Robert Thomson Editor in Chief, Wall Street Journal at Turkish Cultural Center

That's very, very much my pleasure. Thank you all.

Well, first of all, if those of you who recall when News Corporation took over Dow Jones, there was a lot of reporting at that period about how, to a certain extent, the Australian barbarians were not just at the gate but we were in the elevator, and could somebody please stop the elevator. So there's a lot of controversy. And of course, the temptation in those circumstances is to reassure people. Certainly, you don't want to frighten them unnecessarily. I think some people, because they believe what they read in newspapers like the New York Times, were unnecessarily unnerved. But at the same time, you want to make them aware of the difficult reality that newspapers and media are generally facing. Because I think one of the problems, not just in this country but around the world, has been the journalists themselves, who are supposed to be aware of societies they report on, have been almost willfully unaware of how those societies are changing. And as you said, you pick up an iPhone, you're not just picking up a telephone, you're picking up an information center. And this willful unawareness has made many media organizations very vulnerable to those changes. And so you see it, for example, the end of the Christian Science Monitor as a newspaper, Detroit, in San Francisco, in Denver, in Seattle, and in many other papers around America and to a certain extent around the world. So the initial message had to be one of this was a great time of challenge. We have to confront that challenge, but if we do so with intelligence and creativity and professionalism, that's a great opportunity for us. And I think that message, thanks to the support we get through News Corporation, Mr. Murdoch, that message frankly has been shown to be a fair one. And the potential that the Journal and Dow Jones had is beginning to be realized. I think for the last six months of circulation, as reported not just by us but by the Bureau of Circulation, which is the official measurement, showed that in the US, of the top 25 newspapers, only one reported an increase in circulation, and thankfully that one was us. And similarly online, we now have about, and it's very difficult to measure these things accurately, but about 20 to 23 million different people from around the world come to WSJ.com. The iPhone application, we have a specialist headline, a new service for the iPhone. In about three weeks, 650,000 people downloaded that application, and not all of them are using it every day, but it just shows you how much the nature and character of the audience is changing and how the nature and character of content must change. And that was both the initial message to the staff and the continuing message to the staff.

I think it was certainly part of the strategy. It's an interesting question. If you remember the Journal from two years ago and you were looking for international coverage, some days there'd only be one or two stories in the first section about the world. And whatever the economic upheaval we find ourselves in the midst of now, one thing is for certain: that globalization is not going away. It's still changing the world and making it more important that readers understand that world, whether they're business people or professional people, frankly just average citizens. To understand your context is to understand that it's a global context. So we created extra space in the paper, and you'll see now we have an international news section every day, which is often four or five pages. And one of the other things that we noticed was that commercially, the papers that when I first went to China in 1985 as a correspondent jointly for the Sydney Morning Herald and the Financial Times, many American newspapers, the Baltimore Sun, the Atlanta Journal-Constitution, and Christian Science Monitor had correspondents in China. Now virtually none of them do. And so we were confident that there was an audience, an intelligent, well-educated American audience that was interested in the world but had fewer and fewer sources of reliable reporting. So we saw it as an opportunity. And frankly, one of the things that we're literally just in the midst of doing now, we've appointed a, we didn't have a correspondent in Turkey. We have one now, and he's in the midst of moving and starting to report. And at the Times of London, where I was previously the editor, Turkey was clearly a very important story economically, politically, and culturally. And Turkey's role in Europe and Europe's role in Turkey were both big, important themes. And I think one of the problems in America is that there isn't enough reporting on Turkey. And hopefully, we see that clearly as an informational opportunity and an editorial opportunity. But I think Turkey is increasingly important commercially and culturally as well. So we see it as a genuine opportunity. So it's not, I think there's a journalistic ideal behind it and an ideal that Mr. Murdoch believes in, which is that the world should know more about the world. But it's also a commercial opportunity.

Yeah, well, it's an interesting question because the Journal has long stories, sometimes very long stories. And what you might characterize jokingly is looking at thirty thousand feet for thirty thousand words. Now, not many people really have the time to read thirty thousand words every day, or even every week. So we felt that the Wall Street Journal is a newspaper, so we should have news in it rather than just features. And one of the problems that I think we foresaw was that if you kept emphasizing features rather than news, that you were taking away a reason for somebody to read the paper every day. I think you need to pick up the paper and feel that, oh, something I must read here, whether it's the story about Cadbury and Kraft or whatever this news happens to be. And so we have put more emphasis on news. But you'll notice each day we still have one long feature of around two and a half thousand words or so. We have what we call a current section, which again has fairly long pieces which are off the news. And the news itself should be reported in a way that's slightly different to elsewhere because we pay specialists to look either at a certain subject or a certain country. And you would imagine because of the Wall Street Journal, frankly, people return your calls. You get a lot of access to the leaders of countries and companies. And so therefore, the quality of our reporting, even if it's on a familiar subject, should be uniquely good. And that's what we aspire to. But it's fair to say, which is implicit in your question, that there were some concerns among the journalists that, oh, well, the uniqueness of the Journal would be lost because we focused on news. But what you have to keep reminding people, and frankly, I have to keep reminding myself about, is that the Journal needs to be uniquely valuable to the reader. And journalism is not written for journalists, it's written for readers. And so unless it has a purpose and a functionality in a reader's life, they'll stop reading the Journal. And thankfully, so far, the opposite is happening.

I mean, this strategy, or the investments? Well, no, because with Dow Jones, you're able to repurpose the content in so many different places and in different formats. So for example, if we wrote a story about Turkish telecoms, it might appear in the paper, it'll appear on the web. If it's a scoop, we can put it onto newswires, and people pay more for newswires than they do for the paper. It might be actually Turkish economic growth, which because that's an important figure for the world. And we have what they call an algorithmic news service, which is where it's not in words but it's in computer code. So we translate it straight away into a computer format which talks to the computer in a trading house or investment bank, proprietary trading desk or whatever. So in all of those different formats, you're able to charge for it. So I think we're pretty confident that the investment in content is not just of journalistic or social importance, but it's of commercial value.

That was my strategy. Well, really, just people look at a website in a different way to looking at a paper. I mean, if you think about a paper, it's what you might call a landscape. You survey it. And whereas with a website, it's very hierarchical, very, you scroll, you go up and down rather than looking at it in a larger format. And actually, it's a different skill and a different approach. So first of all, for example, in the headline feed that you have on a BlackBerry or an iPhone, only a small percentage of people actually read the stories, they just look at the headlines. And about ten percent read a paragraph, and a few percent read the story. So you have to understand how people interact with the medium. And one of the keys is to make it fresh, to make the site constantly lively. And so we put quite a bit of pressure on people to file more stories, first of all for the newswire, which would then appear on the web, because we can charge commercial clients for the newswire, and then obviously we charge people for the web as well. So you can charge them twice, which is very good, but particularly in this age when advertising revenue is not so strong. And what I noticed coming across from London is that, I'm sure many of you have been to London, and you go to a newsstand in London, there are basically 15 newspapers, 15 national newspapers, depending on who you include or not. And it is extraordinarily competitive, which you could say brings out both the best and the worst of journalists. But what it does mean is particularly on the web, the level of competition has forced a level of advancement ahead of here, particularly in things like what we call search engine optimization, which is making your site have more impact on the web. And so we brought across those lessons from London to New York. And the other area where we're a little behind, and I think that's probably true of many US newspaper websites, is just in the use of audio-visual content. If you would send someone to a remote part of China, it's very easy for a journalist to take photographs now with your phone, even, and that has a great value. If you were, for example, the earthquake in Sichuan tragically a year ago, we managed to get quite a lot of images from our reporters because, frankly, we couldn't afford to send photographers with all the reporters. So we rely on them to think differently about the value of the experience that they're having for the reader and the extra content that they can create to enhance that, and frankly, to enhance the visual appeal of our content both in print and online. Because I think the thing that we all have to remember is if you're a young person, say you're 22, you're growing up in an environment very different to that in which I grew up back in Australia. And it's not just Australia is out of the way, it's just there was no internet. I grew up, my imagery as it surrounded me as a person was British and American children's programs and situation comedies. And that, frankly, visually, they're not that sophisticated. Frankly, I think the scripts were quite sophisticated, but not the visual imagery. Whereas a young person today has grown up with a lot of video games, a lot of web content which is very, very visual. And one of the other things that we have to be conscious of, both in print and online, is that socialization of visual awareness is something we also have to develop an empathy for, or else we'll lose touch with those readers.

Yeah, well, I'm not sure about that particular story on that particular day, but I think generally it's fair to say we're competing with the New York Times. And I think there's an opening around America because their national edition is quite vulnerable, it's a polite way of putting it. And there's a lot of interest in Washington coverage, and I frankly think their coverage is skewed. And so for coverage that has the objective of being objective is the real value. And that's certainly what we aim to achieve at the Journal. And in areas like a more broad national coverage, and arts and film coverage, we've improved. I mean, health coverage, we'll see today we have quite a little bit of coverage on health. But all of those things are of interest. But at the heart of the paper, the B section and C section, the B section is business coverage and the C section is financial coverage. So that whatever else we do, we're extending the range of coverage, yes, but what we're certainly not doing is lessening the importance to our readers of business and financial coverage.

Revenue. I mean, it's been fascinating to watch Wall Street collapse from the very privileged position of the Wall Street Journal. But when your readers are getting fired, right, it's probably not good for the business. And when your advertisers, Bear Stearns, Lehman Brothers, when your advertising, no more, then that's clearly not good for business either. And so that has been far more challenging, obviously, than anyone could have envisaged. On the other hand, I think the scale of the opportunity we have, not just in America but globally, is enormous. And people, when they think about Dow Jones, do focus on the Wall Street Journal, but it's a series of products ranging from general news products like MarketWatch, we shadow Commonwealth's region to a very specialist, refined journalism that looks at energy or commodities or high finance. That right across this range of subjects, we have a role. And one of the first challenges, which is actually easier than I think we had anticipated, was to bring together the newswires and the newspaper and online into the one group where people had a sense of common purpose. I think if you came to our newsroom, the new newsroom, because we've recently moved to 6th Avenue from the World Financial Center here, you will see how literally physically, geographically, everybody's part of the same team. And I think it's fair to say that in the past there was a degree of which English might call snootiness about the newswires among some of the people of the Journal. And now with putting people together...

I think that's accurate, actually. That's exactly what they are. They're sort of websites as parasites. And what's, I think, frustrating for a professional journalist, and it's not just newspapers or websites that are challenged, it's the whole concept of the professional journalist, that you would pay someone to be a specialist, that you would pay someone to be in Turkey writing about Turkey or in China writing about China, because you trust that person to be a navigator of news, to provide a kind of crafted social narrative about those countries. That there are people in the world of the web who I regard as people who believe in the earth being flat, who argue that, no, no, no, who cares about facts? Everybody's view of reality is equal. And therefore it's no loss if newspapers collapse and all the journalists are fired. So clearly, anyone that has a role in facilitating the death of the profession of journalism, well, I have an issue with that person or that website. And aggregators do, but they, because if you look at something like Google News, which a lot of people do, or if you're going to news just by a normal Google search, Google quite understandably is creating loyalty for itself. And it doesn't distinguish really between the quality of the news providers. So it may be that some propaganda, rewritten somehow, gets equal weighting with something like the Financial Times or the Wall Street Journal. And then it is set up so that you will go back to Google, that you won't go to WSJ.com or whatever, the Australian or the Times of London, whatever the website is. So clearly, and it makes revenue out of our content. And it's not the only one, you know, as you say, there are other sites that more or less are just essentially centers of what you might call institutional plagiarism. And they will argue that they drive traffic to us, which is true, but they also drive traffic away from us, which they never talk about. And there's no doubt that each of them is making revenue from our content. So that's why there's a very vigorous discussion now about how much access you allow them to have through our content. And that discussion is going on, I think, in every newsroom in every newspaper around the world. The last few weeks, I've had editors from China, from Japan, discussions with Spanish editors and German editors, and the focus is exactly the same thing: now, how do we not only protect but profit from our content when other people are profiting from our content but they have none of the costs of creating that content? So putting a correspondent in Istanbul is not cheap. It's expensive, and not that Istanbul is more expensive than Tokyo, but it's just generally.

Yeah, yeah. Because of his critical analysis, yeah. In China, well, you know, every, depending on the month, you have trouble. To try to be fair to the Chinese government, they're a lot better, but that problem wasn't solved, right? A lot better than they used to be. I actually know we have to resolve that problem. Okay, yeah. And actually, our Chinese language website is very, very successful, and it's about two and a half million.

No. In all together, we have about, including the newswires, including translators, we have 130.

I hope you're not going to ask me about the after England. We have one, we're building up. India, we have around, by the end of this year, around 100.

It is. Well, India is, I mean, China is China, and it's going to be the last steel producer in the world. It will overtake Japan as the second largest economy in about 2015. India is different. It's not as advanced, but it's in English, which makes it much easier for us to repurpose the content. For example, one of the problems we have with China is we have some interesting news about China and we have some interesting news out of New York for China. Either way, you have to translate it, and it adds an extra layer of cost. And that's true of all local language services, but not the case in India.

I think it's different, and the circumstances of papers are changing virtually every day. And I think unless you're conscious of how the environment is evolving, then you are an endangered species. But there are still opportunities because, you know, it's not my job to sell advertising, but if you think about it, if you go to the web, you almost never look at display ads on the web. But if you're reading a newspaper, the impact that advertising has is pretty significant. Here's an ad for Santander, and if you're reading it, you can't switch this ad off, you can't click it away. So I think it's up to newspapers to prove that in this environment that they still have... Now, if you're on the train, you're a walking billboard. This ad for PC World and Sprint. The newspapers have done, as journalists have done, I think a poor job generally, not all but generally, in understanding how readers' habits of interest... I mean, newspapers as organizations haven't been good at making the argument for newspapers. What makes a newspaper? Because everybody knows that newspapers are clearly different from 10, 15, and 20 years ago. But how are they different? How are they socially relevant and how are they commercially viable? That's an argument we have to make. No one else will make that for us. And the industry generally is, I think, understanding that more clearly and coherently, hopefully.

I was very fortunate. I don't know whether it was an Australian thing or a professional, but it was a very fortunate fact that I grew up in an age when you were trained in the newsroom, not at university. And so I started when I was 17, initially buying sandwiches and milkshakes and running around doing errands and, you know, useful things for a young person, and then gradually developing into a journalist, but having exposure to all sorts of different components of the craft of journalism. And that's less true now. And because people will come in as graduates, I mean, I studied it part-time and, you know, part of a distance and at night to eventually somehow to get a degree, but that took me 10 years. And all that, I didn't finish the degree course until 1989. So it took me, by which time I'd already lived in China and was moving to Japan. So that, well, I think it was useful to have that education, clearly it wasn't a core to my progress as a person or as a journalist. And these days people come in as graduates, I think their level of expectations is much higher. So they don't like doing jobs they regard as menial. I think the opportunity to give them a chance to do different things is somewhat more limited, partly it's the fault, our fault as institutions, but it is also partly the fault of the individual because they believe that they should progress much more quickly and they want to be fast-tracked. And, you know, that's, look, if you're a singularly brilliant individual, that's fine, but for most of us ordinary folk like me, you need a lot of training before you become competent. And so the great virtue really of that Australian background professional was the training that it gave me from a very early age. And I think probably attitudinally, that on the one hand you felt you could do anything, and that's part of the quasi-egalitarian ethos of Australia, but at the same time you shouldn't be arrogant, that you, well, you can do anything, you shouldn't expect too much.

The biggest difference in London is the level of competition. That is, there are certain media markets around the world which are characterized by this endless, relentless, ruthless competition, and London is one of those. Because every, and you're competing against very, very clever people who are spending all their time trying to get to the story first, to beat you and beat your paper. And that's what makes London exciting. And that's why you're dealing with people, in aggregate, a larger number of people who are either for or against you, either on your team or on the other team. But through that level of competition, have a level of professionalism that's pretty hard to match. I think that's probably true of different countries in different ways. There's a lot of, well, combination of competition and cooperation in, for example, the Tokyo market that I'm a little aware of, and in some of the Chinese markets now, there's a lot of competition, but it's quite unusual and different to, you know, going to somewhere like Houston or Atlanta, which are big cities where you have only one paper, the Houston Chronicle in the case of Houston. The similarities, I think, generally a good journalist is a good journalist, and nationality is irrelevant. And it is someone who focuses on the facts, is desperate in the pursuit of the facts, and allows themes to emerge from those facts, and not someone who has a theme and then psychically finds the facts. And I think in some instances you see, not just in the US but in various parts of world journalism, the theme first and the fact second. I think the facts should always come first.

His range of interests is extremely broad. His level of curiosity and energy is virtually endless. And that's a good thing because it puts me on notice. The question may be, I think we have some Japanese guests seeing us, you know, there'll be certain things that we'll discuss ahead of that. And then it might be British politics, obviously. We have a shared interest in, having both having worked in Britain, their comings and goings and potential outcomes over the next year in London, because it's a pressing issue. I mean, China, we talk about a lot. The future of the media, Wall Street. So he's, so he's someone, most importantly, is just enthusiastic and supportive. Because if you had a proprietor who wasn't interested in what you were doing, in the end, I think that would be negative in its impact not only on me as an editor but actually on all the journalists. I could feel because it's not just the relationship that I have with him, but it's those from around the Journal who've been with him and can feel his passion and feel his profession. He has a profoundly positive impact on them because they believe that they're working for someone who's passionate about media himself. And even this morning, the tennis writer from the Times of London is here because the US Open. And he said, well, you know, what's the buzz? And Andrew says, Neil, why don't you come and have a quick coffee? And he's interested in tennis as well and can have an intelligent conversation about that. And afterwards, Neil was literally blown away by the level of interest that he had in that topic. And I think whether it's tennis or the fate of the Asian financial system or the rise of China or, frankly, Turkey, he is interested in all these subjects in a way that makes it great to work with.

Well, I think, yeah, to be honest, I'm probably not the person to ask. Okay. But what I think is certainly true is there's a recognition in the company about the importance of Turkey. There's an interest in Turkey's development. At the Times of London, but for those who read editorials would appreciate that, frankly, I was strongly of the view that Turkey should join the EU and quite critical of Germany's position and, you know, the French position, which is a little vaguer but maybe not that much different from the German position. So that was itself, I mean, that's not corporate, but just in terms of global development, there's no doubt that Turkey's emergence is one of the big stories. And it's a big story because it's important.

That's very true. I haven't been personally, but it's something I quite like to do with my children, who are sort of Australian, half Chinese, half Australian, but born in New York and spent most of their life in London. So I don't know precisely what they end up being, is what they want to be. But I think that's very true. And because of Gallipoli and the First World War, when it was a moment of truth for Australian society, and all Australians grow up with that life story and with a recognition of the importance of that moment, but also, frankly, a recognition of the great character of the Turkish people. It's, and how really the soldiers from both sides didn't want to be there. Now, Australians, how far from home were those Australians? But true, genuine respect for the people of Turkey.

Um, I honestly don't know. I... have you ever met with the Turkish Prime Minister?

It's clearly an impressive individual. I think, look, there's a, there's partly, and I obviously say this as someone who frankly works for an international company, how you internationalize and create local competition so that you have standards that meet international levels and be, frankly, the aim of Turkish people and companies should be to be better than the rest of the world. And you have every reason to have confidence in your ability. But that does mean opening up to a certain extent, and clearly that's politically sensitive. But in the end, you know, the outcome is no doubt beneficial. And you look at the problems Japan has had coping with the outside world, even though that it's on the one hand been a great exporter, on what you might call the social science side of business, it really has been a failure, Japan has. And therefore the Japanese people, therefore opportunities for the Japanese people have been limited by their ability to communicate and deal with the outside world because they've been saved protections. Now, that doesn't mean opening up everything all the time, but it means erring on the side of opening up and being prepared to have those often difficult political battles with local interests for the sake of the national and the international good. And so, however Turkey is doing precisely at the moment, which I don't know the answer to, you, I would have an enormous amount of faith in Turkey's ability to compete economically and for Turkish companies to become some of the best known in the world, as they should be. But that will really only happen, and the country and those companies will realize their full potential, if they are fit for competition on the global stage.

Yeah, that's a very fair question. I mean, sometimes we're asked, you know, why didn't you predict? I mean, it's hard to predict these things, but it's certainly true that there should have been more examination of the underlying causes, the unusual circumstances of the crisis. And in the end, you know, many people were culpable, the institutions and individuals, and right down to the person, frankly, who fibbed about how much they were earning to get a home loan, right up to Wall Street where the incentive schemes were skewed in a way that emphasized short-term profit at the expense of the long-term health of the institution. So right through America and frankly across the world, you look at the case of Iceland, which is, it's been extra, this is quite a good book coming out in the next couple of months written by a Times of London journalist called Roger Boyce, which I read an early version of during the summer. And it's just almost unbelievable. But if you're ignorant of the consequences of your action, then you'll in the end be harmed by it. So a lot of people responsible, among them journalists, who some of whom just don't understand finance. I mean, they're very, they call themselves business journalists. I'm not talking about the Wall Street Journal specifically here, but just generally around the world, there are very few people who've taken the trouble to truly understand the various elements that combined together create the financial crisis that we're still going through. I'm a little like you, I think instinctively or from what I sense is your perspective, which is green shoots, it's hard to see exactly where they come from. Allegedly the first person to use those words was Shriti Vadera, who's an advisor to Gordon Brown, and I can see why she would want to believe that there are green shoots. But green shoots have been very, words green shoots have been green shooting all over the world. I can understand why Shriti would be definitely in favor of green shoots, but whether there are green shoots is a separate issue. That again, the problem is the underlying one of individuals, households, still to continue deleveraging before they're in good health. That's a problem. Actually, there's another problem with Wall Street, which is due just at the moment, Wall Street is awash with money. I mean, there is a lot of cheap capital, which is why you're seeing a sudden spate of M&A deals like the Cadbury or Kraft potential takeover. But at the same time, these, and big companies, frankly, including News Corporation, are able to borrow long-term on very favorable terms. But for small companies and for individuals, their credit lines are still being cut. And if, you know, five people in this room had a brilliant idea for a company and, you know, we're all certain it's going to work, you would find it very difficult to get financing. And so what you're seeing a little bit on Wall Street is not what you're seeing on Main Street. And until there are truly green shoots coming out of the concrete and mainstream, you are going to have globally economic growth. And I think that's certainly true of what you would call the Anglo-Saxon economies. And then there's China, which is very difficult to read because of the level of state intervention, and the immediate impact of state intervention in China is very unusual. And what you can't tell is how effective a lot of that investment has been, nor can you tell what will happen when the state investment slows down. So the idea that China will somehow be an engine for global growth, I don't quite accept. So I'm a little more pessimistic than most people. I slightly fear that those green shoots will become brown shoots.

Sell dollars? All right, look, China's won't do that. Yeah, no, the Chinese don't want to do that. I mean, I think you have to make a decision between what you might call nationalism and mercantilism. And there's, I think, mercantile speaking, there's a reason not to be too dependent on one currency, you know, whether you're the Chinese, the Indians, the Russians, the Australians, or the people of Turkey, frankly. So I think what shocked people is that this has been around as a story, as a debate for quite a few years, where if you go to Beijing, the Chinese lament, partly for reasons of nationalism, that they're too dependent. But at the moment of crisis, what did everybody do? Everybody around the world bought dollars. During the height of the crisis, they bought dollars. And so you would be very brave against the dollar in entirely, because other people will bet against you. But the other problem with the Chinese, I mean, of course the Chinese are right, you should have a more diverse portfolio, and yes, that's right. But the Chinese suggestion that other currencies, obviously don't mean including their own, should be somehow a reserve currency, well, yes, the euro is a reserve currency, the pound and the yen to a certain extent, but the Chinese currency is not even convertible. It's not even floating. I mean, it can't possibly be a reserve currency. And then, and actually they don't want it to be a reserve currency because they love being able to control the currency. So there's a, what you might call, institutional insincerity in the Chinese perspective. On the one hand, yes, they're right. And I'm sure that what you're seeing now among Chinese, and probably less the IMF, but more a lot of the resource investment, yes, the Chinese were investing in resources, but they're investing even more in resources now at a faster rate, is a conscious decision to diversify the portfolio, not just in terms of paper or denomination, but in terms of resources. And that's a theme that we're picking up out of Beijing, that it's...