Dan Finnigan, president of KnightRidder.com, said, "This public recognition is a significant milestone that further validates our leadership in the Internet industry. We are proud to be among such respected companies."

KnightRidder.com produces Real Cities (www.RealCities.com) a national network of regional directories and information hubs on the World Wide Web. Already well- established in local news, online classifieds, entertainment services, and local Web site directories, the new Real Cities platform also positions KnightRidder.com squarely in the middle of the fast-growing local e-commerce market.

One of the reasons Knight Ridder attributes to this high ranking is a significant increase in e-commerce initiatives such as online advertising and sponsorships. Additionally, its recently launched Real Cities Marketplace (marketplace.realcities.com) offers e-commerce-related services and enhanced user functionality.

With the Real Cities Marketplace product, users benefit by being able to go to a single site to find what they need whether they want to shop on or off-line. For example, users can get gift ideas for last-minute online specials or they can find out what's on sale at a mall near home. Users also can search from national vendors as well as from merchants in their local communities.

Similarly, merchants benefit by gaining access both to a deep local audience and to the large national Internet population. The connection of Real Cities online capabilities with merchants' existing local operations effectively adds a 'click-and-mortar' dimension to their business model. Whether through setting up an online store or using products such as online coupons to drive sales locally, Real Cities allows merchants to tap into e-commerce revenues by using the Internet to drive sales.

"As I've said before - and do believe -every local business is going to have a Web site in the next 18-24 months," Finnigan said. "It's going to be like a telephone number. And with that, the demand for a regional Web presence is going to explode. And the demand to assist local merchants on the Web is time-sensitive. We're in high e-commerce gear right now."

The trend toward profitable 'click-and-mortar' sales models as opposed to strict dot-com models was further evidenced by the finding of the Internet 500. Traditional 'brick-and-mortar' companies were listed in the Internet 500's upper ranking.

Continuing to move forward, Knight Ridder recently launched its new Internet business unit, KnightRidder.com. The new unit will consolidate Knight Ridder's presence on the Web. To further evolve Knight Ridder's leadership position in its local markets, an aggressive marketing campaign is underway to heighten brand awareness for its city.com properties.

About Internet 500 (http://www.intweek.com/internet500.html): Introduced by Interactive Week, The Internet 500 ranks the top Net-driven businesses by the revenue they generate from their online operations. The list was researched and compiled by the Center for E-Business at MIT (Massachusetts Institute of Technology) and Ernst & Young, a public accounting firm.

About Real Cities:

Real Cities' regional hubs offer the unique combination of locally catalogued Web directories supported by a powerful national database to help users find information quickly and easily. Other services include search, community publishing, e-commerce marketplaces, free e-mail, 24-hour national and local news and a one-time registration service for use on all Real Cities sites and online services. Each 'city.com' hub integrates the hometown Knight Ridder newspaper into the network so users don't have to hop around the Web for current news. Real Cities hubs are designed not just for local news, but users can plan entire weekends or just a night out. Site visitors can choose a movie, select a showtime, get door-to-door directions, check on the weather, pick a well-reviewed restaurant for dinner while monitoring their stock quotes or tracking their favorite sporting event.

About KnightRidder.com:

KnightRidder.com is a newly created business unit responsible for all Knight Ridder Internet operations. KnightRidder.com will manage an interactive staff of 400 and operate all of the company's Web sites and its emerging national network of regional hubs, RealCities.com, located in 29 U.S. markets. KnightRidder.com produces a variety of online services covering news, classified ads, entertainment, shopping, search, community publishing, Internet access, and archives. KnightRidder.com is headquartered in San Jose, Calif., the heart of Silicon Valley. Knight Ridder (www.kri.com) (NYSE:KRI), the parent company of KnightRidder.com, is the nation's second-largest newspaper publisher. The company publishes 31 daily newspapers in 28 markets, with a readership of 9.2 million daily and 13.1 million Sunday. Knight Ridder is also located in San Jose, Calif.

Press Contacts:

Cynthia Funnell/KnightRidder.com, 408-938-6076, cfunnell@knightridder.com