Just imagine the headlines if
) had bought a controlling interest in the
newspaper for $250 million.
Investors in Amazon are resigned to watching company founder Jeff
Bezos plough fabulous sums into expansion, and wait patiently for a
payoff in the distant future. So distant, in fact, that in its
latest quarter, the company took in $15.7 billion in revenue and
still managed to lose $7 million on the bottom line.
But buying a money-losing newspaper? Amazon's investors would have
gone all Kingslayer on the dude.
That's why Monday night's big headline was: "Bezos Buys the
Washington Post." Surely a newspaper is no crazier a gamble than
space colonization, another venture that Bezos is personally
dabbling in. As the world's 19th richest person, worth about $25
billion, Bezos can buy a lot of crazy.
The question is, why the
Here's as good a guess as any: He wants to reinvent the newspaper
business. It may sound as old-school as
, but it's not.
News on the Web has intrinsic qualities that make it far better
than it ever could be in print. Unfortunately, there's no money in
it, or very little so far, and approximately 60% of that goes
) in the form of advertising revenue.
Meanwhile, at Amazon, Bezos has already begun to produce as well as
distribute content, through such ventures as the Amazon book
publishing arm and Amazon original video programming.
Amazon is also making a good chunk of change-more than $600 million
last year-on advertising sales. Almost under the radar, it is
making money on ad placements in its own search results, sucking
money that might otherwise have gone to the lackluster Google Shop,
if anyone knew it existed.
So, his new toy will allow Bezos to experiment with ways to package
advertising and content (and oh, how his new employees will hate
that word), in ways that are appealing to people on the Internet,
millions of whom already download Amazon media onto Amazon devices.
If he can pull it off, it seems reasonable for Bezos to move the
from his own balance sheet to Amazon.com, Inc. That can't happen
until it looks like a sound investment to Amazon's shareholders,
who don't have his patience or his deep pockets.
For the time being, Bezos seems psyched for his new role as
In his announcement,
he sounds like every city editor who ever lived: "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."
If you don't like that explanation for why Bezos bought
, here are a few of the others that popped up within hours of the
announcement, for what they're worth:
instantly makes Bezos "a player" in Washington, DC.
What was he before, chopped liver? Last week, President Barack
Obama flew to Chattanooga to visit an Amazon warehouse. And are
you also wondering who ratted out
) to the government when it
got the book publishers
together to chat about increasing their prices? In any case, the
Bezos name is not unknown in Washington.
Buying media is a thing that billionaires do.
This comes from Bloomberg News, and
it ought to know
. Others in the club include Warren Buffett, who owns some
community newspapers, and John Henry, who just bought the
He wants to be Rupert Murdoch.
Not really. The owner of
) has built an ultra-conservative empire of newspapers and talk
television. Bezos, who is believed to lean libertarian, keeps his
politics mostly to himself, and is a positive cheapskate as a
political donor. His only known political donation of any size
was to a campaign for gay marriage in Washington State.
But why bother with all the other pundits when we can turn to the
itself for coverage?
When the announcement was made in the newsroom, "the mood was
the newspaper reports
Yes, it turns out that the folks who broke the Watergate scandal
never saw this one coming. They were totally gobsmacked.
The Washington Post Co.
) were pretty cheerful, though. Immediately after the announcement,
in after-hours trading Monday, the stock closed up 5.06%, to
For $250 million, Bezos is getting the flagship newspaper, plus a
number of regional Washington-area newspapers and DC insider
The Washington Post Co. will change its name, and continue as owner
of broadcast and cable television assets, as well as the Kaplan
Inc. educational services company and the website Slate.com.
From the view of WPO investors, $250 million ought to sound like a
good deal. Ironically,
, which in its heyday was owned by The Washington Post Co., was
also just sold, to IBT Media. The price was not disclosed. But
since the magazine last changed hands in 2010, for $1, and has
since closed its print publication, the price is unlikely to be