On Monday, Amazon founder and CEO Jeff Bezos surprised everyone by spending a tiny fraction of his personal fortune to buy The Washington Post. Bezos has invested in media companies before, but there's a big difference between sinking a couple of million dollars into Business Insider or giving an undisclosed amount to the libertarian Reason Foundation, publishers of Reason magazine, and paying $250 million for the seventh-largest newspaper in the U.S.
There is a fair amount of excitement and trepidation about the purchase, much of it boiling down to the question of whether Bezos has the keys to unlocking the newspaper industry's new business model. The other big question is: Why? What exactly is motivating the libertarian-leaning billionaire to plunk a sizable chunk of cash down for a money-losing enterprise whose death (at least the print version) he has prophesied?
In his letter to Post employees, Bezos said "all the correct and anodyne things, but he was not terribly revealing," says David Remnick at The New Yorker. "He rarely is." Bezos told employees that he's keeping The Post's leadership team in place, won't meddle in the day-to-day operations, or even move to Washington. ("I am happily living in 'the other Washington' where I have a day job that I love.")
And so, Remnick concludes, why Bezos "would pay a quarter of a billion dollars in cash for a newspaper remains an open question." Here, five possible answers:
1. Bezos wants to save The Washington Post, and maybe journalism
Donald Graham, whose family has owned The Post since 1933, is selling his newspaper to a man he's known for 15 years, and he trusts Bezos "to do the right thing: Invest for the long term in real journalism," says Remnick in The New Yorker. As Katherine Weymouth, The Post's publisher and Graham's niece, says: "This is the single biggest thing Jeff Bezos has bought with his own money and I don't think for a moment that he regards it as a rich man's toy."
Bezos is also suggesting that his motives are altruistic. "Journalism plays a critical role in a free society, and The Washington Post — as the hometown paper of the capital city of the United States — is especially important," he told Post staffers. And in words sure to warm the hearts of newspaper lovers everywhere, he added: "I'm excited and optimistic about the opportunity for invention."
"I'm a Bezos believer," says Peter Himler at Forbes, and one of those beliefs is that this consummate innovator "sees the resuscitation of this once powerful and profitable media brand as the ultimate geek challenge." More importantly, though, he's one of those "forward-thinking billionaires [who] have chosen to put their money behind supremely worthwhile and seemingly intractable social problems."
"If there was ever a cause that needed an infusion of tech savvy and honest money," Himler adds, "it is a journalistically independent and self-sustaining news media."
2. He's buying political influence
Bezos is above all a shrewd businessman, says Brian Dudley at The Seattle Times, and while newspapers are "limping financially" these days, "they continue to have considerable power and influence, particularly over government and especially if you're talking about The Washington Post." That surely factored into his thinking.
Yes, the Amazon founder is getting one of the nation's pre-eminent newspapers for "less than his peers may spend on a boat," Dudley says, but "the curious Seattle billionaire is also getting the best seat at the table in Washington, D.C., an opportunity to more directly influence America's future," and the keys to a journalistic institution that "nearly every adult in the U.S. has read or been affected by."
You can't escape that Bezos is "buying a lot of political influence," Brad Stone, who just wrote a book on Bezos, tells The New Republic.
We can't discard the fact that Amazon hasn't been an enormous player, at least up until the dispute over sales taxes, and in buying The Washington Post, he has a seat at the table. And I think particularly legislators and anti-trust regulators are gonna be weighing the dominance of Amazon a lot in the years ahead. [New Republic]
3. Bezos loves a new challenge — profitability be damned
"I'd guess that Jeff Bezos thinks that owning The Washington Post will be interesting, fun, and cool," says Henry Blodget at Business Insider (a site Bezos has invested in). We're talking about a man who sinks millions into passenger spacecraft and a giant 10,000-year clock, after all. "He doesn't necessarily make these investments for the money. Or bragging rights. Or strategic synergies."
If The Post is a perpetual money loser, Blodget says, it's a good bet "Bezos will be fine with that."
4. The Washington Post will turn into a money-making investment
This "isn't a charity case for Jeff Bezos," says Lydia DePillis at The Washington Post. And "there's little reason to believe this is a passion project," either. Bezos is buying The Washington Post to increase Amazon's cultural cachet so authors will want to use its publishing services, to provide exclusive content for Amazon's Kindle e-reader, and to "complement and amplify other regions of Amazonia," notably by selling ads.
Bezos "invented e-commerce," newspaper analyst Alan Mutter tells The Washington Post, "you don't think there's going to be e-commerce on every page of The Washington Post?"
On its face, The Washington Post purchase "may sound insane," says M.G. Siegler at TechCrunch. But Bezos "is no fool, he's a genius," and by buying a storied newspaper brand "he's likely once again playing chess while we're all trying to parse the way he's playing checkers." This is a long game for Bezos, and he is counting on the fact that you don't understand his strategy until he wins.
5. He's just part of a new generation of family-owned newspapers
Bezos' purchase of The Post has "prompted a fair amount of gnashing of teeth and rending of garments" about the death of the family-owned newspaper and "the possible trampling of American democracy by egomaniacal newspaper-buying billionaires," says Matthew Yglesias at Slate. It's true that the Sulzbergers at The New York Times, and maybe Rupert Murdoch, are the last of a once-great line of newspaper families, "but no family company can last forever."
"Private ownership, most likely by idiosyncratic individuals willing to take risks on ideas that might fail," is the best bet for good journalism, Yglesias adds. Bezos' purchase, plus the recent sale of The Boston Globe to Red Sox owner and quantitative trading pioneer John Henry, is actually sort of a revival of the necessary family-owned newspaper.
Bezos' move — and even the potential purchase of Tribune newspapers by the Koch brothers — is close enough for a 21st-century media landscape. These transactions should be seen not so much as the end of an era, but as a necessary recycling of control. A business that's always somewhat depended on bigwigs more interested in challenge and prestige than pure profit maximization is naturally going to need some new bigwigs once in a while. It's the circle of life. [Slate]