NT September 1997

Zip2 acquires Pantheon

By Mike Tartar
Managing Editor

Consolidation is nothing new to the prepress industry, but its now being seen in new media as well, with the announcement in July that Zip2 Corp. has acquired Pantheon Inc.

Pantheon products and staff will now fall under the Zip2 banner, making a large number of U.S. newspapers its customers. Terms of the acquisition were not disclosed.

Zip2 plans to integrate Pantheon's product line, including its top-selling Builder, Interpreter and Community Suite software, into the Zip2 suite of online products.

Recently, Zip2 has been working on its new City Guides, which includes dining and entertainment listings to help newspapers compete with local content providers.

"We view the local online content and services business as an extra, attractive, emerging market with the major participants being newspapers," Richard Sorkin, Zip2's CEO, said.

With the buyout, newspapers can use Pantheon software to import information into the Zip2 system.

"We will try to offer greater value to our customers," Sorkin said.

Both companies were started in 1995 and have found success in different areas of new media development for newspapers. Pantheon has worked on allowing newspapers to convert stories to HTML documents automatically, with a number of front-end systems.

Zip2 works on the other end, helping newspapers become more profitable.

"Pantheon and Zip2 are a perfect match," said Joe Snell, president of Pantheon, who is to become the vice president of the Data Integration Division of Zip2. "The pairing of these technologies will offer a complete end-to-end solution for newspapers, providing them the tools and services to truly become the online hub for information within their community. "

"There's a great marriage of the capabilities of the two companies," Sorkin said.

According to Pantheon, the companies only overlap on 1 percent of their business and only 30 percent of where the companies where headed prior to the acquisition.

According to both sides, the acquisition came together after Zip2 began looking in January for ways to improve its business. Once Zip2 focused on Pantheon, the deal took only 60 days to close. Reaction to the acquisition from Pantheon and Zip2 customers has been "favorable," according to Sorkin.

"The benefits to our mutual customers is obvious," he said.

The company will continue to sell the Pantheon product line to newspapers as a set or as individual pieces.

Zip2s product line includes City Guide, Yellow Pages directory, Real Estate and Auto Guides, and mapping and door-to-door directions. The company recently launched its City Guide with the San Jose (Calif.) Mercury News at http://www.justgo.com.

Before the acquisition the Zip2 Newspaper Network comprised over 72 partners and Pantheon had work with over 200 newspapers in bringing their content online. Zip2's partners include Knight-Ridder Inc., Landmark Communications Inc., newspapers in the Times Mirror Co., McClatchy and Scripps Howard chains and New Century Network.

Key customers for Pantheon include Hollinger's Chicago Newspaper Network, The Dallas Morning News and MediaNews Technologies.

The newly combined company will be based at Zip2's headquarters in Mountain View, Calif.

For more information visit http://www.zip2.com.

September 1997 NT Contents

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