James Batten died of a malignant brain tumor in June 1995. He was fifty-nine years old and in the years after his death, the great regard with which he was already held only grew deeper. Batten was, above all, a newspaperman and in a chain that placed great value on its journalism, Batten, who had covered the civil rights movement and, from Washington, southern politics, had proven himself a worthy leader. That he had died relatively young only enhanced the belief that had he lived, Knight Ridder’s fate might have been different. The sentiment said as much about Batten as it did about his successor, Tony Ridder.

Ridder was fifty-five, blond, handsome, athletic, and pleasant, the sort of man who appeared careful not to give offense, but who, in the view of his detractors, did so just the same. The problem was not merely that he was a Ridder in a company that had been dominated by the Knights and their spiritual heirs, like Batten. Tony Ridder, it was often said, acted like a Ridder, which was to say that his primary interest, his critics never tired of insisting, lay not with the state of the company’s journalism but in the value of its stock. He did himself no favors when, soon after replacing Batten as chairman, he was asked at a meeting of Knight Ridder editors what kept him up at night. At a moment ripe for a public embrace of the company’s journalistic legacy, Ridder instead offered a candid, if unwise, reply: “electronic classified.”

His critics aside, Ridder had a point—not a romantic one, but an important point just the same. Tony Ridder, who did not respond to requests to speak with me for this story, may have displayed the sensibilities of an accountant. But he knew a nightmare when he saw one coming.

At that moment, however, his unsettled view was not widely shared. Batten had bequeathed him a prosperous company that was only getting richer. Knight Ridder posted $2.8 billion in revenue in 1995, a $100 million increase over 1994, which, in turn, reflected an increase of $200 million over 1993. Advertising, which generally accounted for three-quarters of newspaper revenues, was propelling the growth. And while retail advertising produced more dollars, classifieds, which took fewer people to produce, were more profitable. In fact, classified revenue had grown by 13 percent in 1995, largely fueled by a 36 percent jump in employment listings at the the Mercury News, where Ridder had worked from 1964 to 1986, serving as business manager, then general manager, and finally as publisher. The Merc alone accounted for fully half the company’s increase in classified revenue that year; for over twenty years it ranked among the top five papers in the country in total full-run ad linage. This was not surprising, given the rapid growth of Silicon Valley and the Merc’s position there as the only game in town.

The Mercury News, like newspapers across the country, operated, for all practical purposes, as a monopoly, if not in disseminating the news (there was still peripheral competition) than in being the only meaningful destination for every home buyer and seller, every employer and applicant. With the conversion from hot type to cold, it took fewer people less time to put out a newspaper. And with the death of so many afternoon papers, the survivors grew richer. And as they grew richer, they became more attractive to investors seeking a reliably rising quarterly return. Newspaper companies, eager for that infusion of cash, began going public.

But that seemingly enviable absence of competition would come at a profound, if still unseen, cost: newspapers, which once fought for every story and ad, now had no one to push against and so grew complacent. Nowhere was the growing arrogance more apparent, in fact, than in the classified departments, where people did not even talk about selling classified ads, as they might when they spoke of retail. Instead, the sales staff sat at telephones and took classifieds.

“It was a passive thing,” says Peter M. Zollman, a founder of AIM Group, a consultant on classified advertising. “Nobody had to do anything other than publish the paper.” Exacerbating this sense of financial entitlement was the knowledge that newspapers could charge as much as they liked, knowing advertisers both big and small could do nothing about it. “They were,” Zollman says, “rapacious.”

Michael Shapiro is a contributing editor to CJR and teaches at Columbia's Graduate School of Journalism. His most recent book is Bottom of the Ninth: Branch Rickey, Casey Stengel, and the Daring Scheme to Save Baseball From Itself.