Sorry, Mike Bloomberg: Don Graham isn't interested in selling The Washington Post
First, of course, Bloomberg would have to convince [Washington Post Company CEO] Don Graham that he should sell. The paper means a lot to the Graham family, so it’s not a cinch. But the steady stream of bad business news coming out of the company is enough to persuade anybody to sell the newspaper division.
But Graham sure doesn't talk like a guy who's open to shedding a troubled business. Speaking earlier this week at Fortune's Brainstorm Tech conference in Aspen, Colo., Graham got laughs for thanking the conference for having "seen fit to reach out to the newspaper industry for technology advice." He also said adding a paywall to The Post -- one possible way to inject money into the operation -- wouldn't make sense:
Well, we're not fervent, but it just fit into our circumstances. The New York Times or Wall Street Journal, very intelligently, can say we're going to charge, but we're not going to charge you if you subscribe to the newspaper, and you can subscribe to the Wall Street Journal here in Aspen, or pretty much anyplace in the country.
The Washington Post circulates in print only around Washington, D.C., but way over 90 percent -- I think over 95 percent of our Internet audience is outside Washington, D.C. We can't offer you that print or online choice. So, the pay model would work very differently for us.
And, you know, so circumstances have made it so we are the one great news site, stemming from a company with a big news room, that's free at this point, and we're going to try to make something of that.
The conference opened a small window on some of the ways Graham seems to be trying to "make something" of the Post's odd circumstances. He appeared with his daughter Laura O'Shaughnessy, the CEO of the Post-owned advertising agency SocialCode, and her husband, Tim O'Shaughnessy, the CEO of Living Social. In talking about how those companies work with advertisers, Graham said the Post's print ads serve one purpose -- "If you want to buy an ad in tomorrow's Washington Post, you want to buy an ad to sell shoes, you will sell a lot of shoes" -- but that SocialCode is not about selling shoes.
What Social Code does, Laura O'Shaughnessy told the conference, is "work with Fortune 500 brands to help them create these really targeted communities, and then reach out to engage those communities and then convert them to whatever action they find most valuable. So, whether it's watch a video about my new car or sign up for my credit card or whatever that happens to be."
Graham also said products like Trove and Social Reader show the Post is playing long ball on digital transformation.
There are plenty of other social readers, but we thought it was interesting because there is a subset of people, it isn't everybody, it certainly isn't most people my age, who say, gee, Laura read that story, Tim read that story, that means I'm that much more interested in it. And I think that's truer of younger people than of people my age. ...
Social will be a part -- only a part, but I would say a rather important part -- of news sites in the future. You'd be crazy to build a news site today without a social component.
More interesting, though, was a discussion of Living Social's IPO. "[Y]ou know, an IPO is an event of what? Six months," Graham said. "The management of a company by a founder, in this case, can be something that goes on for years and decades."
Poynter business analyst Rick Edmonds wrote earlier this month that a "sky-is-falling-in" piece about The Post's troubles excluded its profitable cable and broadcast divisions, and that Graham expects its Kaplan subsidiary to bounce back from a government investigation. Also, he wrote, Graham's poured money into ideas that might help it through these dark days, abandoning lots of things that haven't worked:
Exact numbers are not available, but all this adds up to a substantial investment in R & D, the kind the industry is often accused of failing to mount. And the company is willing to operate the Post at a small profit or break even, losing a little money some years, during this protracted period of digital transformation.
Maybe Graham's spirit will break at some point (in my experience, watching Social Reader posts pop up in your Facebook feed could help that process along), but it doesn't seem likely he'll give Bloomberg his chair anytime soon.