Topix.net Raises $15M

Update: Funding clarified

News aggregation site Topix.net has attracted $15 million in a new round of funding from Gannett Co., Tribune Company, and The McClatchy Company. The company says this is equivalent of its Series B round, though it is already majority owned by the three newspaper companies.

Topix.net, which gathers stories from both mainstream news sites and blogs, sees 9 million unique visits per month according to its internal measure, though comScore says it’s 3.9 million. Growth had been flat, says co-founder Chris Tolles, who is Topix.net’s VP of sales and marketing, until the company launched forums last year, allowing readers to talk back to the news and add their own commentary and reporting.

Since then, visitor counts have grown 15 percent per month, according to internal numbers, with users now leaving 16,000 comments per day. Tolles brags that according to Hitwise, Topix.net is a top-25 Internet news site, bigger than CNET and the online presence of Time Magazine.

Topix.net sits somewhere between news aggregators like Google News, social news sites such as Newsvine, and citizen journalism projects. It gathers content from approximately 50,000 sources, half of them mainstream media and half blogs. The company’s best features are local search and mapping, as well as histogram results for any search query. These can be put to use to get an idea of what’s going on in your town right as it’s happening.

So, for instance, last Tuesday night I was in the Castro district of San Francisco for Halloween when a shooting occurred a little ways up the block I was on. When I got home, news sites were just starting to report on what had happened, with each adding a little detail but not much. Through a search on “Castro Halloween” restricted to San Francisco on Topix.net, I could try to get as much information as was out there at the time from sources such as SFGate, KCBS, and SFist.

Newspaper companies own a majority of Topix.net; Gannett and Tribune each have 33.7 percent and McClatchy has 11.9 percent. This is a shift from the 25 percent each that the three firms took in March of 2005, for a “single-digit million” investment. Update: After being confused by conflict in various reports of Topix.net’s funding, we wrote in to get clarification. Here is the real story, as we understand it: The newspapers paid $45 million for 75 percent of the company, with the “single-digit millions” Tolles mentioned in our interview going into development of Topix.net. The remainder went to the founders. In August 2006, after Knight Ridder was bought by McClatchy, Topix.net was valued at $72 million.
As for monetization, Topix.net provides “related links” content for 177 different publications currently, including some of those of its owners. It wants to take advantage of its increasing local user base to run highly targeted advertising. (For now, ads come from Goooogle.)

That’s all well and good, but we can’t get past the size of the round. $15 million is a lot of money for a news site! Tolles said the funding will be put towards hiring and marketing, and described it as “a pretty good warchest.”

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