Here’s one nobody in the tech arena would have called. Jeff Bezos just bought storied newspaper The Washington Post for $250 million. But why?
So Amazon bought a newspaper?
Nope, Jeff Bezos, the guy who basically is the face of Amazon, bought a newspaper; the sale is directly to him personally through his investment company. And he only bought the Washington Post from the Washington Post Company, which probably needs to find a new name. Interestingly Bezos seems not to care about the Post Company’s other assets, which include Slate and Kaplan, Inc.
Aren’t newspapers a bad investment?
Try “terrible” or “nightmarish.” Bezos basically bought the Post for two years worth of overall revenue. Newspapers are so badly off that the Boston Globe just sold for $70 million to the owner of the Red Sox, and people familiar with the matter say that bid was the only one from somebody interested in keeping the paper in print.
So why did he drop $250 million on a bad investment?
Because Jeff Bezos is best described as “eccentric” when it comes to his own money. This is a guy who spent millions to dredge the ocean for Apollo 11′s rocket engines. He put $42 million into a clock inside a mountain.
Will there be any overlap between Amazon and the Washington Post then?
Plenty, most likely. Bezos is eccentric, not stupid. He essentially works in the publishing industry, so it’s not unreasonable to assume that Amazon is about to, say, offer Prime subscribers access to the Post on their Kindles. But it’s clear that Bezos wants there to be a layer of separation between the two businesses, which is why he bought it personally.
I’m still trying to figure out why he spent a quarter of a billion dollars on the Washington Post.
The most important thing to remember about Bezos is that he plays a long game. Blue Origin, his spacecraft company, has yet to turn a profit, but Bezos firmly believes that space travel and suborbital flight are going to be incredibly popular a few decades from now, and he’s trying to get in on the ground floor of that.
And that’s what makes his purchase interesting. It’s worth noting that Amazon is, in addition to a big-box store without the screaming kids, the most powerful digital publisher in the entire world. There is literally not a newspaper on Earth, not even the New York Times or the Wall Street Journal, that now has access to the resources the Post does. It’s clear Bezos sees an opportunity to create a news machine that spans the world.
It’s also worth noting that the newspaper business is flailing in part because of denial. It’s not that journalism isn’t important, but one thing most of the bellyaching about the undervaluing of newspapers fails to take into account is that most people bought the newspaper for the want-ads. It’s not a coincidence that as Craigslist took off, newspapers tanked.
Bezos clearly sees a role for newspapers in the future. The question, though, is in what form. Either way, the newspaper industry just got interesting.