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TWST: Kevin, do you include anything else under the publishing label and would you look back at the performance of the stocks as you saw it?

Mr. Gruneich: We tend to include in the information sector names like The McGraw-Hill Companies (NYSE:MHP), which Lauren put in the book sector, along with Equifax (NYSE:EFX), Dun & Bradstreet (NYSE:DNB) and Bell & Howell (NYSE:BHW). I agree with her on the non-newspaper stocks, that they are so diverse that it is hard to generalize why a group of them would move in any direction. You really have to think about individual performances. On the newspaper side, our coverage actually had a very good year. Our coverage, encompassed in the Bear Stearns Diversified Newspaper Index, outperformed the S&P 500: 24.0% to 19.5% in calendar 1999. That's a pretty awesome performance in light of the fact that the Internet and technology stocks, just a handful of them really, powered the S&P 500. But one of my rules of thumb is: do not generalize too much. The diversified newspaper group is definitely a stock-picker's group. For instance, the diversified newspaper stocks that we cover appreciated in a range of 1% to 67% last year. Overall, we look back at 1999 as a very good year for the newspaper stocks.

The diverse nature of the publishing/information industry does not allow for a simple value or growth label, but I do think the newspaper stocks lean heavily toward value. And I do think there are still some excellent investment ideas in the group. We have a few buys in the group, and we highlight Knight-Ridder (NYSE:KRI) and The New York Times Company (NYSE:NYT) on the newspaper side. Knight-Ridder is more of a value play, the least expensive stock in the industry. Still, there is some upside estimate pressure, and given capital spending is in descent, free cash flow will be partially used to buy back shares - probably 5-6% of the outstanding common in 2000. Again, Knight-Ridder has outsized Internet exposure - $55-60 million in 2000 revenues. The New York Times Company will generate less Internet revenue this year - perhaps $45 million. But its Times Company Digital unit is led by a visionary - Martin Nisenholz - and will likely be the first in the group to be spun publicly. The flagship newspaper, The New York Times, constitutes about 55% of total corporate EBITDA. And it has by far the largest national advertising revenue exposure (61% of total ad revenues) and the smallest retail exposure (11%) - diametric to the industry's weaker mix. Unlike most other daily newspapers, The Times is not market-constrained on the circulation side either - over 40% of its circulation is outside the New York market and is growing. Management has done a fantastic job of positioning the flagship and executing the national strategy. With capital spending sinking, share repurchase will be even more aggressive than at Knight-Ridder.