Ten-Year-Old Slate Still Stands Alone

In Age of Aggregators, It's Unclear Whether Online Mag Can Pay for Itself

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NEW YORK (AdAge.com) -- As Time Inc. experiments with its web-only Office Pirates and Conde Nast prepares to launch an online publication for teens, print publishers thinking digital may want to study the life of Slate, the web magazine just completing its 10th year -- and by all signs, still working on its business.
Nissan is a mjor advertiser on Slate, helping the online mag celebrate its milestone.
Nissan is a mjor advertiser on Slate, helping the online mag celebrate its milestone.

The site's leaders, publisher Cliff Sloan and editor Jacob Weisberg, describe its performance enthusiastically, but won't say anything definitive about profitability because parent Washington Post Co., which bought the site in January 2005 from Microsoft, doesn't break out Slate's financial results.

Slate's fate 'shocking'
Slate's debut in June 1996 met with a crescendo of predictions that publishing would never be the same. And Slate indeed fed the anxiety of dead-tree publishers, helped pioneer online news analysis and played a part in the rise of blogs, just as it now is playing a role in the rise of podcasts. What started as a magazine online -- complete with online "pages" to turn and a weekly Slate on Paper version -- is now firmly on the web, with audio and video reports accompanying articles.

But that doesn't mean it has finally proven how to make a sustainable web-only magazine pay for itself. Only once under Microsoft's ownership did it say it had taken in more than it spent; that was the first quarter of 2003. It now hides under an old-media company's umbrella, making it difficult to get to its P&L.

When Microsoft put it up for sale in 2004, Slate was breaking even, according to published reports at the time. Presumably, the Washington Post Co. saw profitability in its future, or it wouldn't have acquired it. And Mr. Weisberg said the whole site is "extremely focused" on profitability.

"Since its launch 10 years ago, Slate has been known for its editorial," Mr. Sloan said. "Since the Washington Post Co. bought Slate ... we've really set out to be the most innovative site on the web in terms of advertising."

A redesign, with new ad units
Today the site is introducing a redesign -- the first major overhaul in more than four years -- that includes two new ad units, a big "sweet spot" atop the home page and a horizontal "insider" bar for the middle of articles. Nissan has bought out the site for the day and will have prominent positions through July. And Slate has added Anheuser-Busch this year to a roster of advertisers that already included Visa, Lexus, Chevron, Hyundai Motor and PBS.

Ad revenue last year totaled $15.6 million, according to TNS Media Intelligence. Traffic averaged almost 5 million unique monthly visitors from January through May of this year, per Nielsen/NetRatings.

Part of the problem is that advertisers still pay more for ads on paper than ads on the web. Slate ads are sold by the Washingtonpost.Newsweek Interactive sales team. Unless online-ad rates grow, though, Slate may remain a rather rare breed of online publication.

'A lonely oak'
"My basic feeling about Slate is that it is excellent," said Kurt Andersen, the New York magazine "Imperial City" columnist and co-founder of the now-defunct Inside.com, an online news service that had an accompanying biweekly magazine. "If I could've seen the 2006 media future seven or eight years ago, I would have found it shocking that Slate would be such a lonely oak in the online forest, that there wasn't a profusion of other significant, edited, web-only journalistic organs."

What's actually proliferating right now, of course, are barely-edited or unedited aggregators and distributors like Digg and YouTube. Slate hosts tons of user comments, arguments and polemics in its reader discussion forum, but it's still a centralized venue, said Jeff Jarvis, the media critic and blogger behind BuzzMachine.

So as Slate enters its second decade, it may have to face new questions about the role of top-down, authoritative commentary -- just as its own arrival prompted soul-searching for print-edition publishers. "What we're seeing," Mr. Jarvis said, "are steps on the way to a distributed future as opposed to the centralized path."

For the near term, however, keep an eye on the smoke signals from the Washington Post Co. about Slate's financial performance. Chairman-CEO Donald E. Graham wrote in a letter that Slate had turned in "unexpectedly good results" in 2005. And the company's first-quarter report this year noted improved performance at its online operations, including Slate.
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