After nine years of steady growth, Fox News Channel arrives at its 10th birthday Saturday with a few growing pains that will challenge it in its second decade.

There is no question that the Fox News Channel has exceeded all expectations since it signed on October 7, 1996, long before the nation had heard of Monica Lewinsky, blogs, Sen. Hillary Rodham Clinton or Gov. Arnold Schwarzenegger. Fox News executives remember the laughter and the barbs when plans for the channel were announced by News Corp. CEO Rupert Murdoch and Fox News CEO Roger Ailes. They recall being ignored by CNN, the longtime leader in cable news, and derided by others in the TV news business.

"This was a mountain that couldn't be climbed," said inaugural anchor Shepard Smith, referring to the verdict of the naysayers.

It took less than seven years for Fox News to overtake CNN, in the process becoming a part of the national conversation and frequently becoming a lightning rod for partisan passions on both sides of the aisle.

"We came on at the right time, there were a lot of big stories, the competition totally ignored us," senior vp programming Bill Shine said. "We literally sneaked up on them, we hired some very good journalists and shot past our competition."

Not even the channel's undisputed star, Bill O'Reilly, host of "The O'Reilly Factor," could foresee what was coming when he started his primetime show in 1996, then known as "The O'Reilly Report."

"I didn't think about it that way," O'Reilly said. "I thought we'd do a show that would succeed, but that was all I knew and was focused on."

During the past 10 years, Fox News has become a highly influential news source among the power elite in Washington. It has been cheered and jeered for its tagline of "We report. You decide" and for calling itself "fair and balanced."

"We gave journalism a V8 moment where they had to slap their foreheads and say, 'Oh my God, maybe we haven't been covering both sides on some things, maybe we have been a little myopic and East Coast-oriented in some of the views and issues," Ailes said. "The fact that the American people rallied to the Fox News Channel, I think, made many people realize how out of touch with the country some, particularly the New York Times, are."

A list of the top programs in cable news in any daypart shows how dominant Fox News Channel is with such hits as "O'Reilly," "Hannity & Colmes," "On the Record With Greta Van Susteren," all in the wheelhouse of cable primetime where CNN and "Larry King Live" once reigned with no competition. And throughout the rest of the day with such anchors as Smith, Brit Hume and Neil Cavuto, Fox News remains by far the leader in cable news, and a top 10 network in all of cable.

But in recent months, the straight line has been heading south, with the channel posting declines in total viewers and the key adults 25-54 news demographic for 12 months in a row. The network has been the subject of a renewed round of criticism for what some view as its partisan bias toward Republican politicians and conservative causes. It most recently flared up during last month's sit-down interview with former President Bill Clinton by Fox anchor Chris Wallace on "Fox News Sunday," during which Clinton said he felt Wallace had done a "conservative hit job on him" when questioned about his administration's efforts to hunt down Osama bin Laden.

Ailes and other Fox News executives believe the channel's recent ratings drops are temporary, driven in large measure to its comparisons with the heavy news cycle in 2005.

"Except for maybe the stock market I can't think of a more cyclical business than the news business," Shine said. With the South Asia tsunami to the death of Pope John Paul II, through the London transit bombings and Hurricane Katrina, Shine said last year "was an unbelievable year for news and on a comparative basis, 2006 can't be compared to 2005."

But others aren't so sure. Some cultural observers think Fox News' declines might be reflective of a larger shift in the national mood.

"The political climate of America has become disillusioned with what conservatives stand for, and since Fox is suspected, considered to be the conservative network, it's only natural that some of those viewers will chip away," said Matthew Felling, media director of the Washington-based Center for Media and Public Affairs. Felling believes that Fox News will remain No. 1 in cable TV anyway, particularly if Congress shifts to the Democrats' control this fall.

"Like (Rush) Limbaugh loved the Clinton years, Bill O'Reilly and Sean Hannity need a foil to combat every day," Felling said. "The villains of (Democratic National Committee chairman) Howard Dean and (Democratic congressman) John Murtha aren't holding up."

Ailes points to Clinton's tirade against Fox News to show that they're not afraid of criticism.

"Where are they attacking us? They're doing it on Fox News. We give access to those who criticize us," Ailes said. "We don't pull the plug. We don't edit the tape. We don't give a damn. But other outfits wouldn't even book you if they knew you would criticize them."

Regardless of the reason for the decline, Ailes isn't resting on his laurels, and he insists on his employees doing the same. His early morning meetings are legendary for his intensity in discussing things ranging from the state of world affairs to sizing up the competition. At Wednesday night's 10th anniversary bash -- which took over a half a block of West 48th Street adjacent to Fox News' headquarters -- Ailes cast Fox News as still being a come-from-behind network. He said the next 10 years have begun for the "startup" that is Fox News.

"You ain't seen nothin' yet," Ailes assured when addressing the party crowd.

Ailes said he's looking to help offset the costs of newsgathering and boost its international reporting, which he said is outstanding but they don't have enough correspondents. And he won't rule out additional changes on and off the air to keep the network on top. The scrappy underdog mentality has served it well, insiders say, as has Ailes' unwavering confidence.

"What's different about Fox is the management," said Van Susteren, who joined Fox News in 2002 after 10 years with CNN. "They're supportive, you do your work without interference and worrying about constantly changing bosses. ... Our marching orders (are) to do the best damn job you can," she said. (Paul J. Gough)