Topix.net, the news search engine, is trying various ways to get out of its rut of low visibility and corporate shakeups of its majority owners (the major newspaper chains) and has now raised $15 million. The second round funding, from the three newspaper groups that already own a majority stake in the company—Gannett, Tribune and McClatchy (via buyout of Knight Ridder)—brings the Topix management and employees’ stake down to about 20 percent, from the earlier 25 percent. After this funding, Gannett and Tribune each own 33.7 percent stakes, and McClatchy Company owns an 11.9 percent stake in Topix.net.
Mid last year, the three newspaper companies paid about $50 million for 75 percent of the company…since then, the big hopes for integration of Topix.net into the newspaper chains’ website has been superficial, at best. The company has tried to forge its own independent development path, but fighting against some of the bigger players on one end (Google, Yahoo etc) and the nimble startups on the other end (Digg etc) has been a balancing act at best. Trying to develop a destination site with hands tied behind your back isn’t exactly easy.
Despite all that, getting $15 million for giving up little less than 5 percent is at a damn good valuation. The company, with the new money, wants to double the 25-person staff over the next year…it also plans to develop and market new consumer news services, as well as increase its exposure among online news consumers. It certainly needs exposure…