NEW YORK -- Rupert Murdoch and Roger Ailes had just announced their intention to create a 24-hour cable news channel from scratch, vowing to launch within a year and take on industry leader CNN. As they walked out of the news conference in the fledging network's Sixth Avenue headquarters in January 1996, Ailes turned to the News Corp. chairman.
"I said, `Rupert, they're laughing at us,'" the Fox News chairman and CEO recalled in a recent interview. "And he said, `They always laugh in the beginning. That never bothers me.'"
Indeed, the upstart cable channel - which CNN founder Ted Turner once boasted he would squash "like a bug" - seemed to thrive on the skepticism about its endeavor. Casting itself as a "fair and balanced" alternative to other media, Fox News Channel surpassed CNN in the ratings in January 2002 and since then has been the undisputed cable-news champion, regularly amassing an audience more than double the size of its competitors'.
This year, there are signs that its rise may be stalling, as for the first time it has experienced significant audience erosion. But Fox News' viewership still far outstrips that of its competitors, and as the channel celebrates its 10th anniversary this weekend, it is one of the top 10 cable networks. Few are joking now about the viability of a network The New York Times once dubbed Ailes' "imaginary friend."
But proving the doubters wrong hasn't softened the channel's underdog attitude - or the ambition of its leader.
Ailes, a canny former GOP political operative whose competitive, pugilistic spirit sets the network's tone, now has a new goal.
"I want the Fox News Channel to be the dominant source of news in America and around the world," he said matter-of-factly, sitting jacketless in his spacious glass-walled office.
Aiming for dominance is a natural move for Ailes, a communications wizard whose early recognition of television's potency helped Richard Nixon, Ronald Reagan and George H. W. Bush use the medium to their advantage. In the cable-news industry, Ailes has garnered a reputation as a hard-charging boss who is fiercely loyal and unforgiving when crossed.
On a recent afternoon, the 66-year-old executive offered an expansive view of his plans for the network, at turns emphatic and self-deprecating. "I've been a hired hand all my life," he said. "Give me a mission, and I try to complete it. I don't have a lot of pretense about who I am or what I do. I get paid to make the numbers, milk the cows, make sure we do what we have to do."
It's a job that has expanded in the past year as Ailes' portfolio has widened to include Fox's local television station group. In that role, he has sought to remake the local stations with Fox News-style graphics and launch a broadcast network, My Network TV, devoted to telenovela-style programs.
But before Ailes can help Fox News expand its reach, the channel must deal with some immediate challenges. In the first eight months of this year, the network drew an average prime-time audience of 1.46 million viewers, a drop of 13 percent over last year, according to Nielsen Media Research. CNN was essentially flat with 745,000 prime-time viewers, while MSNBC was up 14 percent to 351,000.
For Fox News, the ratings slump - which comes just as it is demanding increases in subscriber fees from cable and satellite providers - has prompted speculation that its brash attitude has a limited appeal.
Network executives shrug off such suggestions, blaming the drop on a sluggish, post-Katrina news year. They said they are constantly evaluating their lineup, but they expressed confidence that viewership would pick up once the 2008 presidential campaign begins next year.
"I'm not overly concerned," Ailes said mildly. "There appears to be a large audience for what we do." The network chief is more irked about something he says Fox News has been denied: respect.
"What critics of our channel love to do is mix our journalism with our opinion shows and pretend that's what we're doing," he said. "They don't give enough credit for our journalism."
Recently, Ailes has been trying to change that. Unreserved commentators such as Sean Hannity and Bill O'Reilly remain the top ratings draw for the network, but lately the Fox News CEO has been stressing the news chops of anchors such as Shepard Smith and pledging to expand foreign coverage.
Fox News executives fiercely reject the charge that the network slants right. The polarized attitudes about the network shape the perception of nearly every move it makes; when Ailes agreed to run a documentary about global warming last year, the right "called me a sell-out and a commie, and the left thought it was a trick," he recounted dryly.