A Conversation With FT.com Chief Ien Cheng

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Those who believe that the newspaper industry is going the way of the Dodo and buggy whip
and can’t conceive that enhanced online versions of papers can ever do especially well
ought to pay a visit to the UK’s FT. The brutal calculus of newspapers in most developed
countries is that their audiences are being devoured by the internet. If news becomes
a commodity, that may indeed be true. Wall St. suspects it is, trading stocks like The
New York Times (NYT) and Gannett (GCI) at multi-year lows.

Industry observers might argue that the Financial Times and its FT.com stable mate have the
advantage of serving a rarified market because the paper covers global finance. But, the
competition in that market is keen with Dow Jones (DJ) playing in paper and online, and
firms like Reuters improving their web operations.

One trend that content companies may have failed to notice is that better writing and
better analysis can catch and hold a large audience. In the US the industry needs to
look no further than the high-end blog like TechCruch which has a huge readership and
spends virtually nothing on marketing. It has readers because it has stories that readers
must read.

In a conversation today with Ien Cheng, managing editor and publisher of FT.com, he made it clear
that the paper and the website offer products that readers cannot get elsewhere. The
company will not devalue this content by offering all of its services
to the reader for free. Instead, it is improving those services and making the paper and online
edition even more attractive.

Some significant portion of that plan must be working. Mr. Cheng says that FT.com monthly
unique visitors are up 70% over the last year to 6.3 million. Page views have jumped 50%
to 48 million per month

To keep the readers coming back and to build their ranks, FT.com is launching an enhanced
market data sight. The product will include interactive charts, intraday currency data,and
better portfolio tools among other things. The website is also moving some of its
more well-known columnists to its blogging community. Mr. Cheng’s theory is that readers
would like to see the work of these writers. Publishing their views more often will be a
magnet for repeat visits.

The new program is not without a marketing plan. FT.com already has traffic arrangements
with several of the large portals, and it now offers 30 stories a month per user for free.

Mr. Cheng says that much of the philosophy behind all of this work is that better analysis
and speed to market with news can trump pure size and scale. In the arena of global
business reporting it would be hard to quarrel that the FT is not in the first tier,
but the company does not feel it is at a disadvantage by being smaller than Mr. Murdoch’s
new Dow Jones/News Corp (NWS) financial information empire. Being nimble can best being massive.

When asked why the FT.com should simply not move to a "free content", ad supported model,
Mr. Cheng had a response that might prove educational to others in the content business.
He does not have to. Traffic to FT.com is growing despite the fact that a full online
subscription requires a payment. FT.com believes that it can enjoy the best of both worlds.
Mr. Murdoch may prove him wrong if the WSJ.com becomes an entirely free product.
That still remains to be seen.

FT.com and The Financial Times do have greater resources than many papers, but certainly
no more than The New York Times, Washington Post (WPO), or Gannett. The UK company may have
decided to use its fire power more wisely, and indications are that the approach is a
success.

Mr. Cheng promises more innovation at FT.com next year. He may want to hold the calls
from other newspaper companies who would like to stop by and benchmark his plans.

The FT Group is part of Pearson plc (PSO)

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com.