MediaNews and Hearst Buy Majority in Classifieds Site Kaango For $20 Million

This was buried in newspaper conglom MediaNews‘s 10-Q filed earlier today with SEC: the newspaper group, along with The Hearst Corp., has bought 80 percent of online classifieds and software firm Kaango, for about $20 million. Kaango will be held by a newly formed LLC, which is 50 percent owned by each of the two. The remaining 20 percent of Kaango is owned by its founders and is subject to a call option and is expected to be purchased in the future, the company said.

Denver-based Kaango was already working with MediaNews and Hearst to provider its newspapers with their online classified software platform. It also works with Scripps, (NYSE: SSP) Media General, (NYSE: MEG) Freedom, Journal Register, (NYSE: JRC) and others.

Meanwhile, MediaNews also reported its revenues: it lost $1.01 million in Q3, compared to a profit of $13.3 million in the year-ago quarter. Revenues were $334.7 million, up from $295.3 million a year ago, thanks to acquisitions of San Jose Mercury News, Contra Costa Times, The Monterey County Herald and St. Paul Pioneer Press. It didn’t break out its online revenues, but did say that revenues remained flat.

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