Being accused of stubbornness, however, was nothing compared to the resistance that Ingle and Yates had been encountering almost from the moment they announced their plan. Because by launching Real Cities they had committed the sin second only to compromising Knight Ridder’s stock value: they had angered the publishers.
Knight Ridder was a federation in which each of its newspapers operated as its publisher saw fit, so long as the paper met the company’s revenue goals. The publishers of the largest papers—in Philadelphia, Miami, and San Jose—wielded considerable power, and had come to take themselves, and their perquisites, seriously. “They were our clients and they wanted their independence, and we wanted to take that away from them,” says Mark Weinberg, an editor who worked on Real Cities. “You could have predicted the corporate resistance from the get-go.”
Perhaps, he reasoned, seduction might help. Weinberg organized “Fellows Tours,” which brought the publishers and their top executives to Silicon Valley to behold a digital future that, Weinberg believed, “was not real to them.”
He prepared briefing books that he suspected the “fellows” did not read. No matter. The key was the site visits to, among others, 3Com, Excite, and Netscape, which had been so instrumental in Mercury Center’s migration from AOL to the web. There they heard the story of Netscape’s rapid rise from start-up to multimillion-dollar IPO. Weinberg would later recall one publisher, known for still dictating his e-mails, coming away saying, “I’ve been somewhere. I can’t tell you exactly what I’ve seen, but I can tell you it’s going to change our future.”
Meanwhile, Kathy Yates was working on a different level of persuasion—less the glamour and more the looming threat: she invited a business school professor to present a case study on the power of disruptive technology. The case involved Encyclopedia Britannica, which had for decades been the repository, it seemed, of all known fact. That is, until Microsoft began bundling Encarta into its office suite programs. In the course of six years, Britannica went from record earnings to bankruptcy.
But if the publishers were dazzled by what they had seen on their high tech tours, they did not, in Yates’s view, appreciate the lessons of what befell Britannica. The encyclopedia, they told her, was a part of the book business. They published newspapers.
“I got to the point where I could imagine a world without newspapers,” she later said. “And they could not.”
The one publisher who needed no crash course on the growing force of the digital revolution was Jay Harris. He had been publisher of the Mercury News since 1994, and, in the best Knight Ridder tradition of selecting executives with newsroom credentials, had been a national correspondent for Gannett and editor of the Philadelphia Daily News. In 1998, the Merc posted revenues of $288 million. Mercury Center, which had dropped its access fees that May, was attracting 1.2 million monthly unique visitors and was working to make itself more attractive to advertisers with a database of registered users, expanded online classifieds, and plans for a separate tech site, siliconvalley.com. The paper was also preparing to add a Vietnamese-language edition to go along with the Spanish-language edition it had launched two years earlier. Harris recognized that while the revenues from the new venture would be modest, the edition could establish the Merc as the paper of choice for a growing segment of what remained a booming and ever wealthier population in Santa Clara County.
The prospect of great and sudden wealth was being felt ever more in his newsroom, where editors were finding it difficult to keep people from leaving for new ventures that promised terrific salaries and stock options, too. Donna Lovell, who had been among the pioneers on the Mercury Center staff, left for AltaVista. “We were all going to get rich,” she says. In 1998, Ridder moved the chain’s corporate headquarters from Miami to San Jose, an acknowledgment of where Knight Ridder had staked its future.