The Washington Post (NYSE: WPO) Company has gone from being a ‘media & education’ company to an ‘education & media company’, as the the Kaplan education division is on the cusp of accounting for more than 50 percent of the company’s revenues. So not surprisingly, CEO Donald Graham spent most of his presentation at the UBS Global Media & Communications Conference discussing the prospects for that side of the business. The newspaper itself came last in the presentation, and seemed to get the shortest amount of time. But Graham insisted that despite weak results at the paper, there are no plans to give up on its value, and it’s committed full-on to the digital transition. Consistent with past statements, Graham said, “I don’t think we or anyone has produced a definitive 21st century news site… but that’s our aim.” The overall theme of the presentation was that it’s not today’s share price that matters: “I care enormously about the value of this company ten or twenty years from now… I do expect that this will be reflected in the long term.”
WaPo: “Anyone presenting from the point of view of a newspaper company will tell you that 2007 was a worse year than we’d hoped.” But, the company has an “absolute commitment” to the transition to new media. “It is as plain as day that people do not have the appetite for newspapers they once did.” But people do still have the appetite for news. “The crackle in the mind that a good morning newspaper can produce has to be duplicated online or on a mobile device in the future.” Election 2008 represents an opportunity, as Graham thinks everyone will visit the website at some point during the election, so the goal is to turn those one-time visitors into longtime readers.
Digital: After the presentation, I got a few minutes to chat with Graham further and get into specifics on the company’s digital efforts. As he stated in the presentation, he’s not convinced that anyone has cracked the online news nut, and that includes established portals such as Google (NSDQ: GOOG) and Yahoo, (NSDQ: YHOO) as well as startups (he specifically mentioned Newser) and other newspaper sites. By way of comparison, he offered: “Going to Amazon (NSDQ: AMZN) to buy a book [is] an example of a question that’s pretty definitely answered.” News has not been. One of the key challenges for WashingtonPost.com is to expose readers to breadth of the content that’s already on the site. On newspaper consortiums: “We talk to those newspapers, to Yahoo, Careerbuilder, and other potential partners, Google, all the time.” If WaPo can come up with a deal that it feels would be beneficial, it would be willing to join in one of these broader partnerships. Another thing we can expect is more hyperlocal initiatives. Officially, there are no definitive plans to launch another site like LoudounExtra.com, but Graham indicated that more such sites for other regions in the area are quite likely.
Kaplan The education business is a strong grower, but income has been down on specific issues. Online higher ed business is “a gem,” with 37,000 students. Total year-to-date revenue growth of 12 percent, ex-acquisitions.