A marriage of little obvious convenience

Amazon’s Jeff Bezos has bought the legendary Washington Post. Why,

WHEN the Washington Post’s staff was summoned by chief executive Donald Graham to a meeting on Monday, many assumed he was announcing the sale of the paper’s downtown office, its prize asset. After years of decline, that would have been a spectacular if not unexpected development. But what followed was stunning.

Graham announced that the venerable title, owned by his family for four generations and forever associated with its reporting of the Watergate scandal, was being sold to Jeff Bezos, the founder of Amazon, for $250-million (about R2.5-billion). As a rule, journalists are hard to silence, but Graham, fighting back tears, managed it. “It took a while for someone to utter the first question,” said a senior editor who was present. “People were just shocked.”

Among the questions that swirled around the Post’s newsroom after the bombshell, one recurred: Why would a billionaire online retailer want to buy an ailing, fading brand with bags of talent but no business model to speak of? The Washington Post has lost money for seven years or more. It is a story of decline repeated across the US among metropolitan daily newspapers.

For the next few years, Bezos is almost guaranteed to lose more money. So why has he become the saviour of a major newspaper, spending a small part of the fortune gleaned from the digital world on a relic of old media?

Part of the reason perhaps lies in the fact that Bezos is significantly older than, say, Mark Zuckerberg, co-founder of Facebook (there are 20 years between them). Bezos started Amazon from his garage in Seattle in 1994, the year in which the Post launched its website. Bezos paid for the Washington Post from his own pocket — easy enough when you are worth an estimated $22billion. This is not a takeover by Amazon, but a highly personal decision. But what will he get out of it?

He is clearly a man who likes a challenge. His biggest non-Amazon venture so far is Blue Origin, a space tourism project that he has declared will allow “anybody to go into space”. He funded an operation to rescue two Saturn V first-stage rocket engines from the Apollo 11 mission to the moon that plunged into 4 700m of water off the Florida coast.

But why not spend his money on a start- up website that does not have the inconvenience of a print works to manage (or shut down), and which might appear to be a better match for the man who gave the world the Kindle? There is some kudos left in the Post, for sure. Its crown may have slipped since Bob Woodward and Carl Bernstein brought down Richard Nixon, but its lustre endures, just. For all its ills, the paper dominates one of the wealthiest metro markets in the country.

Bezos, however, is likely to be thinking bigger than that. “Everybody will say this is a rich guy looking after his ego — buying a newspaper like rich guys always have, but that is completely wrong,” said Michael Wolff, author and publisher of the Newser website.

“For him, it’s an R&D investment and the costs are very low. Sure, it’s about power, but guys like this see power differently from the traditional influence that owning a newspaper brings. They see it in terms of business leverage . . . He sees himself as going into the political information business, which he could also monopolise — become the Amazon of politics.”

Bezos has given few clues about his reasons for buying the Post. Although a philanthropic desire to save an American institution may be one of them, it is unlikely to loom large. He has said that senior staff will stay in place, but someone so driven by the need to innovate will surely not rest for long. As his letter to the staff said: “There will, of course, be change at the Post over the coming years. We will need to invent, which means we will need to experiment.” —©