Amaazon founder Jeff Bezos bought the Washington Post, known for its investigative journalism, out of his own personal fortune
Amazon.com founder Jeff Bezos has acquired the Washington Post for $250m (£162m), in a move that continues the ongoing shift in power from the print publishing world to the Internet economy.
The newspaper, which achieved international recognition in the 1970s with the Watergate scandal, had been under the ownership of the Graham family for four generations. With Rupert Murdoch’s acquisition of the Wall Street Journal and Dow Jones from the Bancroft family in 2007, the Sulzberger family, which runs the New York Times, is now one of the few family proprietorships remaining in the US.
‘We will need to invent’
Bezos said he will not be involved in the day-to-day operations of the paper, remarking that he has a “day job” in the “other Washington”.
“We will need to invent, which means we will need to experiment,” Bezos said in a short letter to Post staff, adding that “the values of the Post do not need changing”.
Amazon is currently investing heavily in its Kindle e-readers, including spending on content deals with newspaper and magazine publishers – investment that contributed to a loss of nearly $40m last year, in spite of revenues of nearly $60bn for the year.
However, there appears to be no direct link between Amazon’s e-reader interests and the Post transaction, which was funded entirely out of Bezos’ personal fortune, estimated at $22bn by Bloomberg.
Rather, according to the Post’s account the deal grew out of Bezos’ long-time relationship with the Graham family and with Donald Graham, the Washington Post Company’s chief executive. Graham, who is on Facebook’s board of directors, advised Bezos on Kindle, and said his personal connection to Bezos helped convince the family to sell.
“We wanted to do more than survive,” said Graham. “I’m not saying this guarantees success but it gives us a much greater chance of success.”
He said the company had decided to look for a buyer at the end of 2012 as it faced budgets predicting a seventh year of declining revenues. US newspapers, which experienced a long period of prosperity based on a near-monopoly on profitable classified advertising, have declined largely due to the shift of such advertising to the Internet. The Washington Post Company’s newspaper division has seen revenues decline by 44 percent over the past six years.
The lack of bright financial prospects is unlikely to deter Bezos, however, who is known for investments in projects such as a 10,000-year clock and the recovery of moon-mission booster rockets from the ocean floor.
Bezos will gain control of the Post and some affiliated companies, while the Graham family will keep the company’s valuable Washington, D.C. headquarters, online magazine Slate, Foreign Policy Magazine and Kaplan, its profitable test-preparation publishing division. The Washington Post Company will change its name.
The Post, which in recent years has shuttered bureaux around the US and overseas, is not expected to see further layoffs as an immediate result of the transaction.
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