donald graham : But I don’t think the most optimistic people at the post would differ that we’ll be somewhat closer to The Globe than to The Times. -

But I don’t think the most optimistic people at the post would differ that we’ll be somewhat closer to The Globe than to The Times. Our aspirations are quite a bit higher than that for ultimate pay readership. But it looks like it could make a very big difference at The Times because the scale of opportunity is there. It should be a plus for The Post if we execute it right. I think we will execute it right, thanks to people I’ve talked about. Steve Hills and Katharine Weymouth have really thought this through. They are not doing it the way everybody else did. They’re doing it in a way that’s well suited to us. It will be successful but I don’t think it will be a huge difference maker.

John: You mentioned classified and your focus on that. Can you just talk a little bit about what you saw and how it played out? The big question that everyone seems to ask themselves is could the newspaper industry have done anything differently, and what would it have been?

John: With the help of an elderly journalist I know at a large business magazine, I got some history of things that he said about the newspaper business over the years, which is all online, by the way. I didn’t know that.

Don: Oh, yeah. He knows and I know. We sat successively on the boards of three companies, one of which is still in existence. One called New Century Network, which consisted of the very smart representatives of eight or nine companies, each probably the smartest person within that company, sitting around a table, I think all eight of them under the impression that they were going to run the business or that their ideas were so much better than anybody else’s that they should prevail. Then they would go back, and they’d review the plans with the CEOs being asked to put up all kinds of money to fund these investments, and the CEO would say, “I don’t want to do this. I want to do that,” or “Is this guy running the place any good? Let’s put in this better person I know.” The poor people. We saw the potential of a merged news site, and I think, in retrospect, what we should have done was leave you guys out. I don’t think that would have made much of a difference, but…

One of the questions that faces places like the Times and the Post, but I want to come back to local newspapers broadly, is is there any kind of a plus to a news organization in having really high quality reporting and editing? I’m pretty sure the answer to that is yes, but we have not figured out. One thing that we did, saying we wouldn’t, understanding that it was a mistake, was we now probably have a website that’s 60 percent newspaper articles and 40 percent other. In 1995, we had one that was 99 percent newspaper articles and 1 percent other. We all read a big experiment conclusively proving that reading newspaper articles is not the highest and best use of the web.

Don: Alan and Ralph knew Steve and Ted Leonsis very well. They knew Steve, early days when AOL was a struggling third. I remember we took one trip to Columbus, I can’t remember who I took it with, to look at Compuserve and talk to the H&R Block people. Compuserve had a very sensible model, which is business customers and business information. AOL was always viewed as a struggling third. I, myself, was a very late adopter. Alan was so engaged personally in PCs, I didn’t think I could add anything. I was a late PC adopter, and I can’t remember the year, but when I became a user, I immediately became a heavy user through AOL. AOL was my first email address. It was everybody’s growing up experience, including accessing the Internet. They were the logical partner for us to try to do things with electronically, but they had a dually high sense of their own worth. It was very hard. You had people bidding to make a deal and it was hard to make a deal, and it should have been hard to make a deal.

The other question we didn’t solve, at the beginning, was making the ads work in both media. The print ad in The Post or The Times or The Boston Globe or The Philadelphia Inquirer, still drives the shopper into Macy’s. I guarantee you the print ad in The Post does, with its, again, still very broad penetration of upscale people in Washington.

Don: AOL, people disproportionately spent their time on chat rooms. They spent their time, certainly, on email, but it made it obvious that this was going to be a mass medium and that it posed both threats and opportunities. Alan and I were united in feeling, “We don’t want to just treat this as a threat. We don’t want to play defense. We want to see this as a big opportunity.” And we had Ralph. We were kicking tires on a lot of investments, start ups. And we had great luck in the early days. Ralph was a very good judge of teams and judge of founders.

Don: Bloomberg is different. Bloomberg’s business is selling Bloomberg terminals to financial institutions and financial investors around the world. When they went into the business, they were competing with John’s old company, Dow Jones, and they were competing with Reuters. Both those organizations not only provided tons of data, they provided stories. When General Motors released its quarterly earnings, somebody quick filed a story on what the earnings were, how they compared to what anybody expected, and so on. Bloomberg had to sprout a news division, and did. It isn’t where Bloomberg makes its money, but it was regarded by Mike as a necessary part. You know more about this than I do.

Don: I will. But since Huey’s here, I have to tell you my initial story that I’ll forget to tell you otherwise. Martin knows very well, the other two of you know pretty well, a guy named Alan Spoon, who now lives up in Boston, near you.