Is this a hoax? It’s fair to say I wasn’t alone in my shock, idly scrolling through Twitter last night, at learning Amazon founder and CEO Jeff Bezos is to buy the Washington Post for $250m in cash. It’s an extraordinary deal, a much-needed injection of momentum for the newspaper industry and a worrying extension of one man’s ability to influence how a good chunk of the world consumes pretty much everything.
There was very little public lead-up. “Katharine Weymouth (the paper’s publisher) has asked Washington Post staffers to go the auditorium at 4.30 for an announcement,” Poynter Institute media blogger Andrew Beaujon – and others – tweeted late on Monday. “Ruh-oh,” added another journalist in my feed. Then, the bombshell, broken in a lengthy piece last night by the Washington Post itself.
How the deal went down
Over the last few months, Allen & Company – the publicity-shy investment firm with a hand in a disproportionate number of major tech and media deals in the US – very quietly put the deal together. The push to sell came from the Graham family, owners and publishers of the 136-year-old newspaper for eight decades, through the Watergate scandal (the investigation that helped make its name in the mid-’70s) and a recent decline in operating revenue – 44 per cent over the last six years. The paper said it had a “half-dozen” other potential suitors for the deal.
“Every member of my family started out with the same emotion — shock — in even thinking about” selling the paper, Washington Post Company chief executive Doug Graham said on Monday. “But when the idea of a transaction with Jeff Bezos came up, it altered my feelings… The Post could have survived under the company’s ownership and been profitable for the foreseeable future. But we wanted to do more than survive.”
A much-needed show of confidence in newspapers
Some commentators welcomed the move; others expressed a sense of dread. I’m somewhere in the middle. It’s an unusual acquisition by both media and tech industry standards. As German media group Axel Springer sheds print assets, possibly in preparation for digital acquisitions, here’s an internet entrepreneur taking a very firm and high-profile step into the world of newspapers and print journalism.
That’s the best part of the deal: it’s a much-needed sign of confidence in an industry too many pundits are content to put in the “used to be great” basket. The Washington Post’s employees will get an injection of momentum; it’s also a kick in the pants, in a good way, for the newspaper’s competitors (the New York Times, the Guardian, everyone else).
Change at The Post – likely a push to digital
[contentad keyword= “left”]It doesn’t matter that Bezos chose not to acquire WaPo Labs, the group’s digital innovation and development division, which also services media assets including Slate and Foreign Policy, which are not part of the deal. He’s made it very clear that change is on the way – and it’s fair to guess that will include a heavy push to digital. From his memo to employees published by the paper today:
“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.”
That’s where I get uneasy. We know little about what Bezos holds up as an ideal within the newspaper industry. In April, he led a $5m investment round in ex-Wall Street analyst Henry Blodget’s Business Insider, a successful trade publication but not exactly a paragon of journalism in the public interest. (That said, Blodget’s piece on the deal, including whether it’s a good price and synergies with Amazon, is among the best out there today.)
Too much influence in too many verticals?
Bezos is unlikely to throw his weight around editorially. He’s smart enough to know the Washington Post’s reputation for independent, quality journalism is the best thing it’s got. (“The paper’s duty will remain to its readers and not to the private interests of its owners,” as he told employees in that memo.) The paper’s existing leadership team, including Weymouth, will stay on and Bezos won’t be involved in the paper’s day-to-day operations.
But you can do plenty to shape a publication’s direction without setting foot on the newsroom floor. It’s a personal deal, nothing to do with Amazon, except that Bezos will lead both, which gives him unprecedented influence as a trend-setter in a wide range of consumption habits. His companies are now among market leaders and first-movers in everything from news consumption to books, gadgets, cloud computing and personal spaceflight.
Should we be worried? Not really. Not yet. Just watching very closely.
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