EcommerceBytes-NewsFlash, Number 3124 - August 06, 2013     1 of 4

Amazon's Bezos to Buy Washington Post for $250M

By Kenneth Corbin

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Amazon founder and CEO Jeff Bezos has reached an agreement to purchase The Washington Post for $250 million in cash, bringing to an end eight decades of family ownership of one of the nation's most prominent and influential newspapers.

Bezos is purchasing the paper from the Washington Post Co. on his own, with no connection to Amazon.

In a letter to Post employees, Bezos acknowledged that many would have concerns about the ownership transition, but stressed that he is making the purchase with a strong commitment to quality journalism and that there would be no sharp turn in the paper's direction under his stewardship.

"The values of The Post do not need changing," Bezos wrote. "The paper's duty will remain to its readers and not to the private interests of its owners. 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."

Bezos said that the management at the Post will remain intact, with Katherine Weymouth remaining as publisher and CEO of the paper and Martin Baron continuing as executive editor.

Weymouth addressed the purchase in a letter to readers, praising Bezos as "a proven entrepreneur who, like the Graham family and this company, takes the long-term view in his investments. While he expects The Post to remain profitable, his focus is on the essential role that our journalism has on dialogue and the flow of information in our society," Weymouth wrote.

The move comes amid sustained declines in subscriptions and advertising revenue across the newspaper industry, with scores of publications trimming headcount, publishing less frequently or abandoning their print editions entirely.

As owner of the Post, Bezos could provide cover for a gradual transformation of the paper as it continues to reorient itself around digital platforms. Bezos famously riled analysts and investors as he presided over a slow, customer-focused approach to building Amazon, eschewing short-term profitability for longer than many on Wall Street appreciated.

The purchase follows closely on the news that Boston Red Sox principal owner John Henry had reached an agreement to purchase the Boston Globe from the New York Times Co., another case of a major metropolitan daily going private.

For Bezos, this is not his first foray into the media business. Earlier this year, he dropped $5 million in the website Business Insider, though he has never been involved in the newspaper industry.

Don Graham, the fourth-generation head of the Washington Post Co., said that the decision to sell was wrenching, but that it had emerged as the best option to keep the paper viable amid seven years of declining revenue.

"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," Graham wrote in a letter to employees. "Our answer had to be cost cuts, and we knew there was a limit to that. We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed."

The Washington Post Co.'s newspaper division has seen its operating revenue tumble 44 percent over the past six years.

Bezos said that he does not have a prescribed plan for turning around the paper, but that no layoffs are anticipated, and the paper's current management team will remain responsible for day-to-day operations.

In addition to the flagship newspaper, Bezos is acquiring a number of other assets from the Washington Post Company, including an array of local weekly papers.

The Post reported that the Washington Post Co. will rename itself and continue as a publicly traded company following the completion of the sale, expected in 60 days.

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About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.


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