WashingtonPost.com is contributing 11 percent of the paper’s ad revenues and total publishing online ad revenue, including Slate.com, is up 25 percent but it’s not enough to keep the division from posting a decline in profits, Washington Post Chairman Don Graham told attendees of CSFB Global Media Week. “Online ad revenue has been a little more than 11 percent of the ad revenue of the paper,” Graham said. “That’s beginning to be significant. Obviously that’s growing quite fast.”
Graham customarily interweaves caution with reports of results when he talks to investors and this was no exception. Make no mistake, Graham and the company are bullish on the internet. But, as Graham said during the presentation, “How much can it grow in profits? That might be one of the central questions we face.”
He expanded upon the subject, as did CFO Jay Morse, when we talked after the well-attended — especially for 4 p.m. — session. Part of that question is how much do the online operations, particularly WashingtonPost.com, add to the bottom line? Washington Post-Newsweek Interactive was profitable in 2004 with ad revenues of $62 million and, Graham said, “It will be more profitable this year than last year. But, as I said, that did not make up for the decline in the newspaper division.” (Just an estimate: at the current rate, it could account for nearly $78 million in ad revenue.) But, as Morse reminded me, the site doesn’t account for the cost of the content it uses from the Washington Post. Revenues can be tracked as can direct costs but the actual cost is harder to gauge.
Only one-fourth of the traffic at WashingtonPost.com comes from local users but that segment accounts for the “vast majority” of revenues. I asked Graham if growing revenues would take raising the amount coming in from outside Washington. He said he thought the increase would come from the local segment, citing sales opportunities like the new city guide. During the presentation, Graham mentioned WashingtonPost.com editor Jim Brady more than once as he talked about the city guide and the “blizzard of features” apreading across the site since his arrival. “The prospects for the site look great,” he said.
Graham is also very high on Slate.com; he would like to use Slate.com’s savvy across WPNI when it comes to online presentation.
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