Amazon Founder Bezos to Buy The Washington Post

Monday, 05 Aug 2013 06:48 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Amazon.com founder and CEO Jeff Bezos will buy The Washington Post newspaper for $250 million in a surprise deal that ends the Graham family's 80-year ownership and hands one of the country's most influential publications to the tech entrepreneur.

Bezos, hailed by many as a visionary who helped transform Internet retail, called his acquisition a personal endeavor and reassured Post employees and readers he will preserve the paper's journalistic tradition while at the same time driving innovation.

The acquisition, the latest in a flurry of recent media deals including The New York Times' sale of The Boston Globe for $70 million, is a further indication of the unprecedented challenges newspapers face as advertising revenue and readership decline.

Shares of The Washington Post Company climbed more than 5 percent after hours to $599.85 — their highest level in almost five years.

"I understand the critical role the Post plays in Washington, D.C. and our nation, and the Post's values will not change," Bezos said in a letter addressed to employees and published on the newspaper's website.

"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," he added. "We will need to invent, which means we will need to experiment."

Bezos, who has built Seattle-based Amazon.com into a shopping and online technology force over the last two decades, made a small foray into media earlier this year with a small investment in Internet news site Business Insider.

The Washington Post, home to journalists such as the Watergate team of Bob Woodward and Carl Bernstein, is among the rapidly dwindling number of U.S. newspapers with a profitable business, a function of the rapid migration of readers to the Internet and other digital media sources.

Warren Buffett owns a slice of its parent company, The Washington Post Co., whose operating income has plummeted almost 40 percent since 2008, to $146.2 million in 2012.

"I doubt it is a financially oriented investment for [Bezos] as much as a chance to play a more important role as a steward of an important public trust/asset," said James Barksdale, president of Atlanta investment firm Equity Investment Corp.

Barksdale said his firm did not own Washington Post shares because he thought they traded higher than he thought justified, "probably due to the Buffett halo," he said.

Bezos will buy the Post along with other newspaper assets from The Washington Post Co. Amazon.com is to be kept separate from the Post deal, according to The Washington Post.

The deal, which caught many industry watchers by surprise, was arranged in private by Allen & Co., a boutique media and entertainment investment bank. It comes on the heels of near-unprecedented media-deal activity this year, with the Globe transaction announced just over the weekend; the Tribune Co. splitting up its publishing and broadcasting businesses; and The Los Angeles Times reportedly up for sale.

Washington Post Chairman and Chief Executive Donald E. Graham, whose family owns the paper, explained his decision to part ways with the publication, which will continue to be headed on a daily basis by CEO Katharine Weymouth.

"As the newspaper business continued to bring up questions to which we have no answers, Katharine and I began to ask ourselves if our small public company was still the best home for the newspaper. Our revenues had declined seven years in a row," Graham said in his letter to employees.

"Jeff Bezos' proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post."

The transaction covers The Washington Post and other publishing businesses, including the Express newspaper; The Gazette Newspapers; Southern Maryland Newspapers; Fairfax County Times; El Tiempo Latino; and Greater Washington Publishing.

Bezos is the world's 19th richest person with a fortune of $25.2 billion, according to Forbes magazine. His other major personal project is called Blue Origin, which aims to be one of the first nongovernment-funded ventures to send people and cargo into space, potentially winning lucrative contracts that were once fulfilled by NASA.

Bezos has already spent millions of dollars on this project, with millions more in the pipeline.

He did not elaborate in great detail on his motivations behind his latest deal on Monday. But in 2009, when asked at the debut of the Kindle 2 whether the electronic reader could help print media, Bezos said he thought there were "genuine opportunities" to save journalism.

"And we're excited about helping with that," he added, according to the International Herald Tribune.


 

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Missouri Dems: Rand Paul Was Right - Ferguson Looked Like Fallujah

Thursday, 21 Aug 2014 22:13 PM

Sen. Rand Paul was right about the dangers of militarizing local police, two Missouri Democratic lawmakers concede.

Gen. Hayden to Newsmax: ISIS Vying for World Dominance With al-Qaida

Thursday, 21 Aug 2014 21:26 PM

The Islamic State (ISIS) is competing with al-Qaida and could easily attack the United States to establish itself as the . . .

Romney and Ryan Reunite in Chicago, Call for Fair Probe in Ferguson

Thursday, 21 Aug 2014 21:20 PM

Former GOP presidential candidate Mitt Romney and his running mate, Paul Ryan, are reuniting in Chicago in their first j . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved