Jeff Bezos, the Amazon.com founder who helped bring books into the digital age, is going after another pillar of “old media”: the Washington Post.
Bezos, 49, struck a deal announced on Monday to buy the venerable Washington broadsheet and other newspapers for US$250 million. It was a startling demonstration of how the Internet has created winners and losers and transformed the media landscape.
Bezos pioneered online shopping, first by selling books out of his Seattle garage in 1995, then with just about everything else. In doing so, he has amassed a US$25 billion personal fortune, based on recent estimates by Forbes magazine.
Meanwhile, the Washington Post, like most newspapers, has been losing readers and advertisers to the Internet while watching its value plummet.
The paper became internationally known after its investigation of the Watergate scandal that led to the resignation of then-US president Richard Nixon.
Bezos is buying the newspaper as an individual. Amazon.com is not involved. He said to Post employees in a letter distributed to the media that he would be keeping his “day job” as Amazon chief executive and a life in “the other Washington” where Amazon’s headquarters in Seattle are based. However, he made clear there would be changes, if unforeseen ones, coming.
“The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs,” Bezos wrote. “There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment.”
Washington Post Co chairman and chief executive 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 did not say what the new name will be.
Bezos said in a statement that he understands the Post’s “critical role” in Washington and said its values will not change.
“The paper’s duty will remain to its readers and not to the private interests of its owners,” Bezos said in his letter. “We will continue to follow the truth wherever it leads, and we’ll work hard not to make mistakes. When we do, we will own up to them quickly and completely.”
Katharine Weymouth, the newspaper’s publisher and chief executive and a member of the Graham family that has owned the newspaper since 1933, will remain in her post. She has asked other senior managers to stay on as well.
The news surprised industry observers and even the newspaper’s employees.
“I think we’re all still in shock,” said Robert McCartney, one of the paper’s Metro columnists and a 31-year veteran. “Everybody’s standing around the newsroom talking about it.”
The Poynter Institute’s media and business analyst, Rick Edmonds, compared Bezos’ purchase to billionaire John Henry’s recent US$70 million purchase of the Boston Globe. The transactions remove well-loved, established publications from publicly traded parent companies that had to answer to shareholders who demanded good quarterly financial results.
“This means putting the Post in the hands of a wealthy individual who can take as long as he needs and spend as much money as he wishes in keeping the paper strong,” Edmonds said.