The newspaper industry has always been more interested in keeping money in-house rather than sharing even a little with others. Publishers have big egos, and depending on someone else to bring home the bacon doesn’t have much appeal, even with the newsprint industry facing financial troubles.

Even the newspaper-savvy duo of Yahoo’s Sue Decker and Hilary Schneider, architects of Yahoo’s HotJobs alliance with the print classified industry, aren’t appealing enough to keep the publishers’ eyes from wandering to other girls and fantasizing about their revenue undergarments.

Classified Intelligence recounted the recent deal with Kaango by Hearst and MediaNews, a $20 million infusion that gave them an 80 percent stake in the company. Kaango has deals with about a hundred newspapers for community-oriented classified sites.

There is no mincing of words when it comes to why Hearst and MediaNews bought into Kaango, as well as cutting Lee Enterprises in for a ten percent stake. They want to take on Craigslist as well as eBay’s classifieds product, Kijiji.

Details of the deal came as news to Yahoo, according to Classified Intelligence. A Yahoo spokesperson said the company was not aware of the Kaango announcement and requested more details about it from Classified Intelligence.

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Kaboodle and Kaango are hardly identical, but their names and identities (a social shopping community and classifieds site, respectively) are comparable.  MediaNews is entirely new to the scene, though, and in a filing with the SEC, it stated, “Kaango will be held by a newly formed limited liability company, which is 50% owned by each of Hearst and the Company.”

The same filing also spoke to the future of this venture, continuing, “The remaining 20% of Kaango is owned by its founders and is subject to a call option and is expected to be purchased in the future.”

This sounds like an odd situation, yet is a fairly routine arrangement, and amounts to a bet on the part of Hearst and MediaNews that Kaango will become more valuable.  There was no hint as to when (or at what cost) the option might be exercised.

In other news related to this deal, Rafat Ali states, “MediaNews also reported its revenues: it lost $1.01 million in Q3, compared to a profit of $13.3 million in the year-ago quarter.  Revenues were $334.7 million, up from $295.3 million a year ago, thanks to acquisitions of San Jose Mercury News, Contra Costa Times, The Monterey County Herald and St. Paul Pioneer Press.  It didn’t break out its online revenues, but did say that revenues remained flat.”