Even as the Internet built Amazon.com Inc. into a multi-billion dollar business, it was eroding the value of the nation’s storied newspapers, including The Washington Post. In a striking example of how digital assets have gained value at the expense of those that can be held in one’s hand, Amazon founder Jeffrey P. Bezos is buying The Washington Post, the leading newspaper in the nation’s capital, the Post announced today.
Bezos will pay $250 million for the Post and several other newspapers in the Washington, DC, area. Not included are the online magazines Slate and Root.com or Foreign Policy magazine.
Amazon is valued at $136 billion, based on its stock price today. Forbes magazine ranks Bezos as the 12th-richest billionaire in the U.S., with wealth of $25.2 billion.
Post publisher Katharine Weymouth made clear that Bezos, and not Amazon.com Inc., is buying the newspaper company. “Mr. Bezos is making this acquisition in his personal capacity and not as part of Amazon,” she told the 10th National Book Festival Author’s Breakfast. She called Bezos “one of America’s great innovators and most respected business leaders.”
In a message to Washington Post employees, Bezos said he did not intend to directly manage the newspaper.
“I won’t be leading The Washington Post day-to-day,” Bezos said in his message. “I am happily living in ‘the other Washington’ where I have a day job that I love. Besides that, The Post already has an excellent leadership team that knows much more about the news business than I do, and I’m extremely grateful to them for agreeing to stay on.
“There will of course be change at The Post over the coming years. That’s essential and would have happened with or without new ownership. 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. 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. Our touchstone will be readers, understanding what they care about—government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports—and working backwards from there. I’m excited and optimistic about the opportunity for invention.”
“Everyone at the Post Company and everyone in our family has always been proud of The Washington Post—of the newspaper we publish and of the people who write and produce it,” says Donald E. Graham, chairman and CEO of The Washington Post Co. “I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post (after a transaction that would be in the best interest of our shareholders). Jeff Bezos’ proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post.”
Weymouth will continue as publisher, and says the company’s senior management will stay on.
Amazon is No. 1 in the Internet Retailer Top 500 Guide.
Colin Sebastian, a stock analyst with R.W. Baird Equity Research, surmises that Bezos may see an opportunity to help the Post transition more effectively to the Internet-based media. “Bezos has generally kept his personal investments disconnected from Amazon, and I don’t know why this would be any different,” Sebastian says. “We can probably surmise from this that he has a personal interest in news media, and sees an opportunity to more effectively transition the Post towards online distribution.”
Forrester Research analyst Sucharita Mulpuru agrees that the deal probably means little for Amazon “as it’s Bezos’ personal money, not an Amazon acquisition. It’s like asking what Bezos’ investments in space travel mean for Amazon or what Tesla means for PayPal.”
Bezos previously made a small media investment in April, joining with others to put $5 million into online news portal Business Insider.
When not running Amazon, Bezos has occasionally made news in other realms. Earlier this year, he participated in and helped fund an ocean-floor expedition that recovered pieces of the Apollo 11 rocket that brought the first astronaut to the moon in 1969. Last year, he and his wife MacKenzie contributed $2.5 million to a successful political campaign to legalize gay marriage in Washington State.
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