Companies trying to bury awkward news they don't want widely circulated often stick it at the bottom of a press release or deep inside a regulatory filing. So, for example, we found the following paragraph at the very end of Gannett's announcement yesterday that it had bought social-network software maker Ripple6:"As part of the transaction, the 10 percent share of Ripple6 owned by Chris Saridakis, senior vice president and chief digital officer of Gannett, was bought out completely by Gannett. He did not participate in the sale negotiations."
Smart Gannett Blog readers noticed that curious passage, and wondered, understandably, why GCI is doing big business with one of its own officers. Worse still, the announcement says: "Terms were not disclosed." That's a fancy-schmancy way of saying Gannett would not reveal the price paid for Ripple6 -- or the method of payment. (Gannett stock? Unlikely. Cash? Probably.)
One unhappy reader summed it up last night in a comment: "A horrible economy. A stock that dives from $90 to $8.50. In the middle of it all, an acquisition that benefits -- more than GCI stakeholders -- one of its new division heads."
Saridakis beats odds -- twice!
Gannett will use Ripple6 to create and power online communities, including its most successful ones to date: the recently rebranded MomsLikeMe.com sites.
Now, there are thousands of software companies in the world to buy. What are the odds GCI would choose one co-owned by one of its highest-ranking officers? Better yet, what are the odds Gannett would make that kind of deal twice? Quite good, it turns out.
Just eight months ago, GCI paid $4.6 million to Saridakis (left), for the remaining shares he owned in PointRoll -- the advertising services company Gannett bought in 2005. Saridakis, 40, was its CEO at the time, and so a significant stockholder.That $4.6 million payment raised eyebrows, when it was disclosed last spring in a shareholders proxy report filing with the U.S. Securities and Exchange Commission. Moreover, the payment was disclosed way back on page 50, where many investors might not have seen it. By then, of course, Saridakis had pole-vaulted onto the powerful Gannett Management Committee, chaired by CEO Craig Dubow. Saridakis was the young technologist, suddenly in line to succeed Dubow.
Document reveals $2.2 million contract
The same proxy report also says: "In March 2008, we entered into contracts with Ripple6, Inc., an entity in which Mr. Saridakis holds a 10% interest, pursuant to which Ripple6 will provide approximately $2.2 million of computer programming services related to strategic plan initiatives. As our senior management was aware of his indirect interest, Mr. Saridakis did not participate in the negotiation of these contracts. Due to the immaterial amounts involved, the contracts were approved by senior management."
That $2.2 million is the gross amount, of course; I'd like to know how much of it was profit split among Saridakis and his partners -- and how big a cut Saridakis got.
Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.
Isn't this somehow illegal? I'm glad my job is being slashed so Gannett can give its big wigs some more cash, like they need it.
ReplyDeleteI am a community mom leader that uses Ripple6's technology and it has really changed our perspective on our mom's community. This tool has given us some amazing insight on our communities and it has helped editorial.
ReplyDeleteThe groups are organized well and it is really flexible. In fact, several advertisers have made really positive comments.
I know in our market, other "mom" sites are envious with our make over and the tools.
What other mom sites are envious of your makeover and your tools? That sounds like bs to me.
ReplyDeleteI don't care how dandy the technology is for the moms community - this is insider dealing at its absolute worst. Jim, you are performing excellent investigative work here on Gannett. I hope the stockholders and federal regulators sit up and take notice. It is my belief that the dealings at GCI that are destroying a large segment of the news business eventually are going to attract attention from Congress as well.
ReplyDeleteWith Ripple6, GCI is getting out of the business of just delivering information, and into the business of spying on its customers.
ReplyDeleteSaridakis used to work for Doubleclick, the agency responsible for dropping spy cookies in your computer. In the late 1990's, Doubleclick bought Abacus in a deal that allowed the company to leverage that information for advertiser use.
For more information read Jason Catlett's Junkbusters site.
Ripple6 is nothing more than a spying program. Like others, I found it curious that the Mommy site didn't censor those BJ comments in Cincinnatti. Now it becomes clear why. GCI is more interested in the information it is collecting from these sites than traditional moral issues that once drove this company.
This is a really big deal. With Ripple6, we are now going from information delivery to information manipulation.
Tin foil hat alert! Probably too late but you need to put one on before you read this post and it's ridiculous comments.
ReplyDeleteI thought Saridakis was the good guy?
ReplyDeleteI don't care what they pay him. He's the key to our future right now. You've stuffed the guy's pockets; now listen to what he has to say and let's develop a company-wide goal/mission/purpose.
Please?
I wonder how long it will be before privacy advocates get their way and force changes to behavioral targeting? Sounds like its self-regulated now. Yup--we all now how self-regulation works.
ReplyDeletehttp://www.ftc.gov/opa/2007/12/principles.shtm
Read about it yourself at Junkbusters and make up your own mind. Corporate is taking a real risk with its brand. Doubleclick could never get over the invasion of privacy charges of the 1990's, and if the Mommy site users ever find out how they are being spied upon _ and what use GCI is making of that _ it is the end of any value in the Gannett brand.
ReplyDeleteShouldn't I feel a little sleazy knowing that GCI is trying to make money from a site where women talk among themselves about giving BJs to their boyfriends or husbands? Think about that when you cash your paycheck.
ReplyDeleteFrom a Ripple6 press release
ReplyDelete"....New York-based Ripple6 powers white-label social media properties, complete with user activity and content tracking, as well as traditional demo- and psychographic reports...."
Get your tin foil hats out fer sure.
9:24, I thought about that when I was getting laid off. Gannett is not what it used to be and it's getting worse. Good luck to ya.
ReplyDeleteI happen to think privacy advocates are going to have the ear of this new administration. The Pentagon's total awareness program and the general loss of privacy has made this a great issue. I can imagine Dubow being hauled before a congressional committee to talk about how Gannett is using private information on people it is gathering to profile them and their interests. Can you see Dubow explaining to a congressional committee what use GCI made of those Cincy BJ files?
ReplyDeleteIt's always interesting to see how much of these so-called deals benefits the big shots! And as Jim points out so truthfully that these "items" like insider trading are buried as small paragraphs inside the proxy report. It disgusts me to see even one executive of Gannett profiting from these deals. I am distrustful of all executives, because it has hardly something to do with bringing Gannett into profitability. It's just another way of stuffing somebody's pocket before the mighty "Gannett Titanic" is going under.........
ReplyDeleteAnd comments like these >>I don't care what they pay him. He's the key to our future right now. << are the real kicker. Looks like the Executive office is bringing it's wisdom to your blog, Jim.
He's our future - OMG - what's next?
The traffic at once were popular Moms sites in Indy and Cincy tanked after implementing ripple6. Corporate is in the process of COEing the digital operation.
ReplyDeleteI like where it says the amount was 'immaterial.'
ReplyDeleteTry that when arguing aginst next week's layoffs.
Remember the $1.2 billion loan that Corporate took out last month, without explaining why? Was the reason this money was needed was for buying Ripple6?
ReplyDeleteThese "Moms" sites were done just so the sniveling weasels at Indy and Cincy could get pats on the head from Gannett and be talked about. THose "flavor of the month" sites are worthless.
ReplyDeleteUntil yesterday, I would never accuse Corporate of being corrupt. But this deal stinks, and stinks to high heaven. Not only did it involve lining the pockets of an insider executive, but it left the company holding a very embarrassing product. We need an explanation of who got what and how much from this deal. I cannot believe the board of directors would approve this if they knew execs were enriching themselves at the Crystal Palace.
ReplyDeleteThe moms sites will fail like the niche products did before them. Gannett hopped on the soccer mom/mommyblogger bandwagon about 4 years too late.
ReplyDeleteOur paper's Moms Site Manager has her salary paid by Gannett, not by our paper. So when a bunch of hard workers are shown the door in December, take heart that a tiny group of women will still be able to talk about the pressing issues of toilet training, mean teachers and Annie's Mac and Cheese.
I think Gannett has fallen prey to a bunch of faulty assumptions about human behavior. Also, have you ever heard anyone say they want to see more rich, moving, deep advertising on news web sites? I've only hear people gripe about the intrusiveness of the kinds of ads that dance, jiggle and take up the whole screen.
ReplyDeleteI am so glad Gannett is not buying newspapers or broadcast stations anymore! For the past few months Gannett has invested in or purchased Pointroll, Cozi, Mogulus, Shoplocal, Careerbuilder and now Ripple6.
ReplyDeleteIt is about time Dubow started executing against his "strategic plan" of focusing on digital and Gannett's "transformation". I am sure Saradakas has had a big influence on their plans this year. We will see if it all works out. So far, people have held him in high regard for his candor and intelligence.
Unfortunately for this blog, if we were covering this story in print, we would only see the negative and not the positive side of these companies.
When was the last time anyone came up with a new innovation for the newspaper industry (please no USA Today responses!). We are all good at writing and complaining about our employer, but we do not innovate and we are, unfortunately, forced to buy our way back into the media industry.
Full disclosure...I am a journalist at a large Gannett paper and am also worried about my job and the newspaper industry in general, but I recognize the value of these investments.
I seriously think that the people that have the most to fear are the ones that will be left after this round of cuts. Its gonna be hell to be left behind.
ReplyDeleteLesson #1 for bitter Gannett bloggers:
ReplyDelete1. Newspapers make money selling papers and selling advertising in the newspaper
2. People are NOT buying newspapers anymore (this means we are losing circulation revenue).
3. If people do not buy newspapers anymore, we cannot sell advertising (this means we are losing advertising revenue).
4. When revenues decline for both circulation and advertising, we need to cut costs.
5. The quickest costs to cut are people, benefits, salaries, etc.
6. Where are people finding their information today???COMPUTERS, iPHONES, etc.
You cannot buy a computer on a newsstand nor can you deliver a laptop to a driveway.
Wake up, the world is changing around you artifacts. Why doesn't Jim distribute his blog in PRINT?
He cannot afford to!!!!
Great post Anon 11:00am!
ReplyDeleteIt is also funny how these bloggers won't even pay Jim for his hard work. SO not only do we not have to subscribe to the blog...we get to particulate in it. He is now even adding video. All that value add to get you suckers to put $5 in his pocket.
I too did not send in any money. I enjoy the free model of the web!
Yeah, but the reason circulation is dropping is Catch 22. THERE IS LESS AND LESS IN THE PAPER TO READ because you are letting go employees.
ReplyDeleteThe print product is your CORE product. You should be investing in it, bulking it up with relevant area-specific stories that aren't like the crap you can read in any magazine, newspaper or website in the world.
The website should be a companion to the CORE product, which is your paper. But people are so frustrated now with the lack of information in the newspaper and its biases that they are canceling their subscriptions.
If Ripple6 is so great, wonder why nobody else bought it? Was anyone else interested, anybody know?
ReplyDeleteBuying companies and purchasing assets from one of your own officers, with no oversight or stockholder review, is immoral and unnacceptable. The amounts are obscene. At a company where every penny of overtime is put under a freakin microsope, the pay and "benefits" of being a top Gannett dog are over the top. Where will the next round of inbreeding occur? Who will be the next Gannett honcho to sell some high-ticket must-have technology to the company? Keep your ears open, because there's another deal in the works.
ReplyDeleteWhere does this kind of behavior fit into the 1st Amendment mission of the newspapers? Right, you don't hear that much anymore, except from old, genuine newspaper guards like Phil Currie.
Along with our slimmed down staffs and thinner products, our content is quickly deterioriating. News features, fluff, events, police blotter (where the cops do most of the work) nothing offensive or threatening to the powers that be. That's the daily Gannett budget. Gannett has been low on testosterone for a long time. But they've now entered eunuch territory. There isn't much fight left in the dog, because there's no t much dog left in the dog.
It is not that newspapers don't have enough news and aren't bulky enough.
ReplyDeleteIt is that no one, especially younger people, have to wait for the printing press to run or the 5pm news to find out what is happening in their community.
The internet has changed news and information. You can write all you want, but no one is going to buy it.
Dubow, the tech guy and the rest of 'em are probably really nice, well-intentioned and hard-working people.
ReplyDeleteIt's sad, though, that a company seems to think it can surivive and get rich off of claiming to understand human behavior better than the experts. The only thing predictable about behavior is its unpredictability.
Maybe the big guys are just plain ignorant.
Why no one bought Ripple6? When Saridakis was at Doubleclick, there was a huge dispute involving Doubleclick's purchase of Abacus and plans to track and profile computer users. In face of threats of congressional investigations, Doubleclick backed off, eventually sold Abacus. Ripple6 looks to me to be an Abacus clone, and Saridakis found some sucker who doesn't understand the privacy issues involved to try and buy. There are huge privacy issues involved in tracking people like this.
ReplyDeleteEven taking cover behind the "anonymous" name (which we all use), it takes a real set of brass balls to refer to yourself as "community mom leader."
ReplyDeleteYou must be so proud.
I thought everybody tracked and profiled people now. Does CareerBuilder and ShopLocal?
ReplyDeleteTo 11 a.m.
ReplyDeleteWhat you are saying makes sense. But who writes the news you are reading online? Is it from a professional reporter or a blogger? If it was from the former, you probably will have to begin searching harder for news as many journalists are losing their jobs with more to come. That means all that news posted on various sites (most of which are really just links to newspaper sites) will start to decline.
If your news comes from bloggers, good luck on getting the whole story. Do you actually think bloggers will have access to all the sources that professional reporters do? Think again!
Society's demand for free news online will eventually lead to a lack of free news online. It's only a matter of time. It takes time and effort to pump out these stories. And if it eventually comes down to just bloggers, they won't have the time or fortitude to do it like the pros because it will take too much time away from their actual jobs.
I'm sick of people today demanding free stuff! Free enterprise does not mean free of charge!
12:24 PM
ReplyDeleteBut, there's only self-regulation required now in the US. Aren't Canada and the UK way ahead of us on the privacy issues?
It would be interesting to hear from some of our friends from Scotland on this.
This is just unbelievable. Corporate drains the budgets of newspapers, tells editors and publishers to put together new savings and layoff lists, then Dubow decides (apparently on his own) to pour money in some real murky technoloyg that has been around for a decade without much interest. Companies like Procter & Gamble have been using approaches like this Ripple6 outfit to improve brand loyalty, and compile lists of what computer users they track are buying, or what they are saying.
ReplyDeleteI knew there were people in this company who hated newspapers, and they are here this morning on this blog.
ReplyDelete10:28 wrote: "Until yesterday, I would never accuse Corporate of being corrupt."
ReplyDeleteWow ... really?
So you thought they were just clueless and stupid?
Exactly. I thought them clueless and stupid. But I never thought them venal, until yesterday.
ReplyDeleteWell, SURPRISE!
ReplyDelete"Do you actually think bloggers will have access to all the sources that professional reporters do?"
ReplyDeleteAll bloggers? No, but eventually the best bloggers will become reporters in their own right (though not with the much-lauded Journalism degree in some cases) and have access to sources.
Look at this blog and its track record at predicting the layoffs in August, September, and now. Do you doubt that Jim (as a blogger) has sources in Gannett that "professional reporters" don't have access to?
I cannot believe how silly some of these comments are. Do you actually think any investment can be done without the approval of the Board of Directors? Have you actually lost this much faith in the CEO of Gannett?
ReplyDeleteAnd you call yourselves journalists?
You have to be kidding. If this is the type of cynical mind set you have, then you should all get checked out.
This blog has really brought out the worst in this company.
Have some faith in the leadership, the board and your managers.
In a few weeks, over 3,000 of you will be removed from your jobs. I wonder why it is not more of you.
You all have a bad attitude and need to grow up.
I have had a lot of respect for Gannett. I was offered a package a few weeks ago and took it. I am ashamed to actually say I worked with several of you.
This blog brings out the nastiest, most cynical negative side of all of you.
Back in the days we would celebrate our successes.
For those of you who will not be fired, take the time to celebrate and don't get caught up in the negativity.
Jim,
Why don't you do some real reporting.
Jim did the real reporting here, 3:09. He did what none of us did yesterday, and that was to look at the SEC documents. In spite of your support of your former employer, we didn't make this crooked deal. If this involved a government official and a government purchase of software, you bet that would be one hell of a conflict of interest story. Was this approved by the board of directors? We don't know because Tara didn't say. Do we have any faith in Dubow. No. After three rounds of layoffs this year, I see no reason to believe he has any idea of how to run a company. Funny, but Wall Street seems to agree with my view. Seen what happened to GCI recently?
ReplyDeleteFor what it is worth, this guy Saradakis is smart. Look at his history of companies and the respective success. I bet we all wish we were in his shoes. Then again, we wouldn't because we are wearing Gannett shoes. Those are the shoes that follow innovators and industry pioneers like him.
ReplyDeleteI admire someone's success and in 1997 when he was starting Double- click, what were we doing?...Celebrating USA Today's 15 year anniversary.
I hope Ripple 6 is as successful here as it might be in another company's hands. I also have to wonder that Gannett wasn't the only one looking at this company.
No one here questioned whether the guy is smart, or not. Anyone who can pull this sort of deal must have something on the ball. The question is the corruption involved, and the direction into privacy violations of our readers and customers that Ripple6 will take GCI.
ReplyDelete3:09 p.m. ... I oddly agree with you completely... it just shows how, when times got tough, the "better than anyone else" Gannett staffers became jackels biting and clawing at their own brethren! ha! I find it amusing. I never had respect for the lofty Ganettoids who looked down on the "little guys" in other media.... too bad guys... you should have gotten out sooner! I find the anger and fighting on this blog hilarious. When you hate Gannett, times like this is what we live for! any response?
ReplyDeleteRipple6 has been around for years. No one else would go near it with a ten-foot-pole because of the privacy issues that sank Doubleclick.
ReplyDelete3:09 PM
ReplyDeleteThis IS real reporting. This blog synthesis information and reports facts clearly and understandably, something that would certainly help Gannett become more than a rah-rah press release, advertorial outlet.
I happen to agree with the post by 3:09pm.
ReplyDeleteThe request for real reporting is something that has not happened on this blog. The most this vehicle can claim is that it was the first outlet for posting "tips" sent in by users. Their source of their tips: company emails, press releases, and internal communications.
Many of the items that users post are not factual, yet they are accepted as fact by readers. It is comical at times to read how little they know about their own properties, let alone Gannett.
The site has a moderator, not an investigative reporter. The post of the sale of Ripple6 to Gannett is a great example. Extracts were from press releases and past proxy statements.
Users typically ask the moderator for more information (“Please find out about xxx for us.”) and the best that happens is a post will appear requesting information (If you know about xxx please let us know.) Sadly, a majority of the posts on the topic will then be accepted as fact by a great number of the site's readers.
3:28pm notes that the moderator did real reporting because he actually read the SEC documents. Then he says it was a crooked deal? And the proof of it being crooked is what? Remember an opinion is different from proof.
2:52pm speaks of the track record the blog in predicting past layoffs. I have to disagree; it was a repository for the posting of information relevant to the layoffs from not-so-secret sources as emails and press releases. That is not predicting.
The blog states it has an Editor and Publisher. I think not. A good moderator? Yes.
An Editor and Publisher has a responsibility to a publication’s readers for presenting factual information and I do not see that here very often. A Moderator has a responsibility to police posts, create topic threads, and keep readers happy, and I do see that happening.
I feel for the readers who accept all information posted here as factual, or believe it represents reporting at its finest.
I am sorry, but I am not following the privacy issues you are bringing up on this blog.
ReplyDeleteAs I understand it, Double click got in trouble because they were trying to link a cookie on a computer with an offline database of catalog shoppers in Abacus. What does this have to do with Ripple6's technology?
Speaking of shoppers, I just tried shoplocal. Was so happy to see the fall back to school shopping tips today, November 14.
ReplyDelete3:09 -- Kiss my a$$! I'm on this blog to find out what the hell is going on at a company I've worked for 1/2 my life. It's been good life, until the last 3 years when the idiots took over. We now write (print/web) stories that you can read in 30 seconds or less with no "meat". We outsource to India. The COE has helped kill circulation. RTC has killed quality of photos. They/we have convinced outselves that print is dead and in doing so convinced wall street and our customers.
ReplyDeleteThe web will not save us.
I think 4:23 said it right: This blog is no substitute for real journalism. It's an echo chamber of tips, gripes, stock manipulator plants and clueless speculation by journalists too holy to learn Business 101. Maybe it will become real journalism some day, but it's gonna take as much of a makeover as any print newsroom.
ReplyDeleteTwo examples: Jim and the "wisdom" of the crowd haven't done a thing to knock down two persistent canards appearing here repeatedly in recent weeks: 1. That GCI did not explain why it drew $1.2B from its standby credit. 2. USAT bulk circulation is bogus, fraud, padded, etc. Both could be demolished by a Journalism 101 student.
I'll take a crack at those two, 10 pm:
ReplyDelete1. Gannett didn't adequately explain the circumstances surrounding its drawdown -- hence the questions.
2. I don't think USAT's bulk circulation is bogus, fraudulent or padded. I think it is what it is: Heavily discounted papers that advertisers treat with appropriate skepticism.
Didn't Fred Sanford {sanford and son fame} drink "RIPPLE"
ReplyDeleteWow. I haven't been here in a few days and the vitriol directed at Jim is unbelievable and reeks of Corporate folk who are angry at the information that has been revealed here.
ReplyDeleteTo those of you who think reading an SEC document isn't reporting, how about telling us what you think reporting is? How many people who read this blog would even know where or how to find those documents? Remember, there are a lot of non-reporters who read this blog.
Regardless, we have the right to question a deal where someone in Corporate is benefiting financially. I don't really care whether it's 10 percent or 100 percent (by the way, 10 percent of a deal that large is a nice chunk of change, if you haven't forgotten), it's very concerning that someone who's an executive in this company is benefiting while folks are looking at pink slips for Christmas.
If you can't handle the criticism and the questioning of stuff like this, then stop reading.
And that goes for the people who can't stand the "whining" here. No one's making you read this. Stop reading.
I hope you clowns concerned about privacy have stopped using credit cards and you may just want to abandon the internet.
ReplyDelete