Shareholders Day
November 15, 2002
Following are transcripts of the presentations made at The Washington Post Company's Shareholders Day on November 15, 2002. The transcripts have been edited and contain clarifications.
The presentations at this Shareholders Day meeting contain certain forward-looking statements that are based largely on the Company's current expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. For more information about these forward-looking statements and related risks, please link to Risk Factors under Shareholder Information on this website and refer to the section titled "Forward-looking Statements" in Part I of the Company's Annual Report on Form 10-K.
QUESTIONS AND ANSWERS
by
MR. GRAHAM and MR. SCHROEDER
MR. GRAHAM: Okay, Chris. I've got a few questions for you, and if you have others, please pass them to the aisle.
Since the Internet reaches national and global, can you extend job ads and other ads far beyond the Washington area?
MR. SCHROEDER: The answer is not only yes, but absolutely. We have to look at it very, very seriously. Again, my original focus on the recruitment side, as Don alluded to before, is that we want to be of and part of the Washington market because that is where the money is, and that is where the audience is. And if we are very, very good locally, we could almost cut a deal with any national player to participate in larger national audiences at that point.
In terms of globally, international, I think there's significant opportunities. On any given day, depending on the news story, 5, 10 percent or more of our audience may come from Europe or Asia. So, clearly, something to explore.
MR. GRAHAM: Who designs your Web interface? What's the percentage of screen space used for content, not logistics or button bars? I bet it's 30 or 45 percent. Why is it so low? What are you doing to give more space for content and improve your website's presentation?
MR. SCHROEDER: We can always improve the website's presentation. I have to tell you, the single most drive-me-crazy anecdote I'll hear in focus groups or talking to people is I'll talk the way I just talked today, and someone will say, Well, I didn't know you had that on washingtonpost.com. And that just tells me that, from a user interface perspective and from presenting the information we have, we can always do a better job in that regard.
I don't have a percentage of what's the right amount of content versus the right amount of places where you look to click. You know, we look at that all of the time, and we're constantly looking to evolve it in that regard. The fact remains two things:
One is I need to offer a consistent experience, by which you can find easily that which matters to you or you'll go somewhere else quickly; and, secondly, a large part of our traffic actually comes to us first at the article page, not at the front-page level, and so I have to make our article pages, which by the way our majority are just content, so accessible to you that you can look at an article page like a home page, so that you can find what you want from there as easily as you do from the home page.
MR. GRAHAM: Is it true that Baltimoresun.com makes a good profit? And if this is so, what do they do differently?
MR. SCHROEDER: I don't know specifically about the Baltimore Sun, per se. I do know, at least from what I've been hearing from reports, that the Tribune overall, which includes the L.A. Times and Baltimore, among other newspapers, will be making a small profit this year.
I alluded to this a little bit in my answer before. They have an opportunity to have one cost structure or at least relatively one cost structure which they can leverage in many different markets to get local advertising revenue right there, which aggregates quite nicely to them.
I believe we're much larger in the Washington market, and certainly in our audience, but in our dollars as well, and now that we're the new guys in the national game, and those dollars are increasing at 50 percent, we'll be able to do catch-up I think very well to the other sites.
MR. GRAHAM: If recruitment is flat for 2002, have unit prices declined while volumes increased?
MR. SCHROEDER: It's a great question about pricing overall, but specifically in the recruitment place, there are some products that we are, in fact, charging more than we charged before because of the quality and the power of what they offer to the advertisers right there. So there's a real opportunity I think in pricing going forward.
MR. GRAHAM: Recruitment advertising has declined because there just aren't as many jobs being filled.
How will WPNI link its content and advertising on PDAs, cell phones, and Y5 [ph], laptops and new-generation devices? How about Microsoft's new Tablet?
MR. SCHROEDER: It is one of the most important questions that we have to be wrestling over here. We were one of the pioneers in putting out some of our content through PDA hand-held devices through Vindigo and other companies in that regard, and frankly had our hands handed to us. Because a lot of people are using these devices, people aren't really paying for it.
In terms of what we build in our infrastructure, we will be device neutral. I don't care what device you have, you will, over time, make sure we can deliver to you Washington Post content where it is, but these are early days right now. There's not a lot of money there in the early parts of it, but we will be there.
MR. GRAHAM: How frequently does the front page change? While reading, I noticed that when I go to a specific article and come back to the front page, it looks different.
MR. SCHROEDER: In terms of what we do in multimedia, which is becoming a very significant part of what we do in broadband, which is video and photographs linked to the stories that we have, those, particularly our photographs, will change almost every time that you come to the site. The other thing that drives how the home page will change is the breaking nature of news, pure and simple.
MR. GRAHAM: Why do you run so many pop-up ads?
[Laughter.]
MR. SCHROEDER: You know, I've convinced myself of something for which I'm progressively convinced users disagree with me, and so we'll look at this hard, that there's a distinction between pop-up ads, which you come to the site and it hits you in the face, and me leaving you something on the screen. I actually do not do pop-ups, but I do leave things on your screen, and I know that's been causing a problem, and I'm going to be looking at it.
The big issue there is how often you do it, and I think we've done a little more this fall. We'll be ratcheting it down a little bit and seeing if we create value. I have to tell you the advertisers themselves are thrilled. The amount of attention and click-throughs they're getting are very, very significant on those.
MR. GRAHAM: Two more questions.
If advertising revenue is the fundamental driver of WPNI, how will you maintain your independence and integrity?
MR. SCHROEDER: Independence and integrity I hope you mean by journalistic standards?
MR. GRAHAM: I would imagine.
MR. SCHROEDER: The standards that we have at washingtonpost.com are not an iota different than they are from the newspaper. It would be over my dead body and the dead bodies of washingtonpost.com collectively that we would do a single thing to compromise it. We do that because of the public trust that we are, and the heritage that we are as a newspaper, and we do that, quite frankly, because it's good business.
People want to come to us because we're trusted, because our journalism is pure, our journalism is not affected. That's important for readers, that's important for our public trust, and it's what makes us a great institution, and not Schroeder.com on the Beltway, who would have no further at all.
MR. GRAHAM: It's my impression that WPNI runs late on the news. What's your usage then? Also, for direct marketing and broadcast advertising, is broadband needed first for capacity and speed?
MR. SCHROEDER: Two very good questions. "Late in news," I'm not sure of what you mean. Do you think they mean by that, that we're behind other sites?
MR. GRAHAM: I imagine so.
MR. SCHROEDER: There have been times, pure and simple, when we've been behind other sites for no other reason than we have a great culture and tradition of The Washington Post and Newsweek, which is learning what it means to be in a breaking medium, and in my view, we've been better at this than ever before, but, frankly, we've been behind others because we didn't believe we had the story.
And I'll tell you this, more often than not, we've been right. CNN has put stuff up there, and they've been wrong, and that's very, very important to us. Broadband is not imperative for you to access the information we have. It's just obviously a lot slower, but that's the difference.
MR. GRAHAM: Last question. How much money did the washingtonpost.com segment lose last year and so far this year?
MR. SCHROEDER: Do you want to take that?
MR. GRAHAM: You know, we don't tell you the profitability of every smaller segment of the company, but Chris described, frankly, that we're losing money. We expect we'll be losing money next year, although about half as much as we are this year, and that offends us, but we are losing money because we are more ambitious in what we're trying to do than other sites. We're swinging for something pretty big.
MR. SCHROEDER: Thank you.
# # #
