Jeff Bezos, CEO and founder of Amazon, will buy The Washington Post for $250 million. He will pay cash for the publication and it will not be associated with Amazon in any way.
The Root, Foreign Policy and Slate magazine are not part of the deal — they will remain with The Washington Post Co. However, The Washington Post Co. will see a name change in the future.
Bezos’ purchase ends four generations of family ownership by the Graham family. Donald Graham, chairman and CEO of The Washington Post Co., said that financial pressures and refusal to keep cutting costs is what led to the sale.
“Our revenues had declined seven years in a row,” said Graham. “We had innovated and to my critical eye our innovations had been quite successful in audience and in quality, but they hadn’t made up for the revenue decline. Our answer had to be cost cuts and we knew there was a limit to that.
“Everyone at the Post Company and everyone in our family has always been proud of The Washington Post — of the newspaper we publish and of the people who write and produce it. I, along with [Post CEO and publisher] Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post. 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.”
Bezos made sure to address the staff at The Washington Post, reassuring them that the publication will remain true to its journalistic standards and ethics.
“The paper’s duty will remain to its readers and not to the private interests of its owners,” said Bezos in a letter to staff. “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.”
Amazon CEO Jeff Bezos [Image Source: Forbes]
Many executives currently at The Washington Post will keep their positions, including Weymouth, Stephen Hills (president and general manager), Martin Baron (executive editor) and Fred Hiatt (editor of the editorial page).
The Washington Post Co. will retain its interest in some real estate assets, such as the headquarters in Washington, D.C.
Bezos could be the right guy to bring The Washington Post deeper into the digital era. Not only is he the leader of the e-shopping website Amazon, but he also developed the Kindle series of e-readers and tablets. These devices have transformed the way we read books, magazines, newspapers, etc. With his expertise in combining technology and reading, it only makes sense that he be the one to take hold of the newspaper business.
Traditional newspapers have had a hard time staying relevant in the digital age. People no longer want to pay for a subscription and wait for the physical newspaper to come to their door. The Internet offers news immediately with a constant stream of updates, and people can read it anytime through a PC, smartphone, tablet or any other internet-connected device. Even better yet is that most news outlets offer their articles for free online, with some just now putting up paywalls. But even the online subscriptions are cheaper than those of physical newspapers.
Bezos at the helm of The Washington Post could help it adapt to this shift in mediums and pull the paper out of its financial rut. The Washington Post Co.’s newspaper publishing division revenue fell 1 percent year-over-year to $138.4 million in the second quarter.
The Washington Post Co.’s shares increased about 5 percent to $597.50 in after-hours trading.
Bezos has also purchased the Express newspaper, Fairfax County Times, The Gazette newspapers, Southern Maryland Newspapers, El Tiempo Latino and Greater Washington Publishing.
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