Heresy in Silicon Valley: Traditional Newspaper Launches

PALO ALTO, Calif. — A startup launching in the heart of Silicon Valley this week is offering a product that many now consider quaint and perhaps even passé: a traditional, ink-on-dead-tree-pulp daily newspaper.In another act of brazen heresy against the prevailing dot-com culture here, the Palo Alto Daily Post, which published its first issue yesterday, has no Web site. At a time when most newspaper owners are looking to the Internet to revive their struggling industry, the new paper’s owners, James Pavelich and David Price, brusquely dismiss the need for an online presence.“We’re a newspaper,” Mr. Pavelich said in an interview yesterday as he returned from shuttling his inaugural edition to newsboxes around town. “The Internet is a form of broadcast to me. We’re not broadcasters. We just don’t have the time to run two businesses.”The new daily is free, which could touch off a newspaper war of sorts with another free paper, the Palo Alto Daily News. The owners of the new paper are intimately familiar with that title. They co-founded the Daily News in 1995.“The first time we had a number of people who were supposedly experts in the newspaper industry saying we wouldn’t last six months,” Mr. Price recalled as he issued assignments to reporters. “We proved them wrong. Not only was the paper a success in a business sense, it won a tremendous number of awards.”In 2005, just as the fortunes of the newspaper industry began to sour, the pair sold the Daily News and several affiliated papers to the Knight Ridder chain for $25 million, Mr. Price said. “They paid a premium,” he said.In 2006, Knight Ridder sold the Daily News to the McClatchy Co., which quickly spun those papers and the San Jose Mercury News off to a Denver-based newspaper chain, Medianews.Mr. Price said the decision to start a new paper was driven in part by disappointment with the direction of the Daily News as the new owners consolidated the operation with other nearby papers. “The news content seemed to shift to a lot less local coverage and a lot more regional news you could find in other papers,” he said.Earlier this year, the Daily News moved its offices out of Palo Alto, to neighboring Menlo Park. Messrs. Pavelich and Price swooped in, tweaking the competition by renting space in the same building it just vacated. “It was kind of comical to us and we jumped at it,” Mr. Pavelich said.Executives at the Daily News did not return calls seeking comment.A former editor at the San Francisco Chronicle who now advises on technology ventures, Alan Mutter, said he welcomes the new paper, but is dubious that it and the existing daily can survive in an environment where readers and advertisers are migrating to the Internet.“I actually very much believe in the free newspaper model. I don’t know that I believe in free newspaper wars,” he said. “My primary source for local information now is Yelp.”Mr. Pavelich said his observations of the coffeehouses near several Palo Alto-based Web firms, such as Facebook, lead him to conclude that the tech-savvy are not forsaking newspapers. “You’ve got the most highly educated, technogically advantaged people there. They’re all drinking coffee — and reading the newspaper,” he said.The Daily Post’s inaugural issue featured articles about city volunteers quitting over mandatory fingerprinting and a physician facing charges for prescribing medicine over the Internet to a Stanford student who committed suicide. At 28 pages, the paper is just a tad thinner than the gaunt metropolitan dailies from San Francisco and San Jose.Messrs. Pavelich and Price also own a small neighborhood daily in San Francisco. Mr. Pavelich, who has a similar free daily in Denver and is planning another in Vail, Colo., said he was not concerned that a recession would hurt the Palo Alto venture. The area’s economic cycles “are more extreme on the high end and less extreme on the low end,” he said.Houses that used to spend seven days on the market now spend about three weeks, Mr. Price said. “I’m not going to be part of any recession,” he added.

Heresy in Silicon Valley: Traditional Newspaper Launches

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