Three Reasons for Jeff Bezos to Buy The Washington Post

Maybe He Wants A Soapbox, Maybe He Wants To Make Money

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After the shock passed Monday that Amazon founder Jeff Bezos had agreed to buy The Washington Post, talk quickly turned to why the billionaire tech innovator would want it.

Jeff Bezos
Jeff Bezos

Mr. Bezos is paying $250 million in cash for the Post as well as sibling newspapers including the Fairfax County Times, El Tiempo Latino, Express, The Gazette Newspapers and Southern Maryland Newspapers. He is not acquiring the Washington Post Company's Slate website or SocialCode, the social marketing agency it owns.

Why would Mr. Bezos, whose Amazon transformed retail and Kindle disrupted the book business, buy a traditional newspaper when that industry is in decline?

A rep for Mr. Bezos did not respond to a request for comment. But here are three potential reasons, which together might make a persuasive case.

1. He's going to save journalism -- or at least The Washington Post.

In a FAQ about the deal sent to Post staffers on Monday, the company said no layoffs will result from the transaction, though Mr. Bezos did promise unspecified changes down the road. He has also pledged to stay out of the daily operations of the paper, leaving that instead to the Post's current leaders.

In his letter to Post staff, Mr. Bezos extolled the many virtues of the Post as a journalistic enterprise and praised the company's chairman and CEO, Don Graham.

"I have had the great pleasure of getting to know Don very well over the last 10 plus years," he said. "I do not know a finer man."

This looks like "a white night scenario," said Ken Doctor, a media analyst at Outsell. "The Graham family looks at the longer term perspective of the paper they built, and they decided they need a white knight."

What Mr. Bezos can do for the Post is provide it with a cash injection when the paper needs it most – as it shifts its capital investment from print to digital, according to Mr. Doctor.

Perhaps Mr. Bezos will even help reinvent the 21st century reading experience.

"Amazon is the best company on the planet in terms of user experience," Mr. Doctor said. "You could have a breakthrough of sorts if he considers what the next generation reading experience should be. That's what the newspaper needs."

2. He's going to use it as a soapbox.

Although Mr. Bezos has not been particularly philanthropic or politically outspoken, much of the speculation about his reasons for buying the Post have turned to politics and securing influence for Amazon in Washington.

"Maybe he wants a soapbox," said Susan Bidel, an analyst at Forrester. "Other billionaires have chosen to do that."

Wealthy family ownership is common to the newspaper industry, although the families generally swear they're not in the game for the influence. The Koch brothers reportedly have their eyes on Tribune Company newspapers such as the Los Angeles Times as part of a plan to increase their influence over politics.

Despite his current lack of political fervor, buying the Post might be a way for Mr. Bezos to grab a courtside seat in Washington and shape the conversation, said Jason Moyer, partner at Brand Value Advisors.

"I don't know if it's the most cost effective way, but it's certainly a blanket strategy to potentially influence policy whether that's around internet taxation or possible legislation," Mr. Moyer said.

As the Post reported, Mr. Bezos gave $2.5 million to help pass a referendum to make same-sex marriage legal in Washington state. And Amazon has plenty of interests in policy made in Washington, including the taxation of web-based sales and immigration policy, which impacts the ability of tech companies to hire skilled workers from abroad.

3. He's going to make money from it.

Lost amid the speculation that Mr. Bezos is journalism's savior or a rich man looking for a bullhorn is the simple idea that maybe he wants to make some money. After all, Mr. Bezos is a billionaire, who, as Mr. Doctor pointed out, likes to play the long game. At Amazon, he's continually forsaken short-term profits for longer-term goals with what Mr. Bezos calls "customer centric focus."

"Our energy at Amazon comes from the desire to impress customers rather than the zeal to best competitors," he said in a note to investors this year. "We don't take a view on which of these approaches is more likely to maximize business success."

Mr. Bezos could help trim costs and create a more efficient model of delivering the news, analysts say, which doesn't necessarily mean cutting jobs.

"Of all the players to enter the space, I think this is perhaps the most interesting," said Mr. Moyer. "When you look at an industry in extreme change and perhaps threat, I think the greatest innovation comes from folks outside the core industry."

Ms. Bidel added: "Certainly no one knows the digital space better than Amazon, so, of all possible owners, Bezos has the best chance of making the Washington Post a viable digital property."

One way to make money from the Post -- beyond selling advertising and newspapers -- could be to harness the library of content at the paper. Brands, maybe even Amazon, need content. Why reinvent the wheel by hiring journalists or creative to produce it, when you can just buy a newspaper?

"The world is clamoring for content," Mr. Moyer explaining. "Newsrooms are fast becoming the hot product. Certainly from a brand perspective, or content perspective, he potentially has a library to tap into."

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