Jeffrey Bezos, founder of the world’s biggest online retailer Amazon.com, is paying $ 250 million to buy The Washington Post and its newspaper assets, the newspaper reported Monday.
The deal for the paper, which ranks alongside The New York Times in terms of influence, is the most significant sign yet of >how deeply the internet has reshaped the news business in the United States .
Bezos, Amazon’s chief executive, will become sole owner of the news organization and its website. Seattle-based Amazon will not have a corporate connection to the purchase, the Post said.
Founded in 1877, the Post’s most famous story led to the exposure of the 1972 Watergate burglary scandal, which eventually forced President Richard Nixon to become the only President to resign in US history.
Increased competition from the internet for advertising revenues was a main motivation behind the sale of Washington Post newspaper assets, according to the paper’s story announcing the sale.
The newspaper division has “suffered a 44-per-cent decline in operating revenue over the past six years,” the Post wrote.
The Post pointed out the “financial turmoil that has engulfed newspapers” in the rise of the internet and the “epochal change from print to digital technology.” “The Post could have survived under the company’s ownership and been profitable for the foreseeable future. But we wanted to do more than survive,” chief executive Donald Graham said in an interview with his flagship publication.
Bezos has ridden the internet boom to become one of the most applauded entrepreneurs in the country. The Harvard Business Review this year ranked Bezos the second-best performing chief executive in the world in the last decade, following only Apple’s Steve Jobs.
“He’s everything we were looking for — a business leader with a track record of entrepreneurship who believes in our values and cares about journalism, and someone who was willing to pay a fair price to our shareholders,” Post Publisher Katharine Weymouth said.
Weymouth is a fourth-generation descendent of the family that has operated the paper since 1933, when Eugene Meyer bought the paper at a Depression-era fire sale.
The paper and its expanded company holdings have been operated by his son-in-law Philip Graham, his daughter Katharine Graham, and his grandson Donald Graham.
The Graham family controls the publicly traded parent company through stock structure and will continue to do so, minus its newspapers. The Post Company operates profitable operations beyond the struggling publishing business. The rest of that parent company will continue under current management with a “still-undecided name” that will not include “The Post.” The diversification beyond newspaper publishing with the acquisition of the Kaplan educational division — currently the largest division by revenue — and cable television systems secured the financial prowess of the Washington Post Company.
With the purchase of The Post, Bezos will acquire its website and a handful of other, mostly local, newspapers: the Express, the Gazette Newspapers, Southern Maryland Newspapers, the Fairfax County Times and the Spanish-language El Tiempo Latino. Two printing plants will be included.
Bezos is not buying the company’s headquarters building in Washington — which has been on the market this year — or Foreign Policy magazine, the websites Slate and The Root, the WaPo Labs digital development operation or Post-owned land along the Potomac River in Alexandria.
The Post has seen circulation dwindle — down 7 per cent just in the first six months this year — and has shrunk in size. It has closed its Sunday book review section and merged its business reporting into the front section.
“We talked about whether (the company) was the right place to house The Post,” Weymouth said. “If journalism is the mission, given the pressures to cut costs and make profits, maybe (a publicly traded company) is not the best place for The Post.” Last week, The New York Times, still controlled by the Sulzberger family, sold its ownership of The Boston Globe for $ 70 million to a Boston businessman who already owns the Boston Red Sox baseball team.
Bezo’s Amazon, while successful, is the object of resentment by many small and even larger business owners, who complain of loss of business to the company that undersells most products and offers free shipping.