Online news service launched for big papers

NEW YORK (Reuters) - A personalized news service funded by New York Times Co., Washington Post Co, and Gannett Co launched on Tuesday in an attempt to get readers to pay for online news.

Ongo, which received $12 million in funding from the three newspaper publishers, delivers news from a variety of sources starting at $7 a month.

The basic subscription plan includes articles from the Associated Press, the Washington Post, USA Today and select stories from the New York Times and Pearson PLC’s Financial Times. Users can add titles, such as the Guardian and the Detroit Free Press, for 99 cents a month for each additional source.

Ongo’s layout hews closely to print with stories presented in several columns, although it is accessed through web browsers, smartphones and tablets.

Many newspapers are experimenting with models that require some form of payment to access online news as an additional revenue stream to advertising. Newspaper online advertising represents only 11 percent of total newspaper advertising, according to the latest figures from the Newspaper Association of America.

For instance, the New York Times plans to launch a metered pay system, requiring readers to pay after accessing a certain number of articles, during the first quarter. A.H. Belo’s Dallas Morning News is also gearing up to roll out a paid news site.

Ongo, based in Cupertino, Calif., is founded by Alex Kazim, a former president of Skype and eBay executive who worked on PayPal.

New York Times shares were down 2 percent at $10.42 in early trading on the New York Stock Exchange. Gannett shares were down 0.5 percent at $14.79, while Washington Post shares were up 1.4 percent at $445.54.

Reporting by Jennifer Saba; Editing by Derek Caney and Carol Bishopric