The Washington Post turned in a strong performance. Revenue grew 2 percent, and operating expenses decreased 2 percent as The Post benefited from a decline in newsprint expense and additional pension credits.

Advertising, which started slowly in the first two quarters, ended the year with noteworthy gains in a broad range of industry segments. Total advertising revenue increased 3 percent to $649.9 million, from $630.1 million in 1998, which was a 53-week year.

Classified advertising revenue rose in the face of increased online competition. Automotive advertising showed solid gains, and recruitment also grew. Real estate advertising suffered due to a lack of housing inventory caused by the strong local economy.

Technology, telecommunications, movies, media, travel, and financial advertising each experienced double-digit gains for the year. Internet advertising in the newspaper also provided substantial incremental revenue growth. Broad-based increases in retail advertising were curtailed somewhat by a change in the activity of two major accounts.

For the first time in six years, daily circulation at The Post for the 12 months ending September 30 showed a slight increase. The gain resulted from new sales initiatives and a growing presence in school classrooms in the region. Sunday circulation declined just under 1 percent for the same period.

The Post's new production facilities met expectations. A new pre-press process and a new pagination system were successfully implemented during the course of the year.

Washingtonpost.Newsweek Interactive (WPNI) continued to stake an ambitious claim online for The Washington Post and Newsweek in 1999. WPNI made significant strides in expanding The Washington Post Company's news and information franchise nationally and globally, as well as building a definitive local news, information, and e-commerce presence.

Anticipating the arrival of broadband and multimedia news delivery, WPNI led negotiations that resulted in a strategic alliance with MSNBC.com, MSNBC Cable, and NBC News, and The Washington Post, Newsweek, and washingtonpost.com to share news material and technological and promotional resources across multiple platforms. The relationship provides WPNI with significant audio and video assets for washingtonpost.com and greater exposure online and on television. MSNBC.com, MSNBC Cable, and NBC News now have access to the deep, broad news content of The Washington Post and Newsweek.

A major component of the relationship will be the launch by mid-year of Newsweek.MSNBC.com, which will be Newsweek's exclusive home on the Web. Plans for the new site include joint coverage of selected major events and breaking news, multi-platform programming projects, and expanded Internet coverage. The new site will benefit from increased visibility on MSNBC.com, as well as cross-platform advertising sales opportunities and cross-promotion of the various properties among the companies' media.

Throughout 1999, WPNI met its aggressive revenue goals. washingtonpost.com continued to rank among the top local and national online news and information sites, attracting an average of nearly two million unique users and over 74 million page views per month.

Recognizing the advantage in providing Washington Post journalism online throughout the day instead of the ubiquitous wire copy of other news sites, washingtonpost.com introduced PM Extra, a Web-only midday installment of articles and updates written by Washington Post print reporters. Weekdays at 1 p.m., people can log on to washingtonpost.com and find fresh Post content with all of the authority, voice, and context that they have come to expect.

With the goal of combining award-winning news coverage with practical, in-depth information, entertainment, and e-commerce services, washingtonpost.com completed the first phase of its transformation into a network of separately branded news and information-specific "super channels" in 1999.

Five new channels were introduced on wider 800 x 600 pages. OnPolitics was launched as an authoritative year 2000 campaign and election super site. Onwashington.com debuted to provide rich and deep community news, information, and interactivity to people living in the greater Washington area. It offers detailed community information sorted by neighborhood or zip code and customized to suit individual interests. Live Online - a popular feature offering several hours daily of moderated discussions with Washington Post editorial staff, newsmakers, and experts - also was introduced as its own channel.

washingtonpost.com relaunched its Entertainment Guide and introduced a new look, feel, and functionality, including online ticketing through Ticketmaster. To better meet the needs of consumers and advertisers, the site created one-stop shopping for all of its commercial services - from online shopping to classified products - via its Marketplace section. In addition, the site's new, enhanced local employment offering - WashingtonJobs.com - is the leading source of information about jobs and careers in the fast-growing Washington, D.C., region.

The National Weekly Edition of The Post, with a circulation of approximately 76,000, continued to serve a national readership with a strong interest in news about politics, foreign affairs, popular culture, public policy, and personal finance.

Washington Post Writers Group launched its own website (www.postwritersgroup.com) and added its first comics editor in 1999 to develop new business in both areas. Revenue from international sales continued its steady growth, rising 10 percent over 1998. To expand its photo reprint business, the Writers Group licensed two outside companies to sell selected news and sports photos via the Web.

The Herald (Everett, WA) continued to benefit from a buoyant local economy and established record operating profits and margins for the second straight year. Led by a strong surge in classified advertising and preprints, Herald advertising revenues finished the year 10 percent ahead of 1998, the highest growth rate since 1985. When combined with lower newsprint prices, operating income jumped 25 percent.

In its second year, The Herald's county-wide monthly business publication continued its strong growth curve, nearly doubling advertising revenues over 1998.

Gazette Newspapers launched its 31st community newspaper in 1999 en route to its sixth straight year of operating income growth. Total circulation at year end, including the weekend regional edition, The Montgomery Gazette, reached 480,000 copies. In February 2000, The Laurel Gazette was launched, with a circulation of 27,000, increasing total circulation to 507,000. The Gazette achieved complete pagination - straight to film - for all of its publications. The company's commercial printing business, Comprint Printing, had its best year ever, surpassing $1 million in operating income. The Gazette received an award for General Excellence from Suburban Newspapers of America, as well as awards for creating a worklife program for its employees and for corporate volunteerism.