The following is a transcription of the January 27, 2007 edition of "FOX News Watch" that has been edited for clarity.

ERIC BURNS, HOST:

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY): I announce today that I'm forming a presidential exploratory committee. I'm not just starting a campaign though; I'm beginning a conversation — with you. And while I can't visit everyone's living room, I can try. And with a little help from modern technology, I'll be holding live, online video chats this week, starting Monday.

(END VIDEO CLIP)

BURNS: Now that's how Hillary Clinton entered the 2008 presidential race: Not with a press conference or a rally, but with an invitation to an online chat. And she isn't alone; so far, Sen. Barack Obama, Governor Bill Richardson of New Mexico and John Edwards have also used the Internet to announce their White House bids.

Good idea, Jane?

HALL: I think it's definitely a good idea if you want to try to reach younger people. And also, it's an incredible mobilizing too. And the Democrats had a huge wake-up call when Howard Dean practically got the nomination, under the radar, because they didn't know about mobilizing on the Internet.

I mean, one story said — Hillary Clinton — it's funny to me, because Hillary Clinton I don't think is known for her chatty, spontaneous manner — whatever you think about her. For her to be doing this shows — I mean, they said they were getting something like 100 people signing up per hour to get on her e-mail list. I mean, it's an incredible exponential thing that they're all trying to tap.

GABLER: Yes, it's an important constituency now in the Democratic party, this "netroots." And it's also a way to raise money, as Howard Dean proved. I think Jane's right.

But here's another factor, especially for Democratic candidates: they know they're going to get victimized — they already have been, this early in the race — by the right-wing press. And what they've got to do is they've got to find a way, as George Bush used to say, of "getting around the filter." They've got to directly address voters so that they don't have to work through FOX News and the right-wing — you know, Rush Limbaugh and O'Reilly and all of those guys.

And that's another aspect in this whole reliance on the Internet.

PINKERTON: Hillary Clinton was on all three of the broadcast news networks.

GABLER: Which was wrong, in my estimation, by the way.

PINKERTON: Well, fair enough. But the point is — but I suspect— the numbers prove this.

HALL: She's covering all bets...

PINKERTON: That the audience for those three broadcast networks was probably 10 times what what FOX...

(CROSSTALK)

HALL: Well, but they're different age groups.

PINKERTON: OK, fair enough. But the point is, it's not like FOX News is the big killer waiting to stalk her. She's got infinitely larger media outlets totally in her pocket, like Katie Couric.

GABLER: Not in her pocket.

(CROSSTALK)

BURNS: This is a matter, then — using the Internet, then, is a matter, not of reaching numbers so much as reaching the right numbers. It's a demographic matter.

I did some research on this: 62 percent of the households in this country have computers. Ninety-eight percent have television. So obviously, Cal, if you want to reach just numbers, you should make your announcement on television.

THOMAS: Well, yes. But you get the benefit — it's sort of like doing a one-time campaign commercial — if the networks pick it up, you get free time on broadcast.

Neal says that they're going this to raise money like Howard Dean did, and he's right. But they're also going to use it to save money.

I had a top network executive tell me this week that he believes the day of the national television "buy" is rapidly coming to an end. There are so many more ways that will save money from this huge amount that has to be spent on national television by — for commercials, where you can go through the Internet, where you can go through YouTube, and then you get the extra benefit of the networks picking up on some of this stuff, and effectively running a free commercial as news for your candidacy.

HALL: Well, and the best networks — and [NBC News anchor] Brian Williams has started this "Daily Nightly Blog" are trying to amortise that, drive people to the Web.

But you get true believers on the Web, and I think the broadcast networks give you the math reach. Still, and if you can do both, all the more good.

PINKERTON: You also get interactivity, which people treasure now in the media. They want a text message, like FOX did the text message for the State of the Union. They love doing stuff like that.

Hillary and her blog, video thing, said, Oh, I'm answering questions from citizens. And by the way, Steve Clemens, from "The Washington Note" asked a question about whether I'd be interacting with my staff or not. And so, Steve, blogger, I'm going to answer my question to you directly. And, of course, Clemens loved that on his blog. And so it's reverb, reverb, reverb, back and forth.

BURNS: But Neal, I thought Cal's point was fascinating; this could be a financial revolution, right? If you do these things online which cost virtually nothing and they are picked up on newscasts, and they're picked up enough — enough of them are — this is a fortune in savings, conceivably, rather than doing your own ads.

GABLER: Although, Eric, there's a yin and yang quality to this, too. Because we know that Hillary Clinton has already opted out of the public financing, and that this campaign.

THOMAS: They all have!

GABLER: ...Well not everyone, yet. But this campaign is probably going to cost $200 million at least, for each individual main-party candidate. So here, they're opting out because they're going to be spending hundreds of millions, literally. And on the other hand, we're saying, well, they're going to need all that money for television buys.

THOMAS: But that means more get out the vote, instead of the.

(CROSSTALK)

GABLER: It's going to be very interesting. It's going to change American politics..

THOMAS: Exactly.

GABLER: ...if this is indeed true, this analysis is true.

BURNS: [To Jane] I thought you were going to say something.

HALL: Well, let me just say, the other piece of this is local television, which doesn't cover the news at all, still makes billions on local political commercials. We should never forget that.

BURNS: OK. You could have said a couple extra lines if you hadn't paused.

(LAUGHTER)

So that's your fault.

Time for...

HALL: You're right!

BURNS: Time for another — you can't say them now! It's time for another break.

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