Bezos, 49, struck a deal announced Monday to buy the venerable Washington broadsheet and other newspapers for US$250 million. It was a startling demonstration of how the Internet has created winners and losers and transformed the media landscape.
Bezos pioneered online shopping, first by selling books out of his Seattle garage in 1995, then with just about everything else. In doing so, he has amassed a US$25 billion personal fortune, based on the most recent estimates by Forbes magazine.
Meanwhile, The Washington Post, like most newspapers, has been losing readers and advertisers to the Internet while watching its value plummet.
The newspaper became internationally known after its investigation of the Watergate scandal that led to the resignation of President Richard Nixon, the basis for the Robert Redford film “All the President's Men.”
Bezos is buying the newspaper as an individual. Amazon.com Inc. is not involved.
Bezos said to Post employees in a letter distributed to the media 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.”
Washington Post Co. 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 in his letter to Post employees. “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 newspaper's publisher and CEO and a member of the Graham family that has owned the newspaper 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 newspaper's employees.
“I think we're all still in shock,” said Robert McCartney, one of the newspaper's Metro columnists 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. local 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 Bezos is committed to quality journalism and has no political agenda. There was a long standing ovation 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.”
Fredrick Kunkle, a metro reporter and a union leader at The Post, said there is also apprehension among staff. “The Graham family has been revered in this town, rightly so,” he said, adding he saw at least one person at the meeting wipe away tears. “We all have a lot of questions.”
Carl Bernstein, who helped crack the Watergate scandal as a reporter at the Post in the early 1970s, expressed hope on Monday: “Jeff Bezos seems to me exactly the kind of inventive and innovative choice needed to bring about a recommitment to great journalism,” he said in a statement.
Allen & Co., which held a high-level conference for media and technology executives in 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 US$70 million purchase of The Boston Globe, which was announced Saturday.
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