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Investing in the Web

Dean Baquet

Former editor, Los Angeles Times

Dean Baquet

In general talking with people about the future, they all talk about the Internet. Newspapers have to get some way of making Internet pay. Why [is it] the L.A. Times appears not to have had as big an investment in the Internet as The Washington Post or The New York Times?

I think The Washington Post first, followed by The New York Times, were really quick to embrace the Internet. I think that a lot of other newspapers, including the L.A. Times, were slow. ... I'll own up to that. ... Journalists were slow to embrace this thing. It felt odd. It felt like this thing had different deadlines. Who really reads it? We're all middle-aged. I mean, I'm young for an editor of a newspaper, but I'll be 50 soon. So we were slow to embrace it. Business sides of newspapers were slow to embrace it, too, because they ... didn't see how they were going to make money from it. So we were slow. I would own up to that. I suspect that Tribune Company would own up to it, too.

But my God, what a good thing it is now once you embrace it. First off, it feels just like the afternoon papers I started for. You get the story; you put it up. I like that. That appeals to the competitive part of me. I get e-mails now from people all over the world who read stories that they like, who read stories that I like sometimes, too. I have readers I never would have had. I have readers I never could have dreamed of having. When we do a big story, we have more impact than we ever could have had. I'm speaking as a journalist whose job it is to disseminate information. It's the best thing that's ever happened to us.

It takes away all of the boundaries, while we still get to maintain this thing we love, which is the paper on paper. I have no doubt, because of the way the capitalist system works, that the people who own newspapers will figure out a way to profit from it. Some newspapers have. The Wall Street Journal has, and some others have, too. I'm not that worried about that. I worry about this middle period, this interregnum where there's tremendous pressure on newspapers to cut costs to get ready for that future. I'm worried about protecting the institution during that middle period. But I'm excited about the Web, even though [we] and everybody else were slow to embrace it. …

Is the cost cutting affecting the ability to invest in the Web and Web operations?

There are two answers to that. First, the Tribune Company would make the case that it's invested a lot in the business side of Web sites in general. And they should make that case, that they've put money in the digital world, even if they haven't put a whole lot of money in the newsroom's operations in the digital world. I've put a lot of people on the Web because I think is part of the L.A. Times. Have we gotten a lot of financial support to do that? No. It's true we haven't.

... They're not investing in the Web, which is the future of the newspaper. They're not giving you more money for editorial employees to make the Web attract more readers.

That's true, but I'm doing it myself. I appointed an associate managing editor to go over to the Web site to run the editorial portion of it. I've put writers over, and I have more reporters doing stuff.

To be frank, you can't separate the future of the Web from the future of the newspaper. People will read because of the way we cover the governor's race or the way we cover the war in Lebanon, and it's my job to make sure the Web does that as well as the newspaper does, to make sure that they're still holding hands and working together. ...

Lauren Rich Fine

Managing director, Merrill Lynch

Lauren Rich Fine

[Former Los Angeles Times editor] John Carroll wants to preserve some kind of institution that will employ a lot of people to go out and turn up the news for the good of society, he would say. He also said he doesn't care ... if they're necessarily print newspapers in the future, if all of those can be supported on the Web. The problem is he doesn't see now how the Web has a financial model to support them.

Well, the Web should have a financial model, because it's all about aggregating eyeballs and selling advertising around it. ... So the margins can be as good, if not better, because of the cost structure not involving that arcane production equipment or people who have to physically deliver the newspaper. And it should allow you to reinvest more into the quality of the journalism. The key is getting advertisers to buy in and allowing the technology to unfold that allows you to target smaller and smaller groups of people. ...

Something else John Carroll told us, which is that he said [that] instead of taking the money out, the profit out of newspapers, that what newspapers should be doing right now is investing all that in the Web.

The newspaper companies are investing in the Web. They didn't initially. When we all first really became aware of the Internet, people knew exactly what was going to happen; they understood. But if you were the editor of a newspaper, you were pretty convinced that your brand would allow you to forestall any economic impact from the Internet. ... What they started to realize was that was not exactly the case; that ultimately consumers were very economic in how they make decisions, so if something was free online, they were going to try it.

We saw a complete reversal a few years into the birth of the Internet, where most companies really did put all their classifieds online, and they wanted really solid Web sites. They haven't completely kept up. I think at this point they're afraid to invest because they feel like it's changing so quickly, they're not quite sure where to spend their money.

But we've seen a completely different strategy: They're investing in Internet companies themselves. So Gannett, Tribune and now McClatchy [companies] commonly own a company called CareerBuilder, which is giving a real run for its money in terms of trying to become the de facto online site for help-wanted advertising. ... So I've actually seen a complete reversal where they all are making newspaper investment. Of course, sitting on the side I'm sitting on, I'm trying to understand, is there going to be a good return to what they're investing in?

Some papers, like The Washington Post, have made a lot of money in a slightly more traditional way, for example, owning Kaplan. That's been very successful for them.

The Washington Post [Company] and Scripps both embarked on a very different strategy than their peers. ... Washington Post years ago bought the original Kaplan franchise that most of us remember in terms of studying for SATs, but they've transformed it into one of the really more successful lifelong learning companies in the country. They own assets ranging from SCORE!, which are centers that you take your children to to enhance their reading and math skills; ... they own for-profit post-secondary education schools; they've got the only accredited online law school. They've really invested overseas as well, so it's really been tremendous. It's added enormously to the growth rate, and it's allowed them to maintain their editorial quality at The Washington Post newspaper, where I think they've got probably the lowest margins in the industry. ...

E.W. Scripps is a company that was a newspaper and television company, recognized that those are all going to be good businesses -- they generate cash -- but they weren't going to grow at a rate that would cause people to want to own their stock. They invested heavily in cable networks, and they've got some of the most profitable, high-growth, high-rated networks -- Home & Garden TV [HGTV], Food Network -- that they've leveraged even further. Now they've got a major presence on the Internet as well. They seem to stay one step ahead of the curve. That's one where you buy it and say it's OK that they own newspapers and TV, because I know I have a smart management team that's looking into the future. ...

David Hiller

Publisher, Los Angeles Times

David Hiller

Is the money you're saving by doing layoffs or buyouts going to go into the Web site?

Well, I haven't done any buyouts or layoffs, but we are -- I think we're going to be moving people; I think we'll be moving dollars. Also, what we need to do -- and this gets a little lost sometimes -- is we need to retool basically everything we do in the newspaper so that it works for the Web as well as for print. ...

One of the biggest things we're going to be doing is basically transforming our print newsroom so that it's across every desk, producing news, information and content that can be used across print, online, wireless, video, you name it. We were behind on that. That's another area where I think over the last several years we could have been doing more. That's a more interesting and fruitful focus than this issue of, if you pardon my going back to this, this [canard] of cuts versus no cuts. …

But Mr. Carroll has said it's not just an issue of cuts; that he wasn't given the resources he needed.

I think John's selling himself way too short. He had command of all the troops in the newsroom. If there was stuff that could have been done, I'd ask John why it wasn't done. Why wasn't it done? And don't tell me it was because he didn't have the money. He had the biggest newsroom in the -- short of The New York Times. Whatever he did or didn't do with it was something that was entirely within John's hands. …

You're saying that Jeff Johnson and John Carroll, and later [former L.A. Times Editor] Dean Baquet, had the ability to take resources and rebuild the Web site, do many of the things that you want to do, but they chose not to?

I don't know. I wasn't here. You'd have to ask them. All I know is they had an enormous amount of resources in the Los Angeles Times. I've got an enormous amount of resources in the Los Angeles Times with my colleagues here. That's what we're going to be doing. We're reallocating; we're rebuilding; we're growing the Web site. It can be done, but you've got to be focused on doing those things that make the changes to take you forward. …

When you say Dean Baquet was unwilling to do the kinds of things that need to be done, and he says that he was unwilling to preside over the destruction of what has been a great newspaper --

Yes, well, history will judge how we do. I'm convinced that we're going to take the newspaper forward and the Web sites forward, and at the end of the day people are going to say, "These great people of the Los Angeles Times did a superb job navigating the newspaper business into the future." That's what we want them to say at the end of the day. …

What will it look like when you finish your redeployment of resources and cuts?

The vision at the bottom is, people are going to say, well beyond our 125th birthday this year, that the Los Angeles Times and its Web sites and its related products are the best, most important source of news and information I get in and around and about Southern California; that they're going to say, the greatest days are still here and ahead of us; that it does a wonderful job of bringing together this sprawling, diverse set of communities that is Los Angeles …

I think print is probably going to be a smaller part of it. I know the Web is going to be a much bigger part of it. There may well be other products in the marketplace, including products that do a better job than we're currently doing addressing the Latino community. I think [Hoy, Tribune's Spanish-language daily paper], is going to be a major presence for the Spanish-speaking Latino audience in the community. There may be additional print products like we've done with The Envelope that addresses the entertainment news; Calendar, which is what to do, where to go, plan-your-life thing. ...

I'd like to hear about your Web plans. ...

We've learned a lot. We're 10 years into the Web, so we see a lot of what works and what people like to do, and we've got a great opportunity to blend the best of what newspapers do with the best of what the Web does. So in all sorts of areas of our coverage, whether foreign, national, local, we have the opportunity basically to host on the Web a sort of edited conversation, if you will, where we take what we do best in terms of content and use that as the basis for communities of interest focused on all these different areas.

Think of it as a marriage of the best of the Los Angeles Times with the best of MySpace; that you'll get community and interaction and chat and conversation, but it's sustained and directed and built up, if you will, off really great, edited content and reporting from the Los Angeles Times.

So you'll see that, for example, people are very interested in all the great critics and commentary we have in the area of entertainment and what's going on and movies and the entertainment business, as well as locally where to go, what to do, those sorts of things. That can then be the basis of both content that's interesting and draws people in on the Web as well as the foundation for a great, spirited community conversation online among all of the users. So you get a combination of great L.A. Times content and user-generated content, and it becomes the gathering place in cyberspace for people who want to know and do anything related to Southern California. ...

Does it mean the Times won't be competing with The Wall Street Journal, etc., on every major story?

Oh, I think on the major stories, particularly the ones of most salience here -- for example, this is the entertainment capital of the world, so we need to own entertainment, and we'll do entertainment better than anybody. We do it now, and we'll continue to.

We're going to continue to have a major foreign reporting coverage. We're one of the best at it currently. But one of the things we may emphasize, for example, is the unique role that Los Angeles has as the gateway to the Pacific Rim. That's a part of the story that's different here for the West Coast and for Los Angeles than, say, it might be for an East Coast paper.

But you know the concern: The Times has bureaus all over the world. It's one of the few papers that gathers information that way.

Yeah. My plan and expectation is that being a world-class provider of foreign and national news is going to continue to be one of the hallmarks of the L.A. Times.

But with fewer people?

Well, I don't know whether it's going to be with fewer people or not. There you go again, to say being focused on the numbers of people and not on the quality of the coverage.

But who does coverage? I mean, people do coverage.

Well, people do coverage. Yeah, people do coverage.

So that's why the focus is on how many reporters do you have working a particular story. ...

Yeah. Well, you said it well. My priority wouldn't be to have as many people as I can. My priority would be to do the best possible job for our readers and online users in foreign and national, and we're going to continue to do that. …

You don't see cutting back on the international bureaus in the coming years?

Well, we're not giving up any commitment to our foreign and national news, which is very, very important to our coverage. I don't have a specific view on levels or locations of bureaus or levels of personnel after the six weeks or so that I've been here. ...

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posted feb. 13, 2007; last updated feb. 27, 2007

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