Amazon founder Bezos to buy Washington Post for $250M
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 Monday to buy the venerable Washington broadsheet and other newspapers for $250 million. It was a startling demonstration of how the Internet has created winners and losers and transformed the media landscape.
Bezos made his fortune by pioneering online shopping, first by selling books out of his Seattle garage in 1995, then with just about everything else.
Meanwhile The Washington Post, like most newspapers, has been losing readers and advertisers to the Internet while watching its value plummet.
The newspaper, celebrated a generation ago for breaking the Watergate scandal, has been forced in recent years to scale back its ambitions, cut its newsroom staff repeatedly and close several bureaus.
Bezos is buying the paper as an individual. Amazon.com Inc. is not involved.
Washington Post chairman 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.
"The paper's duty will remain to its readers and not to the private interests of its owners," Bezos said to Post employees in a letter distributed to the media. "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 paper's publisher and CEO and a member of the Graham family that has owned the paper 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 paper's employees.
"I think we're all still in shock," said Robert McCartney, the paper's Metro columnist and a 31-year veteran. "Everybody's standing around the newsroom talking about it. ... I don't think much work's getting done."
The email hit staffers' inboxes at 4:17 p.m. Eastern time. It summoned them to a meeting 13 minutes later.
Graham spoke at the staff meeting of how he has known Bezos for more than a decade, and described him as a decent and patient man, said McCartney.
Graham told the staff he is convinced that Bezos is committed to quality journalism and has no political agenda. There was sustained applause from the staff after Graham and Weymouth's remarks.
"Hard to imagine the Post without the Grahams," wrote East Asia Correspondent Chico Harlan in a tweet. "Don emailed his writers, knew their names."
Writer Gene Weingarten tweeted, "If Don Graham says this was the right thing to do, I trust him."
Allen & Co., which held a high-level conference for media and technology executives in Sun Valley, Idaho, last month, was named as an adviser to the deal.
To observers, Bezos is eminently qualified to be a newspaper owner: He's rich, he's innovative and he's willing to live with slim profits. That's proven by his running of Amazon since its foundation. Last month, Amazon.com Inc. reported a surprise loss in the April-June quarter even though revenue grew 22 percent to $15.7 billion.
"Some other buyers might see the Post as a thing to drain money out of," said Joshua Benton, director of the Nieman Journalism Lab at Harvard University. "There's little reason to think (Bezos would) fall into that category."
The Poynter Institute's media and business analyst, Rick Edmonds, compared Bezos' purchase of the Post to billionaire John Henry's $70 million purchase of The Boston Globe, which was announced Saturday.
The newspaper transactions remove well-loved, established publications from publicly traded parent companies which had to answer to shareholders who demanded good quarterly financial results.
"This means putting the Post in the hands of a wealthy individual who can take as long as he needs and spend as much money as he wishes in keeping the paper strong," Edmonds said. "That's a much better situation than a company with other faster-growing businesses trying to justify that same investment."
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.
The soon-to-be-renamed Washington Post company will retain Slate magazine, TheRoot.com and Foreign Policy magazine, as well as the Post's headquarters building in downtown Washington.
Bezos said in his letter to employees 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."
Memo from Jeff Bezos to staff on Washington Post sale
"You'll have heard the news, and many of you will greet it with a degree of apprehension. When a single family owns a company for many decades, and when that family acts for all those decades in good faith, in a principled manner, in good times and in rough times, as stewards of important values when that family has done such a good job it is only natural to worry about change.
"So, let me start with something critical. The values of The Post do not need changing. The paper's duty will remain to its readers and not to the private interests of its owners. 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.
"I won't be leading The Washington Post day-to-day. 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.
"Journalism plays a critical role in a free society, and The Washington Post as the hometown paper of the capital city of the United States is especially important. I would highlight two kinds of courage the Grahams have shown as owners that I hope to channel. The first is the courage to say wait, be sure, slow down, get another source. Real people and their reputations, livelihoods and families are at stake. The second is the courage to say follow the story, no matter the cost. While I hope no one ever threatens to put one of my body parts through a wringer, if they do, thanks to Mrs. Graham's example, I'll be ready.
"I want to say one last thing that's really not about the paper or this change in ownership. I have had the great pleasure of getting to know Don very well over the last ten plus years. I do not know a finer man.
"Sincerely, Jeff Bezos."