No Magic In Knight Ridder's Dot Com Idea

If you're an old-line newspaper company--even if you're online--it's hard to get any respect. Take Knight Ridder Inc. In 1999, the San Jose-based company's operating earnings soared 24%, to $624 million, on sales of $3.2 billion. "We set a record in every way you can measure," gushes Chairman P. Anthony Ridder. Yet Knight Ridder stock is off 30% since December. And not even the Mar. 1 news that it's paving the way for a spin-off of its pioneering KnightRidder.com Web business budged the stock.

The woes of Knight Ridder, which publishes 31 dailies including The Philadelphia Inquirer and The Miami Herald, are illustrative of a bigger problem that print businesses face in the New Economy. Web spin-offs are often embraced as hot concepts. But in the print realm, it's unclear whether such moves are savvy new business opportunities or desperate defensive steps against Web rivals. "All newspaper companies have Internet strategies," shrugs newspaper analyst John Morton. "I don't think it has any particular resonance with investors."