tribe gives a marketer a way to tap into the power of word of mouth that then travels through the 45,000-member universe.

Highly educated urban dwellers
Currently, says it has more than 7,000 tribes, and 20 million page views in October, up from 5 million in September. It said it had 144,000 unique visitors in October. Half of's traffic comes from Los Angeles, New York and San Francisco. Typical users are highly educated urban dwellers aged 20 to 40, according to the company.

"Tribe enables us to potentially expand our reach within our market to customers who aren't traditionally newspaper readers," said Ralph Terkowitz, chief technology officer for Washington Post Co. He believes that Tribe will enable his company to develop online directory products and classified listings based on the social network model.

"Your tribe is a place where you can bring your off-line relationships. You can create tribes or socially networked groups around your existing interests and then leverage the network to get things done," said Mark Pincus, Tribe Network's CEO and founder. "It's like creating your own customized broadcast network."

He said that while a few online ad sales networks approached Tribe, the service is free and carries no advertising. Tribe plans to test for-pay and ad-supported models in early 2004.

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