In 1996, a political writer and editor who had spent most of his professional life inside the Beltway decided to pack his bags and move to Redmond, Wash., to begin what he had always called a "project." The man was Michael Kinsley, and his "project" was Slate.com, the Microsoft-owned online publication that covers politics and culture with a keen eye and often arch wit.
Slate firmly established itself as a credible political publication, luring top writers and millions of readers. But, though the magazine was popular, it was not profitable: Like many online publications, Slate lost money every year.
A little over a year ago, Kinsley stepped down as editor of Slate. This year, his "project" achieved some milestones under his successor, longtime political writer and editor Jacob Weisberg, who was previously Slate's chief political correspondent. In the first quarter of this year, Slate's revenues for the first time exceeded expenditures -- in other words, it was profitable. In March, the site logged a record 6 million unique users, and in May, Slate won a National Magazine Award for General Excellence Online.
"If we could monetize all the traffic we have, we'd be going gangbusters." -- Jacob Weisberg, Slate editor
Also in May, Slate established new relationships with cartoon strip publisher Doonesbury Town Hall and with National Public Radio. Doonesbury is now carried on Slate. In its deal with NPR, Slate will co-produce a show called "Day to Day" in a first-ever co-producing deal for NPR.
Weisberg attributes these successes to improved market conditions, but also to an aggressive expansion of Slate's content. In the last year, Slate has added a regular TV columnist and music feature, as well as increased its coverage of technology and business. But Weisberg also emphasizes that Slate has survived because it has always been "cheap," operating on a shoestring even through the heyday of the Internet boom.
In an interview at Slate's midtown Manhattan office -- the publication is still based in Redmond, but he continues to live in New York -- Weisberg talked about his first year on the job:
Q: It's been a big first year, with a record number of unique users, becoming profitable and winning a National Magazine Award. What do you credit with that success?
Jacob Weisberg: I tried to do certain things at the magazine in my first year here: expand our coverage in various areas and broaden the scope of the magazine, and I think that's proven successful, and I think that's been vindicated.
The thought was that we really had the coverage we wanted in general in areas like politics and economics, but there were a lot of other areas where our coverage was much more sporadic. We still don't have regular coverage of certain topics, but we now have regular TV coverage, which we never had before. We have a lot more art and architecture. We have a regular music feature, which we never had before. We have much more frequent pieces on food and wine and we started a travel section. These were places where we had the most room to grow. Those were not reasons to read Slate before. Someone who was interested in reading clever pieces about television probably wouldn't have read Slate. They probably would read it now.
Q: Are these moves growing traffic, or taking traffic away from other people?
JW: I don't see traffic on the Web as zero-sum, the way circulation is in print magazines. I tend to think if people read more Slate online, they're probably going to read more of The New York Times online, and vice versa.
At Slate, we try not to be too traffic-obsessed, because our traffic is very healthy. If we could monetize all the traffic we have, we'd be going gangbusters. It's always nice to have more traffic, but frankly, our traffic is beyond what anybody here ever anticipated. And, if your audience is expanding, it's probably not going to improve your demographics. Your demographics have a certain value to your advertisers. So it becomes an issue at some point: Do you want the bigger audience with weaker demographics, or smaller audience with better demographics. So far, the trade-off hasn't been too difficult for us, because for whatever reason, the expanded reach hasn't had a negative impact on our demographics. We've got a big growing audience and our demographics are very good.
Q: One thing your publisher said in the last six months is that technology and fashion tend to be the most sellable areas. Are those areas you're also expanding?
JW: We have expanded technology a lot in the last year. In terms of fashion, it's something we've had a little bit in the past, we really hope to get started in the next year. I think it's a sellable category, generally. I don't know if it's sellable for us. But we're starting it because I'd like to have some sense of that in the magazine not because we have some specific idea that we can monetize it.
Q: Doonesbury expands your content offerings, too. How will this deal work?
JW: We've taken the Doonesbury Town Hall site under our domain. Its traffic is going to Slate, although the content on a daily basis is still controlled by Garry Trudeau. Part of the arrangement with this deal is that we're going to work with Garry Trudeau to develop features for their site that really work for Slate. We'd like to do something for the campaign. In 2000, he had Duke run for president, and they had a whole thing where Duke was interviewed by different real journalists. We'd love to do something like that, but we don't know what it is.
Q: Is the upcoming election the reason why the deal came about?
JW: It came about because Trudeau came to us and they were looking for a home. We're all fans and thought it'd be a very good match with what we do. It's not necessarily a model for more things we're trying to do. And I definitely don't see it as taking over sites. I see it more as a partnership. And, you know, it might be that a few years down the road they'll decide they'd rather be separate. It's another reason for people to come to the site. It's likely to be sticky traffic because you can spend hours reading all the Doonesbury cartoons you missed over the last five years, which I've sort of been doing.
Q: In May, Slate announced that it was teaming up with National Public Radio to co-produce a show called "Day to Day." You don't make money off of this deal. What's the benefit?
JW: You could call it brand extension. We're trying to reach out to a different audience. I think of it as trying to expand and broaden our audience. It'll be successful from our point of view if the show is good. But it'll also be successful from our point of view if people who are not regular Slate readers now get interested in Slate because of hearing the show. And that's really what we hope will happen.
Q: Some people have given you a hard time for his deal, including OJR, which raised the point that there could be some conflicts of interest, mainly for NPR. What do you think of that?
JW: We were sort of infuriated by that, for a couple of reasons. The main one is the idea that -- I mean, we take our integrity very seriously, and the idea that it's somehow corrupting for NPR to work on a show with journalists from Slate, we didn't understand why, just because Microsoft happens to own us, why we're impure in some way that they're not.
I think there are a certain number of people who listen to NPR who are going to hear that a magazine owned by Microsoft is involved with NPR and then think, "My god, NPR is being tainted." But if NPR is tainted, it's tainted by all the funding sources it has to have, from foundations that have an agenda to various corporations that sponsor, including Microsoft. But the idea that partnering with an independent-minded magazine that happens to be owned by Microsoft somehow taints them in a way other things they do don't doesn't make any sense to me. So, I found that just aggravating for that reason. I didn't think the logic was well worked out.
Q: Let's talk about being profitable. That was a really big deal, not just for you, but for the industry. What did that prove, in your view?
JW: It's certainly something we've been working toward for almost seven years. Part of the premise of the magazine is, because we don't have the fixed costs of print, we can run a magazine that is serious-minded and focused on ideas and politics and culture and make it be self-supporting.
Also, we're very lucky to have Microsoft as our corporate parent. But ultimately, we don't want to be dependent on anyone's charity. We'd like the magazine to be viable, it doesn't mean we want to be independent, but we'd like to be in a position where if we were independent, the "project" would be viable.
Q: What do you credit with becoming profitable?
JW: A bunch of things have been happening. The advertising market in general coming back. The Internet ad market is improving. We've been gaining a bigger share within the Internet ad market. Expanding the coverage of the magazine has paid off. In the last year, the site has been appealing to categories of advertising that we haven't had before. I mean, we've had big ads from automakers, we've had big ads from financial industry. We just haven't had those before. I think that -- you know, maybe they just woke up and realized advertising on Slate made sense because our demographics are great and we reach a very appealing audience. But I also think the fact that the magazine simply covers more is appealing to people.
Q: An improving ad market and expanded coverage are really great things, but is there anything else you'd attribute to your ability to achieve profitability?
JW: Oh yeah, we're cheap. We have really been totally focused on keeping our costs under control. We're a very, very lean organization, and always have been. It's to Michael Kinsley's great credit. Even during the height of the dot.com bubble, when people were saying to us, "Gee you could spin Slate off in an IPO and it would be worth $100 million," or whatever, when everyone was saying the model for any Web site was expand, expand, expand, worry about profits later, Kinsley didn't believe any of that. And we didn't expand at all. We've stayed nose to the grindstone on our original goal, which was to become profitable as soon as possible.
There was a culture around any Web site then, but we've been through quite a few cycles now -- total skepticism to euphoria, back to something like total skepticism to now, where I think we're approaching some state of normality. People are realizing this is a business like any other and has to follow the same rules. And advertising, which is very conservative in a lot of ways, is really starting to come around to the Internet, and recognizing it as a value proposition and recognizing the potential to do things you can't really do in other media, like reach people at work. So, time is on our side in all those ways. But I do think the key factor in our success, long term, has been our efficiency and, well, cheapness.