• 
• Some highlights from this interview
• Is what's happening to the newspaper industry comparable to the auto industry?
• Assessing the state of online journalism today
• His advice to the Los Angeles Times
• Building MarketWatch's credibility

As president of CBS Digital Media, Kramer oversees CBS.com, CBS SportsLine.com and CBSNews.com. He previously founded MarketWatch Inc. after spending more than 20 years as a reporter and editor. This is the edited transcript of an interview conducted on Nov. 27, 2006.

... Is what's happening today with newspapers similar to what happened to television news?

Yeah. There's a changing economic model. That's one of the problems, and newspapers are having a hard time adapting to that and understanding it and filling in the holes. The '80s ... was the beginning of the decline of the ratings of the evening news programs -- the birth of CNN and of the cable news outlets starting to come on, multiple places people could get news and information. ...

So the Web -- same thing -- is even more sources of news. So TV is having to deal with the Web itself also. Newspapers really had to deal with the Web earlier on because the Web didn't really bring you pictures. It was still largely a text medium for the first several years, so newspapers learned about the Web and understood what it could do earlier, I think, or started to understand what it could do.

Ten years ago [it started].

Yeah, I think so. And you could see why certain forms of news worked better in that environment -- news with [a] short shelf life, things like that. It did change a little bit how we do news journalistically. It did place a higher priority on real-time news, meaning people's expectation of a story on the Internet was that it was correct because it was supposed to reflect all the information you knew right up to that point, ... whereas a newspaper, well, you print it, and people might believe that it's accurate to the moment it was printed, but that things could have happened since or did happen since, and you wouldn't really know it until the next day. ...

So it was another challenge to newspapers. ... If the advantage was that the newspaper story was longer than what you got on TV or more detailed than what you can get on radio, that was no longer the case once the Web came around. It could be even longer or deeper.

The news hole is endless.

It was an endless news hole, and the storytelling process changed, and it's getting even worse for newspapers, because now you can incorporate all of the elements of storytelling -- video, audio and depth -- into any story you want. You can make it as deep as you want and not affect the viewer who only wants to see it for 30 seconds. ...

“The Web has to be the pulse or the center of a lot of news organizations that it isn't the center of now...”

The other challenge, the bigger challenge, though, is the economic underpinning of newspapers is shattered. The support for large news organizations that newspapers had came from advertising. Over the years, the percentage of revenue that came from advertising grew and grew as the circulation price stayed the same. ...

So you had the newspapers dealing with a couple big problems. One is several sources of revenue like classified advertising, which really have no tie to news, were supporting news operations because the delivery mechanism was the same. The newspaper that people used to get news, was how a classified was delivered to somebody, was the cheapest way to reach a mass audience with that information. That's no longer the case. So there is no real tie between news and that advertising, and news people don't really understand that. ...

But let me take you back for a minute through this. You came out of newspapers. ...

Yeah, as a reporter. It was the most exciting time in my life. But I equated my first year or two in the Internet as the same thing. Running, building an Internet news organization, I was, like, reborn. I felt the same way I did as a young reporter for the [San Francisco] Examiner in the '70s.

I think it goes to the roots of what is it about journalism you like, and for me it was telling stories. I like being a storyteller. I like being the first one to tell you that something happened and what it was. I like to be the messenger. ...

When I wrote for The Washington Post or the Examiner, if I wrote a front-page story, a couple weeks later I might get a couple letters in the mail saying, "Hey, great story." … The first six or eight months [at] MarketWatch, I remember writing a column about something, and I had 400 e-mails by the end of the day. It was a mildly controversial column, ... and they started coming minutes after I wrote it. I said: "This is something to be treasured. This is wonderful. This is reinvigorating the whole process of telling stories. I mean, I'm really reaching people." I felt like I was. I may not have been reaching any more people than I reached with The Washington Post or the San Francisco Examiner, but I was engaging them. …

A newspaper needs to understand that it isn't just about transferring the reader from a piece of paper to a screen of some sort of a portable device. It's about the process itself. It's much richer; it's much better; it's much more interesting, and it can deal with questions anybody has. ...

Well, let me take you to that period of the late '90s, MarketWatch. So the Internet's expanding. You're in that process, and you're in the financial markets. But there's no editor; there's no quality control about what gets on the Internet.

… Well, in our case there was, and because of that, we made it as a medium. People built a trust in us. I grant you -- you're absolutely right -- the initial days of it were Wild West, and a lot of people lost a lot of money because they didn't understand the difference between news and press releases and other information as it was presented on the Internet. ...

Particularly in the financial world, you had people like Yahoo!, who were not news people at the time, create a news site. They didn't know the difference between a news story and a press release, and they put them together in the same list. So you'd go to the headlines about a company, and you'd see these various headlines -- you know, earnings up 50 percent -- and that would actually be the headline on a press release, not on the story about it. Sometime later would come the first stories that say revenues down 30 percent, Duluth plant going to close, and, by the way, earnings are up, but that was artificially done. You wouldn't get that kind of scrutiny until it was too late.

So a lot of people who are unsophisticated about news got burned because they traded on information that was really coming from people with a vested interest, not from journalists who had no vested interest other than bringing you the truth. So there was a period of time that was a learning process in that area. I'm not sure that that's done yet in other areas. It just happened in financial first.

We looked, and on Google News, there are 21,000 press releases.

Right, and that's what you're going to get. Now, if it's identified as such, that's fine, as long as you can get to the stories and you can get to the press releases and you can see the difference. ... There's good information in press releases. ... The fact is you might read a story and say, "I don't know if I'd come to the same conclusion; I wish I could see those numbers," and you can. ... It's an unbeatable source.

The only reason it doesn't totally dominate newspapers, too, is [a] form factor. I mean, newspapers for themselves are easy to carry; they're portable. They don't need electricity; they don't need a lot of things. And there is a serendipity to them that people like. They like having a front page or any page where the first sense you get from that editor isn't necessarily each story as it's written but how the story's placed or if the story's even being covered. ...

So you learned a lot from a newspaper, too, and that's the thing that's most endangered, not the transmission of news. I think kids today are maybe the most informed generation in history, but I think the ability to bring them things they're not asking for or they don't know about or to educate them, which was a function of newspapers, is harder to do on the Internet, where it's easier for you to home in and get what you want and shut out things you think you're not interested in.

But by definition, enterprise reporting, investigative reporting means presenting to an audience information that they were not aware about and might never have thought about.

Correct. So that is a danger. On the other hand, I think institutions, the public institutions where we elect officials, are always of interest. People want to know what the president is doing, and if we can put reporters out there and investigate some division of the government, whether it's the Commerce Department or, you know, contracts are being letted or a deal's being made in the FCC [Federal Communications Commission] to change ownership rules in the media, I think there is an interest in those things, and doing reporting on them is still valuable, and could still generate the kind of journalism you're talking about.

You know, television, even though it had less and less time to devote to news over the years, still did invest in people to do long-term and investigative reporting, whether we put it on 60 Minutes at CBS or 20/20 [on ABC] or whatever else. Fewer of them existed 25 years ago. More of them came; they became a hit ratings success, and that helped news divisions, I think, to some extent fund what they're doing. But they didn't do them as part of a 30-minute broadcast at 6:30.

No, but what's happened is that the squeeze on the marketplace of television, the narrowing of its audience, the content of a lot of these magazine shows has gone downmarket to do stories that you would never consider --

To get ratings.

Right -- that you wouldn't consider to be news.

The ratings issue is an interesting one, because this is the chicken-and-egg problem. Do you do stories that taste good, or do you do stories that are good for you? And will people view and read stories that are good for you, or will they read the stories that taste good? It's a never-ending problem.

I used to laugh, at The Washington Post -- every Sunday and many days of the week we'd have a story that would start on the front page down in the corner, and it would be two columns wide and there would be a headline, and then there would be a jump, and you'd open up the page, and there would be two pages on the inside on this story. ... But the reality is most people didn't read all those stories. They wanted those stories to be there. They read the lede; they read the headlines. They read some -- depending on their interest in the subject matter, read deeper and deeper into the story perhaps. But most importantly, they wanted to know that The Washington Post was watching these institutions and was devoting the resources to see if we, as the public, were being ripped off in a way that we could never find out ourselves. That's great journalism. ... That's still true.

I still think people want those stories, and I still think Web-based news organizations will do them, too. In fact, I think it's easier because we can do them, and the way we present that story, you can drive somebody deeper and deeper into it, but you don't have to kill 10 pages of newsprint in every paper, even though somebody isn't going to read all that stuff. ...

Well, let's go to a case study, because this takes me right to the Los Angeles Times. The Los Angeles Times was in crisis seven years ago over various ethical questions. There's the Times Mirror merger with Tribune [Company] that takes place. They send out [L.A. Times editors] John Carroll and Dean Baquet. ... It was already a great news organization. The Los Angeles Times wins 13 Pulitzer Prizes, and then they're told, "You've got to make cuts." It seems like here's the ideal of a news organization making $200 million or more a year in profit, over 20 percent profit, and you have to make cuts? What's that all about?

For one thing, clearly there's a dollar issue going on here, and clearly it depends on who owns you and what they're looking for out of the property, how much of what they're looking for is profit, how much of what they're looking for is long-term viability. You never know.

The L.A. Times' ownership changed, all right? And it changed because some people wanted to cash out. People who were willing to carry an organization -- every major newspaper I know is facing this dilemma, where the family institutions that were supporting these institutions, as the generations go on, there's less interest in being a publisher, a proprietor, if you will, and more interest in what does it mean for me profitably as a family member?

They want to make money. They're not really interested in the family legacy.

Right, and even if they are interested in the family legacy, there's an increasing pressure to make more money, because the public markets are drawn into a lot of these things, even though they're privately run; they're run for stockholders. Whenever you open something up to the public and you bring in a public stockholder, you have to worry about their needs, not just your own. ...

Now, no one can sit here today and tell you what the appropriate level of profit is. ... When the economic model gets shattered, you've got to worry about it. You just have to worry about, what do we have to do to stay viable? And it isn't only about profits today. It's about having the economic viability to weather storms in the future, because you don't want to be in a desperate situation. You don't want to be in a situation where it starts going heavily into losses before you can do anything about it, because then ... you have no control over the decisions you make. You just have to make ugly, brutal decisions.

So I don't ascribe the same concern to somebody saying, "We've got to downsize, because here's the economic reality." I mean, I think that's true. My goal, though, would be, as a publisher and as a journalist, to build revenue sources up that allow you to keep a first-class news organization. Increasingly that means you've got to do things other than just print a newspaper.

Well, The Washington Post has Kaplan, [Inc.].

No, no, I mean within news itself. The Washington Post built aggressively, is building an online business, which increasingly is part of its business. Not only is it increasingly an economic portion, but almost as many people in Washington now read The Washington Post on the Web as read it in print. In fact, it might be higher in Washington. It's close. Think about that. We've only had, what, 10 years of the Internet on The Washington Post, and in 10 years they built an audience even within the boundaries of Washington itself of as many people who read it in the print read it on the Web.

But the same thing is true of The New York Times; the same is true of the Los Angeles Times. More people read the Los Angeles Times online than buy it, right? I'm just asking you the newsroom question that we got, the question that John Carroll raised with us and others. We're making over 20 percent profit. ... We give you your 13 Pulitzer Prizes. You look great, you love that, and you're telling us to cut, and every year you're telling us to cut more, and you're cutting to bone. Their complaint, the publisher who got fired, [Jeff Johnson], his complaint was you can't cut your way to success.

I agree. There is a point where that's true. Now, I'm not as familiar with the internal workings of the L.A. Times, but my instinct is that he totally believed that and the editor believed that, and they're the two closest people to it. So as a corporate entity, you have to either back your guys or think you know more about the situation. ...

The company is for sale. I mean, what does that tell you? If the shareholders think the company should be sold, it says the management isn't running the company the way it should, isn't doing what it should with this company, and the shareholders aren't happy about the fact that the best and the brightest people in the company are quitting because they think that the moves that top management's making are damaging.

Well, it's kind of unprecedented to have a publisher publicly disagree with his home office and the editor to publicly disagree in the pages of their own newspaper.

It's astounding. What that says to me is that the management's failed in both engaging its own team to understand what the goals are, or they changed it. They changed the game.

I interviewed the new publisher of the L.A. Times, [David Hiller], who used to be the vice president for development, who still stands behind the original merger, which apparently was his idea. ... When I asked him this question, "What's this about 13 Pulitzer Prizes and cutbacks at the same time? It seems like a contradiction," he basically said, "That's capitalism."

Well, I hate to do this, but I wouldn't build this on 13 Pulitzer Prizes. I would build it on, how does it serve its readers? What is the real value? Not to say that 13 Pulitzer Prizes don't help define that, but the value of that paper to its audience is what's in question here. ...

The L.A. Times is one of the four major newspapers in the United States and one of the few that does consistent international and national coverage.

Correct, absolutely.

Right? They compete on every major story. That's what they're set up to do.

Uh-huh.

It appears that what's going to happen is they will no longer be doing that on a national and international --

And that's dangerous. I agree with Baquet; I think that does cut into what you're supposed to be. ... They're supposed to be a news organization that does compete around the world. That is one of the places, one of the few, but one of the places that watches not just institutions but the result of the work of institutions and watches who we are, reports back, informs the public of what its government is doing, what's happening outside of their sphere of knowledge.

You say it's dangerous because?

If you take just the business elements of this and say, "What's the most efficient way to cover news?," you have, like, one wire service reporter in each town. That, on paper, looks like it's fine, if we were making widgets and all widgets were alike. But in fact those of us in the news business know you need multiple sources of information. You need people as checks and balances. You need as much competition as you can on every possible story. ...

I don't necessarily subscribe to the belief that if newspapers aren't covering this information, nobody's going to cover it. I think it will be covered. ... I think the newsroom in 10 years from now won't be a TV newsroom or newspaper newsroom or radio newsroom; it will be a newsroom. The newsgathering will occur, and it will be transmitted out in multiple ways, in all the different ways you have to, and there will be multiple organizations to do that. But that's the model.

The most expensive part is being on the ground, is having somebody there to see what's going on, to actually report, whether it's a reporter, a photographer, cameraman, whatever it is, a crew, the whole thing. That's what's expensive, so we as a news media have to learn how to monetize the product of the work of those people.

Make money off of it.

Yeah. Well, fund their being there.

... But the fear is that the experienced people in the newsroom at the Los Angeles Times, the institutional memory of the journalism that goes on, the ability to have four people in Baghdad and be one of the only papers that does, will be gone, and you can't build that again very quickly.

Well, you can build it. Let's not kid ourselves here. I mean, you can build great news organizations. CNN didn't exist, what, 26 years ago? It's a pretty good news organization. There are good things and bad things about it, but --

But even CNN today is going the other way. It's no longer a newsgathering organization in quite the way it was before, and it's moved more toward what is called news, but I would call it talk shows.

Sure. The whole news-on-cable television thing is a joke because it's become a ratings war, and it's very little news and mostly talk shows. But that's happened because [of] what's happened on the Web. That's been able to happen because people have been able to get news and information on demand when they want it, where they want it.

So at the heart of every news organization, there has to be an interactive component now. The Web has to be the pulse or the center of a lot of news organizations that it isn't the center of now because that helps you slice and dice information and news the way people want it.

It doesn't prevent you from having editorial control. You can have a Web site where you exercise editorial control, where your editorial judgment is a critical part of what that Web site is. We're not very good at it right now. Look at the news sites on the Web, and they're pretty automated. ...

We have to learn about what works on the Web. People will want their information there; they will get information. They still are information-hungry. They have more time in the day to get it because they're multitasking, and they have more places to get it. So even though we may not sit down and read a newspaper for half an hour or watch a half-hour news broadcast, people 50 times during the day are being given information about news.

But then we see successes on the Web like the Daily Kos, where when we interview the young man, he says, "I don't have an editor; I don't have any standards, so I can do whatever I want, and hundreds of thousands of people come to read me every day."

Yeah, but so what? I mean, hundreds of millions of people look at video on YouTube. Does that make it journalism? He's doing what he's doing. It's entertaining; it's interesting; it's gossip. Throughout history we've had those things. The National Enquirer existed 30 years ago, just as it does today, and ... people read it in huge numbers. I mean, more people read that than almost any daily newspaper in America. Were you worried about that? ...

What is the state of journalism on the Web today?

Oh, I think it's terrific. I think it's improving quickly. It's getting the benefit of all the other forms of journalism, so the good journalism done in newspapers makes it to the Web. Some newspapers and media companies are doing much better at getting real-time information out quickly, so we're not holding up stories for the 6 o'clock news anymore. ...

I continue to think it's not only getting better, but I think it's exceeded the technology at this point. In other words, the ability for us to put out a great report to your cell phone right now, if something big happens, is better than the ability of the cell phone to deliver that video effectively to a viewer in a way they want to see it. So we're actually leapfrogging some technology, and the industry is starting to get it.

The problem is, it took a creation of a MarketWatch to do that in the business world. Every major news organization should have done MarketWatch. CNBC, even CBS could have done it itself, but instead it helped fund it, which was the bright way to do it. It stayed independent, and that's how we got to build a news organization that was ultimately half a billion dollars and is seen by Dow Jones as maybe the way to save themselves. What an eye-opener it is for a company with 1,600 journalists, financial journalists, to spend half a billion dollars to buy a company with 100 financial journalists, effectively the same --

Your company.

My company. The same kind of people, but our company was built around -- entirely, from the beginning -- the concept that you're going to be out there covering this news in real time as fast as possible for your customers and in any media form that it takes, so be ready. You might do TV, you might do radio, you might do whatever it takes, but your job is to be all over this beat and to tell your viewers or readers or users everything you know as quickly as possible. Also, we'll do investigative reporting, we'll do lots of other things, but our mantra was speed and accuracy, and that that mattered to a financial community where stories had short shelf lives. ...

You describe what's going on with the newspaper industry as something like what's happened to Detroit and the Japanese automakers. Is that what we're really seeing here?

I think so. I think to some extent, it's an industry that's moving slower than it should to change, to recognize what its audience wants. What its audience wants is not a newspaper; it's news. And learning how to give that audience the news it wants when it wants it is difficult. It doesn't mean you give up the franchise of teaching them or giving them news that you think is important. You can still do it. But you have to learn how to do it. ... You watch their habits. You pay attention to how people want to get their information, and then you give it to them. But you give it to them in the right way. And over time you build your reputation.

Now, you have a running start if you're an existing media brand. You can have a credibility, a chit that you have because you've delivered news in an honorable and straightforward way over the years, whether it's a New York Times or an NBC News or a CBS News or Atlantic magazine or Harper's. ...

You can take that to the Internet. … But you have to do it, and you have to do it in a way that's interesting. You have to engage people once they're there. You have to make it so that they want to keep coming back. And when that's the habit they form, you've got them. Advertisers will follow; revenue will follow. You still need to own that time.

The worst thing that the situation can be is you lose them to some other source of information on the Web. Then getting them back is going to be impossible.

John Carroll told us that he did an informal analysis. He said given all the cutbacks that are already taking place in television, and particularly in cable, like CNN, he estimates 80 to 85 percent of the new information gathered every day comes from newspapers … and what's threatened here is one of the last news gatherers -- not a wire service, but a news gatherer.

Yeah, but don't you think part of the problem too is the economic structure behind these places? Why should a TV reporter covering the same beat as a newspaper reporter be paid four times what the newspaper reporter's paid? … The economic infrastructure of these places got fat and happy too fast. And when TV got there, the money went mostly to inflated salaries, not to more journalists. …

There are a lot of faults here, there are a lot of reasons for problems here. I think the biggest cause for tumult right now is that the economic underpinning for all these news organizations is changing, and it's changing because the audience is changing, because the audience has access to news and information different ways now. They are much more in command of when they wants news and information, and they can go and get it. And we can't, as newspapers or television or radio, ignore that fact. And if we want to be delivering the news to as many people in 10 years from now, to as many people as we're delivering it to today, we'd better get on these new platforms. We'd better be delivering it, or someone else is going to.

Now, that someone else may have a whole different outlook on news than we do, and that's a danger. But we define journalism as it is today, the industry has defined what it is. We self-police ourselves. The courts police us to a certain extent, but we self-police ourselves by giving awards, by doing all kinds of things. You know, are we rewarding the right things? Are we pushing the right things? …

When we interviewed the CEO of Google, [Eric Schmidt], he said one of the big problems on the Internet today is reliability. It's still a major problem. But his answer is they're developing an artificial intelligence program that will be able to show you news that's more reliable than other news.

They're trying that, and I applaud them for it. It's like saying they're going to build a robot that can do brain surgery. It's an unattainable goal, to me. Doing news and covering news and relaying news is an art form, and it takes study, and it takes editors who understand the public, and it takes a thought process. And frankly, in most news organizations, it's not one person, it's multiple people, and it's this combination of the editorial intelligence involved in a group of people who creates that product. And there is a payoff one way or the other. If an audience likes it, they buy it; and if they don't, they ultimately won't watch or won't buy your paper. ...

We hear from members of the Associated Press, the new publisher of the Los Angeles Times, Eli Broad, who may buy the Los Angeles Times, that they have to start really charging Google or other sites that aggregate this information for their information. They can't give it away for free anymore.

Yeah, it's a fine line. ... In the case of a search engine, if it's just the headline, they can make an argument that they're bringing you a reader, that somebody's going to read beyond that headline and click and go to your site, and we make the money on that and we do all that. ... If you believe that the way the Web is used is search, then you want to be in a situation where search brings you a customer.

Yeah, but Yahoo! is beginning to get into news. It's now paying some money to AP and others, and Google is paying some money as well; they're starting to.

Right. And again, it depends on where are you putting it. Yahoo!, when they pay for information, they put it on their site, and the reason they do that, pay for it, is because they'll monetize it with advertising. When we had a relationship with Yahoo! in the early days of MarketWatch, they just ran our headlines, and if people wanted that story, they clicked on the headline and came to us. Now, you could argue that that's not a very valuable user to us because you only have them for that one page and then they go back to Yahoo!, but one of our goals, as a Web organization, was to put things on that page that got them to go further into MarketWatch. ...

Now, when you're talking about Yahoo! doing its own content to the extent that they become your competitor, you may want to worry about that. Then you may want to say, you know what? Their news site is too good now, and it's got too much of their own content, and they're not driving people to us.

Do you see a conflict coming ... where content providers are going to say to Google and others, "Hey, pay me, or we'll go elsewhere"?

Oh, I think that exists now. Look, the fact is, content costs money to produce, so somebody needs to pay for that. ... That doesn't mean Google can't make some money along the way.

I look at Google. In some ways, in their AdSense product, where they put ads on everybody else's sites, they're performing the same function as an ad agency. So instead of me paying 15 percent to an ad agency, ... I'm giving Google off the top 15 percent for money that they're bringing us, or whatever the percentage is. I'm still making the same percentage of money on that ad that I made before. What do I care if it goes to a company that's building an efficient auction system for that ad versus whether I'm paying it to an agency who convinced Coca-Cola to buy that ad on my site?

So that's what Google's deal with newspapers is?

With Web sites, that's AdSense, and it is similar to what they're trying to do with newspapers and with radio stations -- Yahoo!'s with newspapers, Google with radio stations. Google wants to sell advertising on every platform, using their auction system, which they argue is a more efficient way of selling advertising, any form of advertising -- outdoor billboards, newspapers and who knows? We as a media company, any media company, should look at that. If it is more efficient, then why wouldn't we want to do that?

The case of actual content, we allow them to search our content. We allow them to pull headlines out because it drives traffic to our sites, and that's how we make money on our sites. We make money with advertising on our sites.

Now, if the world goes in such a way that people only read headlines and they stop going to stories, then I'm quite sure our viewpoint of what we would allow them to put up on their site will change. ...

Is the Internet in danger of destroying the content providers?

No, I think it's not. I think in the long run it's helping match the audience to the content. Here's the other scary thing for newspapers: When you bought a newspaper, what did you buy it for? When you stop to think [of] all the people that bought a newspaper last week, did they buy it for the front page? Did they buy it for the movie listings? Did they buy it for the furniture ads on Saturday? Did they buy it for the classifieds on Sunday? What reason did each person who bought a paper buy it? No one knows the answer to that. I mean, I'm sure there's some research, but it's sampling. No one really knows why. ...

The Internet -- you don't get a page view unless somebody asks for that page. So the efficiency of delivering news -- you really do get a sense of how many people are reading a news story, not just how many people bought The New York Times that day. If The New York Times' circulation is 1.2 million, there are no stories where the answer will be 1.2 million people read that story. It will be fewer, and the scary thing is that the stories that are read the most are the type of stories that will continue to get done the most, and that we lose that thing of bringing people stories that they don't [want] -- and that's what you're worried about.

Well, not worried about it. I'm thinking there are institutions in society that newspapers examine, from law enforcement agencies to major corporations, that are powerful. Who is going to pay for that kind of reporting?

Oh, I think a lot of people will. I think a lot of people will. You're confusing the fact that the Internet's really good right now for fast news, short, fast news. That is what it's doing, compared to the other medium, but it's also really good at in-depth [coverage] and really good at the ability to give you a ton of information about something you're interested in. ...

So you disagree with Eric Schmidt, who said to me that there's going to be less investigative reporting on the Web, eventually.

... I have a higher confidence level that there will be. I think there will be. I think there will be a market for it. There is an audience for it. And consequently people will do it and get paid to do it. You've had audiences for niche publications that for years have supported a certain kind of investigative reporting, right? There have just been magazines; there have been different forms of journalism; and there have been TV shows like 60 Minutes, which on their own have been supported either by advertising or by subscription. So there is an audience. There will be an audience for this news. The audience doesn't go away. We just have to effectively give it to them. ...

Dean Baquet says the real enemy here is Wall Street. It's the pressure from the shareholders, from the investors, and they don't care whether real newsrooms are destroyed or not.

Newspapers aren't alone in that problem. Wall Street, the continuing pounding pressure for quarterly return, has an enormously stultifying effect. It was a terrible thing for companies to have to perform in a short-term way to please investors. And it caters to short-term investors as opposed to long-term investors.

When you were saying that, I could see that there's, like, an emotional thing going on. You're remembering things that happened to you?

Sure. Yeah, of course. I mean, I went through, I don't know, eight years as a public company CEO. There was a moment in time a year or two, three years maybe before we sold the company when we were up to almost $40 or $50 million in the bank. We were profitable and cash-flow positive in a big way. I couldn't spend it because we had just turned profitable, and now the expectation was we had to grow that profit from that point on each quarter. So I couldn't spend money that would hurt profitability.

But improve the product.

But improve the product. And it was easier for me to do an acquisition because it was not being spent on operations. It was effectively not a P&L [profit and loss] issue. It's what drives companies to do acquisitions instead of building things themselves. You know, it's harder to build it yourself, and the public, if you're a publicly traded company, freaks out.

I always marveled -- a lot of people underestimate how much impact [USA Today founder] Al Neuharth had in building USA Today.

And the Gannett chain.

Well, particularly I'm talking about USA Today now. Here was a guy who built a national newspaper who spent $2 billion before he made a penny to build what is arguably a national institution today, right? Love it or hate it, it's read by a lot of people. ...

He had to finesse it through a corporate structure, and he had to show quarterly profits during the entire time he did that. The way he did it effectively was he got every one of the newspapers in that chain to pay for the building of USA Today. They donated reporters; they donated facilities; they did all kinds of things. ... He had to borrow and penalize the papers, which was an enormously difficult thing to do and painful thing to do.

But he did it. That thing was a $2 billion drain on that company until the day it became profitable 10 years later. So appreciate how hard it is in the public domain, where stockholders are coming after you to have to show those quarterly numbers and build something at the same time. There could have been 10 USA Todays if you didn't have to deal with that.

So to the public interest perspective, to the editor who says, "I serve my readers before I serve my shareholders," Wall Street is the enemy?

Yeah. Well, it's a constituency you've just told is second in line or third in line. How would you like to be told that if you put your money into that company? I'm with you. I'm just telling you shareholders are people, too. ...

So are we going to wind up with one less national and international newspaper, do you think?

Possible. I hope not. I hope what happens there is that they manage the transition, and before they have to gut the place, they find ways to build incremental revenue streams to help fund what they're doing. So while I believe that the funding from strictly newspaper advertising revenue will not grow, and therefore is not going to support a growing organization, they can still grow revenue. They can still grow revenue online; they can still grow revenue other ways. ...

And to some of your friends and colleagues, former colleagues, at the Los Angeles Times, what's your advice?

Look, what they do at the Los Angeles Times is great journalism. Keep doing great journalism, but spend some time learning and understanding how consumers are getting their information, their news. Implore your management to go after audience, to do audience research to understand where people are getting news, and make sure you're giving that news to people where and how they want it. Find the ways to do great Web journalism, and if that means changing how you report that story, change how you report the story. …