Editor's Note: Condé Nast Portfolio spoke with Katharine Weymouth prior to July 7, when the Washington Post named former Wall Street Journal managing editor Marcus Brauchli as its new executive editor. 

Nobody knows better than Katharine Weymouth that the newspaper industry is experiencing what may be called, euphemistically, a period of transition. But the new publisher of the Washington Post isn’t big on euphemisms.

“The numbers suck in our business,” the 42-year-old granddaughter of legendary Post publisher Katharine Graham declares, holding her tall, lithe frame dancer-straight, the result of a childhood spent in ballet classes.

It’s a lovely day in early April, and Weymouth is at the Post’s downtown D.C. headquarters, meeting with the staff of Style, one of the paper’s more popular sections. The session is a stop on the listening tour of the newsroom that she’s been conducting since February, when she was named publisher and chief executive of Washington Post Media, a newly configured unit that encompasses the newspaper’s long-divided print and Web operations. (View a slideshow featuring some of the newspaper's major players.)

This should be a very good day at the Post. The day before, the paper won six Pulitzer Prizes, a record for the Post and the second-biggest haul ever for any newspaper in a single year. To celebrate, Weymouth threw open the doors of her decidedly unflashy home for an impromptu shindig, greeting coworkers in her bare feet and chatting with young staffers into the night.

But the afterglow is already waning, and now it’s back to the dismal reality of newspapers everywhere. “We are going to have to get smaller and better and still find a way to put out the best product we can,” Weymouth tells the assembled reporters and editors at the headquarters of the Post. “That may mean that we have to make some choices about what we can cover and what we can’t—and those are going to be hard choices.” (View a pop-up graphic showing how the Post's ad revenue and circulation stack up to the competition.)

Weymouth, a divorced mother of three young children, is the lone member of her generation of Grahams to work at the family-controlled, publicly traded company that her great-grandfather, Allied Chemical tycoon Eugene Meyer, bought at a bankruptcy auction in 1933. Her new role makes her the almost inevitable successor to her uncle, Washington Post Co. chairman and chief executive Don Graham, and the two can often be seen circling the Post building together, walking and talking. Don, a physically fit 63-year-old, isn’t planning to go anywhere anytime soon, and in the meantime, Weymouth must prove herself by running the unit that defines the Washington Post’s celebrated brand but that may also have the bleakest future.

The Post Co.’s performance tells the story of a fading industry: Over the past 24 years, its cable unit has prospered but the newspaper, broadcast, and magazine divisions, including Newsweek, have become dwarfed by its Kaplan unit, which offers education, test-preparation, and career-training services and whose cash flow today accounts for nearly half of the company’s $4.1 billion annual revenue. The tail has become the dog, and the Washington Post Co.—forever identified with fearless reporting on the Watergate scandal and the Pentagon Papers—now defines itself as a “diversified education and media company, with education as the largest and fastest growing business.”

Weymouth “is very talented, very smart, and she has a huge challenge, which is to be in the newspaper business at this particular time,” says longtime family friend Barry Diller, chief executive of IAC/InterActiveCorp and a director of the Post Co., whose share price recently slid below $600 from a 52-week high of $885.

At a lunch with Post editors and reporters, Microsoft chief executive Steve Ballmer confidently predicted that in 10 years “there will be no newspapers, no magazines that are delivered in paper form” and “no media consumption” except via the internet. Weymouth’s maybe impossible mission: to change that future—or at least figure out how the Post can survive in it.

It was probably not an omen, but shortly before she was named publisher, Weymouth was mugged at gunpoint on a Washington street. It was midnight, and she and a female friend were leaving a dinner party at the home of a Post colleague. “I always feel like I’m a tough chick and nobody is going to mess with me,” Weymouth says. “We were paying no attention to our surroundings, which we should have been. This guy comes around the corner and says, ‘Your purses.’ Then he pulled out a gun, and we realized he wasn’t joking.” Emerging from the ordeal stripped of cash, credit cards, and Weymouth’s Washington Wizards basketball tickets—but otherwise unscathed—they retreated to a lounge, where Tim the friendly bartender served them margaritas on the house to steady their jangled nerves.