“Can the Washington Post survive?”

From Fortune:

    The Washington Post, a first-class newspaper that dominates its local market, has the best shot of any at reinventing journalism for the Internet. Since the mid-1990s, the Post has plowed many millions of dollars into its interactive unit, taking readers to unexpected places. They can join a lively global debate about religious faith, read hyperlocal coverage of a fast-growing Virginia county or watch daily video programs from the digital magazine Slate. …

    The problem facing Graham is easy to understand but hard to solve. The pillars of the Post, revenues from display and classified advertising, are declining faster than its Internet business is growing. For the first five months of 2007, total ad sales, including print and online, are down by 12 percent. Other newspapers, too, are reporting sharper drops in ad revenue lately than anyone in the business had expected.

    Profits are shrinking too. Operating income for the Post Co.’s newspaper division fell from $125.4 million in 2005 to $63.4 million in 2006. (Most of the decline was caused by a $47.1 million expense for early-retirement buyouts.) In the first quarter of 2007, operating income for the newspaper unit fell by another 53 percent. …

    Finally, the Post is published in the most affluent and educated region in the country; in the nation’s capital, much of the business that gets done depends upon the news. Here’s the point: If Graham and his people can’t build a business model for journalism in the digital world, nobody can.