Monday’s stunning revelation that Internet tycoon >Jeff Bezos was buying the Washington Post for $250 million in cash represented one of the clearest signals yet shifting media power in the United States.
Amazon founder Bezos has grown the online retailer relentlessly into the biggest retailer on the web. Now, he is buying the venerable newspaper with his own money.
With a net worth of more than $28 billion, the investment hardly makes a dent in his portfolio yet gives him control of a media organisation that’s arguably second only to
The transaction came only days after The New York Times announced that it was selling > The Boston Globe to Boston Red Sox owner John Henry in another eye-catching transaction.
The Times paid more than $1 billion for the paper but agreed to sell it for just $75 million— reflecting the dramatic decline in advertising and print readership that the newspaper industry has suffered in the last decade.
“The paper has been unable to escape the financial turmoil that has engulfed newspapers and other ‘legacy’ media organisations,” the Washington Post wrote in the report of its own sale.
Can Bezos work his magic
Whether Bezos can work his Internet magic on the Post in the face of such dire conditions for the news industry is debatable, but it seems unlikely that he is buying the paper just to follow the example of other media companies, which have sought to endlessly cut staff in a bid to maintain profitability.
That was the future that loomed for the paper, which has been owned by the Graham family for four generations.
“Every member of my family started out with the same emotion — shock” in even thinking about selling The Post , said Donald Graham, the Post Co’s chief executive, in an interview with the paper Monday.
“But when the idea of a transaction with Jeff Bezos came up, it altered my feelings.” “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,” Graham said. “I’m not saying this guarantees success, but it gives us a much greater chance of success.” “Jeff Bezos’ proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post .” Bezos pledged to safeguard the paper’s legacy.
“I understand the critical role the Post plays in Washington, DC, and our nation, and the Post’s values will not change,” Bezos said in a statement. “Our duty to readers will continue to be the heart of the Post , and I am very optimistic about the future.”
Not just about synergies
While Bezos could obviously give the paper a boost by featuring it more prominently on Amazon’s properties, including its popular Kindle tablets, it will need more than easy synergies to turn it into a real moneymaker.
Bezos could just be using a part of his fortune to purchase the prestige and clout that being the owner of the Washington Post brings. He could also be committed to it, and the preservation of quality journalism, as one of his many causes, such as his Blue Origin space company, or the millions he spent to retrieve the Apollo rocket engines last year from the ocean floor.
Bezos may copy one of the most talked about newspaper successes of recent times — the revival of California’s Orange County Register, under the stewardship of entrepreneur and first-time publisher Aaron Kushner. He has revitalised the suburban Los Angeles paper through a paywall that offers tickets to the local baseball club, as well as adding reporters and unique content with a local emphasis to make the publication an essential accessory in affluent southern California.
Whether Bezos can do that with the Washington Post , or Henry with The Boston Globe , will make interesting reading.