Jeff Bezos buys the Washington Post: A Pando meta media mashup
A whole lot has been written about Amazon founder Jeff Bezos's purchase of The Washington Post. It’s been all over the news, on TV, radio, in newspapers, online and raining down on the blogosphere. We sifted through all that mass of media to bring you a curated mashup of the best of the Bezos-Washington Post coverage, every sentence taken from somewhere else. It’s the ultimate hyperlinked aggregation, a veritable clickapallooza, a teeming mass of hyperlink madness.
Amazon.com founder Jeffrey Bezos, who revolutionized the book business, is now aiming to do the same with one of the nation's most storied newspapers. Bezos, hailed by many as technology visionary, called his acquisition [of the Washington Post] a personal endeavor and reassured employees and readers of the 135-year-old newspaper he will preserve its journalistic tradition, while driving innovation.
Few people were aware that a sale was in the works for the paper, an institution that has covered presidents and local communities and gained worldwide attention for its stories about the Watergate scandal and, in June, disclosures about National Security Agency surveillance programs. Bezos wasn't the only bidder interested in the newspaper, but he was the "best and highest bidder," according to sources. (It's Jeff Bezos making the purchase. Not Amazon. Get your "did he buy it in one click?" jokes out of your system now.) The move comes just a few days after Bezos sold $185 million in Amazon stock, parting with nearly 615,000 shares of the Seattle-based online retailer.
The Washington Post has been dying a slow death over the last decade -- ever since the Internet re-invented the way people received and reported news. Print newspaper ad revenues fell 55 percent between 2007 and 2012, according to the Newspaper Association of America, as advertisers and readers have defected to the Web. Some newspapers have been forced to slash costs and in some cases file for bankruptcy. The sale comes against the backdrop of the digital revolution, which has transformed the way people consume news and profoundly disrupted the newspaper business. In taking ownership of the Post, the Internet billionaire merely completes his transformation from ecommerce pasha to media mogul -- a transformation that’s been taking place before our eyes for years.
The Amazon chief is eminently qualified to be a newspaper owner: He’s rich; he’s innovative; and he’s willing to live with slim profits. Jeff Bezos has a very whimsical attitude when it comes to his personal stable of acquisitions–maybe he just wanted a newspaper to even it out a bit. [He] has also invested in such long-shot projects as Blue Origin, an aerospace startup, and the Clock of the Long Now, a timepiece being built in the desert to keep time for 10,000 years.
It's not just about the demise of newspapers. It's about the rise of individual fortunes so vast they can buy national institutions. The $250 million [he] paid for this newspaper is roughly 1 percent of [his] net worth, making it about as risky and consequential a purchase for [him] as a used 2003 Honda Civic might be for me. Jeff Bezos spent less of his net worth on The Washington Post than Sean Parker spent of his net worth on his wedding.
There will, of course, be change at the Post over the coming years. Alan Mutter, a media consultant and former newspaper editor, noted this deal marks the first time a newspaper has been bought by a ‘‘digital native,’’ not someone entrenched in the print medium. Jeff Bezos is a man on a mission -- a mission to change both the physical world and the world of ideas. Amazon has embodied, more than any other of the giants that rule our new landscape, the faster-cheaper-further mindset that scratches away daily at our communal fabric: Why bother running down to the store around the block if you can buy it with a click? Craigslist’s Craig Newmark has not bought the Post, thank goodness -- that would be too much to bear. But Amazon's Jeff Bezos as the white knight provokes only slightly less shock and dolor. The iceberg just rescued the Titanic. After grinding the newspaper industry beneath its steel-tipped boots, the Internet suddenly turned all sweet and sugar daddy.
In his position as Amazon CEO, Bezos has seemed pessimistic about the prospects of the old-media intermediaries that stand between consumers and the individual creators of content. He wrote in Amazon’s 2011 letter to shareholders that even “well-meaning gatekeepers slow innovation,” and he’s moved to take those gatekeepers out of the equation: By allowing authors to publish their own books directly to the Kindle, for example, as well as by funding proprietary television shows through Amazon’s Studios division.
“There is one thing I’m certain about: There won’t be printed newspapers in 20 years,” [Bezos has said]. “Maybe as luxury items in some hotels that want to offer them as an extravagant service. Printed papers won’t be normal in 20 years.”
He's famously run Amazon as a deliberately low-margin, growth-oriented firm. If he runs the newspaper in anything like that same spirit, it'll be an excellent thing for the world, whether or not it works out as a business. He also knows what's it like to fail online: In 1999, he bought a majority stake in Pets.com, as the Post noted its announcement, in addition to putting $60 million into Kozmo.com, neither of which exist any more.
Unlike Sam Zell, who took on the struggling Tribune Company in a convoluted deal that ensured he couldn't lose money, Bezos is buying the Post outright, in cash, for $250 million, and taking it private. While the Post's print side has been bleeding money, the web portion, which recently introduced a pay wall, has actually been improving. It won't take too much more growth -- or too many cuts -- to make the Post profitable. He's paying a roughly .5-times revenue multiple on the whole and a two-times revenue multiple on the Web business. If those numbers were coming out of a tech startup -- where valuation multiples can go as high as six-times revenues -- Bezos would have gotten a huge bargain. He] is not taking Slate.com, just the newspaper and its websites. But still, he's paying $250 million for a business that has $581.7 million in annual revenues, about one-fifth of which is a $100 million-internet business which is growing.
From William Randolph Hearst to K. Rupert Murdoch, owning an influential paper (or a dozen) has been seen by billionaires as a shortcut to achieving influence in government affairs. Someone with $25 billion doesn’t buy the Washington Post as much for its pathetic business prospects as he does for its outsized influence. Amazon already spends millions of dollars lobbying federal officeholders every year [and] recently landed a $600 million CIA computing contract. . . so reporters who have spent their careers trying to penetrate government secrecy now have a "huge CIA contractor" for a boss.
This is not just a case of Bezos looking to buy, it’s a case of the Graham family looking to sell. The decision to sell came from a simple calculation: The Washington Post is a public company, and it doesn’t have infinitely deep pockets. They looked to the future and saw that they’d have to keep cutting. The implication is that Bezos doesn’t have to keep cutting, and won’t keep cutting, though nobody really knows.
Bezos said he understands "the critical role the Post plays" in the nation's capital and for the country as a whole. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future."
1. Los Angeles Times
2. Chicago Tribune
3. Washington Post
8. Wall Street Journal
9. USA Today
11. Washington Post
12. Washington Post Wonk Blog
14. David Frum, Twitter
15. Washington Post
16. Adam Frucci, Twitter
17. Washington Post
18. Boston Globe
19. Huffington Post
20. New Republic
25. New York Magazine
26. The Week
27. Business Insider
28. Financial Times
30. Daily Me
32. Washington Post
33. Washington Post
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