Amazon founder to buy Washington Post

2013-08-06 08:19
Amazon CEO Jeff Bezos laughs during an interview in Cupertino. (Ben Margot, AP, file)

Amazon CEO Jeff Bezos laughs during an interview in Cupertino. (Ben Margot, AP, file)

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Los Angeles - 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 Washington broadsheet and other newspapers for $250m. 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 $25bn personal fortune, based on the most 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 newspaper became internationally known after its investigation of the Watergate scandal that led to the resignation of US President Richard Nixon, the basis for the Robert Redford film All the President's Men.

Changes

Bezos is buying the newspaper as an individual. Amazon.com is not involved.

Bezos said to Post employees in a letter distributed to the media that he'd be keeping his "day job" as Amazon CEO and a life in "the other Washington" where Amazon's headquarters in Seattle are based.

But 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 chair 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.

Bezos said in a statement that he understands the Post's "critical role" in Washington and said its values won't change.

Surprise

"The paper's duty will remain to its readers and not to the private interests of its owners," Bezos said in his letter to Post employees. "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 CEO 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.

"Mr Bezos knows as well as anyone the opportunities that come with revolutionary technology when we understand how to make the most of it," she said in a letter to readers. "Under his ownership and with his management savvy, we will be able to accelerate the pace and quality of innovation."

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 newspaper's Metro columnists and a 31-year veteran. "Everybody's standing around the newsroom talking about it. ... I don't think much work's getting done."

Carl Bernstein, who helped crack the Watergate scandal as a reporter at the Post in the early 1970s, expressed hope on Monday: "Jeff Bezos seems to me exactly the kind of inventive and innovative choice needed to bring about a recommitment to great journalism," he said in a statement.

Allen & Co, which held a high-level conference for media and technology executives in Idaho last month, was named as an adviser to the deal.

Hope

Alan Mutter, a media consultant and former newspaper editor, said this deal marks the first time a newspaper has been bought by a "digital native," not someone entrenched in the print medium.

"Here's a guy who's going to re-envision the newspaper from top to bottom and we'll see what we get," Mutter said.

Benchmark analyst Ed Atorino said the sales of the Boston Globe and Washington Post demonstrate that some savvy business leaders still see hope for newspapers.

"Apparently there are people in this country who think these newspapers are worth saving and hope that advertising will eventually stabilise and they can begin to make money again," Atorino said.

"If the advertising doesn't come back, then game over."
Read more on:    amazon  |  internet

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