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the fourth estate
Mon August 5, 2013
Amazon CEO Bezos to Buy Washington Post for $250 Million
Amazon.com founder Jeff Bezos is buying The Washington Post and other newspapers for $250 million.
The longtime publisher, The Washington Post Co., announced the deal Monday. Bezos is buying the paper as an individual. Amazon.com Inc. is not involved.
Washington Post chairman and CEO Donald Graham called Bezos a "uniquely good new owner." He said the decision was made after years of newspaper industry challenges. The company, which owns the Kaplan education business and several TV stations, will change its name but didn't say what the new name will be.
Robert Spector, author of the book “Amazon.com: Get Big Fast”, says Bezos isn’t afraid to try new things, and he expects the executive to shake up the newspaper world.
“I think that the Washington Post is going to be a perfect instrument for him to figure out what do we do next to upset the status quo and create something different,” Spector said.
Spector says that doesn’t mean Bezos has all the answers to making the paper profitable. He points to Amazon’s own track record, and says Bezos hasn’t proven that it’s a sustainable retail business. The company reported a loss in the latest quarter. Still, investors have rewarded Bezos, pushing Amazon stock to a record high recently.
Monday’s announcement follows a trend of very wealthy people buying newspapers as the industry continues to slump. Billionaire Warren Buffett has been buying community newspapers, and the owner of the Red Sox, John Henry, just bought the Boston Globe.
Morningstar analyst Liang Feng says he thinks people like Buffett and Bezos are choosing to do this not just for a financial return.
“It’s never really going to play a huge component in their own net worth, but they think it plays an important societal role that they would like to help further,” Feng said.
In a letter to Post employees, Bezos said he’s keeping his day job in the other Washington, and the values of the paper will not change. But he did say that the Post has to adapt to the Internet, which is shortening news cycles, eating away at old sources of revenue, and giving rise to new kinds of competition.
He added the focus should be on readers and what they care about. The idea is familiar to Amazon watchers. Bezos’s constant mantra is to put the needs of customers ahead of everything else.