Learning Curve at Washington Post

For its second quarter, Washington Post reported an 8% gain in revenue thanks to its for-profit education division, Kaplan, which made up 42% of the revenue and was its most profitable business.

Last year, Kaplan was responsible for 40% of the company's operating revenue, up from 34% in 2004.

"In the years to come, Kaplan will become a bigger and bigger part of our total business," said Donald Graham, the company's chairman and CEO, in his annual letter to shareholders. "This will change our company."

His mother, Katharine Graham -- the company's former chairman and a pioneer for women in the boardrooms of corporate America -- bought Kaplan in the 1984 to diversify the company's holdings.

Now, the education business is being held up on Wall Street -- where growth potential means everything -- as the company's saving grace.

"The Washington Post is in the fortunate position of having used proceeds from its traditional assets, like the newspaper and its collection of TV stations, to fund higher growth initiatives, like Kaplan," says Morningstar analyst James Walden.

"Kaplan, especially with its higher-education businesses, is a very credible growth engine for the company. They've got brick-and-mortar institutions that are doing well, and they're getting a big boost from their online activities as well as their international expansion," he continues.

The Kaplan Test Prep and Admissions business prepares students for more than 80 standardized tests and provides private tutoring and one-on-one admissions guidance for school applicants.

The Kaplan Higher Education business runs in more than 70 campuses in the U.S. and abroad, and it has launched online programs through Kaplan University and Concord Law School.