The sale of the Washington Post to Amazon founder and multibillionaire Jeff Bezos for US$250 million — just under 1 percent of his wealth — reads like the coda of a Tom Wolfe novel. A great American institution is bought by an Internet entrepreneur, part of the Silicon Valley elite, whose rocket-ship ride to stratospheric wealth has coincided with the implosion of a galaxy of influential brands born before the era of the microprocessor.
It is the first newspaper purchase in over a decade, it has shaken American journalism out of its sleepwalk to oblivion and has made the wires hum with something other than bad news. Has this changed the narrative of inevitable decline? A seriously successful son of the new economy has dropped some pocket change on a title of international significance, but uncertain outlook. Bezos is a man who can afford US$42 million to spend on a giant clock built inside a mountain — which, one might speculate, is a relatively safe investment compared with a newspaper that has recorded seven consecutive years of declining income.
The motivation of Bezos to buy a newspaper will, no doubt, be picked over in the financial pages, but this is not a business deal; it is a cultural statement. News is not the industry that it once was, or an industry at all. It is a cultural good, the format and delivery of which needs remaking for a different set of consumer needs and capabilities.
It is highly unlikely that the immediate key performance metric for the Washington Post’s new owner will be increased profitability and a soaring share price. Or any share price. In a finely-worded, short and poignant letter to the staff, proprietor Don Graham noted that in discussing the Post’s future with publisher Katherine Weymouth, we “began to ask ourselves if our small public company was still the best home for the newspaper.”
Graham noted that it was seven years of declining revenue for the Post, the great title, the Watergate paper that downed a president, that had been in his family since his grandfather Eugene Meyer bought it out of bankruptcy in 1933. The only way forward for the company’s management of the paper, Graham noted, was for cuts. It is a mark of the love that Graham has for the Post that his best solution to safeguard its future was through a sale.
At the end of a week that saw the Boston Globe sold for US$70 million by the New York Times Co to Red Sox owner John Henry, it seems that the lock gates transferring newspapers from a gilded past, through an unsustainable present, to to an unknown future have creaked open. Newspapers are now restored to their former status as playthings of the rich, rather than market-driven profit centers.
Even more interesting, perhaps, is the transmission of west coast wealth to the crisis-torn content economy of old-fashioned east coast influence factories. The cultural divide between the thought processes of the engineering-
oriented Silicon Valley and the words-based elites of the east, in politics and media, is vast. The low esteem in which each holds the other is often breathtaking to observe.
It was a “no contest,” an unfair fight, in which the new economy of the west coast understood how to build relationships with people, sell them what they wanted, charm the stock market — and do it at a scale and speed that could not be matched by analogue businesses.