Tech Watchers "Wait & See" How Amazon Boss Bezos will Apply Novel News Gathering at Washington Post
Jeff Bezos Pays $250 Million and Takes Home the Post
In an unsurprising announcement, Amazon's CEO Jeff Bezos has a made a deal to purchase the Washington Post.
The Post has been under the ownership of the Grahams for almost a century.
Donald Graham, CEO of the Post was quoted as saying, "Years of familiar newspaper-industry challenges 'made us wonder if there might be another owner who would be better for the Post." He added, "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 price tag on the purchase is $250 million.
The move to buy the newspaper was described as a decision made by Mr. Bezos "in a personal capacity."
The Washington Post is the parent company of test preparation firm, Kaplan and other print publications that will remain under the ownership of the Grahams family. The sale is expected to close within sixty days.
The sale of one of the country's flagship papers was attributed to declining circulation. With the advent of online papers and publications, digital papers have replaced print publications as the standard for news. With the drop in advertising revenue, print publications have found it difficult to survive.
The Post is famous for its coverage of the Watergate scandal and other newsworthy material. However, the paper found it difficult to migrate to a digital format online.
According to tech analyst Leo Kelion, the acquisition of the Post will make Bezos an influential figure in the content creation business.
Jeff Bezos' latest move helps expand his role as one of the most influential content creators in the United States. Recently, Amazon's e-book wing sold a million copies.
The transaction is unique since The Washington Post falls under the direct control of Bezos and Amazon has no role in the business.
In a memo to the employees of the Post, Bezos made it clear that he will not be running the paper on a day-to-day basis. However, he did say that the creativity and experimentation were crucial going forward.
The newspaper industry will be watching intently to observe how Bezos will maneuver his political influence in the paper. Bezos recently agreed with the Justice Department to levy taxes on the online retail business.
Brad Adgate, Horizon Media analyst told BBC News the Post has been "declining in circulation especially among young readers."
He added, "I always thought this would be a newspaper that would be able to withstand the digital tide because of the name and the prestige. It is, next to the New York Times, the most prestigious paper in the country." The Alliance for Audited Media listed the newspaper as No. 7 in popularity among the most popular dailies. However, it saw a drop of 6.5% in 2012.
In a post on the Washington Post website, Bezos wrote, "There will, of course, be change at The Post over the coming years...The internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs."
An industry analyst at the Altimeter Group. Rebecca Lieb, was quoted as saying, "We've all been broadsided by the acquisition. There are few things that come as a surprise any more but this one did," reported the BBC. The BBC's Michelle Fleury in New York commented, " (The Post) has turned to one of the innovators in the internet world."
Despite his interest in the Post, Bezos said he has no interest in purchasing its sister publications - TheRoot.com, Slate magazine, and Foreign Policy - in a filing with the SEC in Washington D.C.
In a related news story, Newsweek was sold to IBT Media. Newsweek published its first copy in 1933 and was once owned by the Washington Post.
"We believe in the Newsweek brand and look forward to growing it, fully transformed to the digital age," Co-founder and chief executive of IBT Media, Etienne Uzac said.
"We respect the brand's long history of delivering high-quality, impactful journalism and believe this aligns well with IBT Media's culture and mission. We look forward to working together to create a profitable and successful enterprise," he added.