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Immense influence goes with Bezos’ new purchase | Brier Dudley
Is Jeff Bezos buying the Post for business reasons — to profit directly or indirectly from owning the paper with the most influence over Washington, D.C. — or out of a philanthropic urge to preserve and nurture a public-service institution?
Seattle Times technology columnist
Perhaps this explains why President Obama flew to an Amazon.com distribution center in Tennessee last week to announce his latest jobs plan.
It was an odd place to highlight economic opportunities for America’s middle class.
Odder still was the president’s decision to then distribute an interview on the topic through Amazon’s Kindle platform.
But perhaps the president was already working an angle with the new owner of his hometown newspaper.
Newspapers are limping financially, but they continue to have considerable power and influence, particularly over government and especially if you’re talking about The Washington Post.
Owners may distance themselves from news operations, but they still have influence in their communities and move in the same circles as local bigwigs.
That had to be a factor in the decision of Amazon founder Jeff Bezos to buy that particular newspaper in a $250 million deal announced Monday.
If Bezos weren’t such an enigmatic guy with a business that’s increasingly under scrutiny in Washington, D.C., many would be cheering his entry into the business.
Bezos said the right things in his letter to Post employees, telling them that the “paper’s duty will remain to its readers and not to the private interests of its owners” and that journalism “plays a critical role in a free society.”
Yet Bezos didn’t address the biggest question about his investment: Is he buying the Post for business reasons — to profit directly or indirectly from owning the paper with the most influence over Washington, D.C. — or out of a philanthropic urge to preserve and nurture a public-service institution?
Newspapers desperately need people with the vision, creativity and business skills of Bezos to save their industry and preserve their role in democracy.
Bezos may be better prepared for this role than any of the billionaires who have dabbled in newspapers over the past decade.
Consider how he entered another traditional, paper-based business — selling books — and created a diversified giant that now dominates most facets of online commerce.
Once Amazon was established, Bezos began renting out extra capacity on its infrastructure, creating on-demand computing services now used by thousands of companies and government agencies. This is similar to the way newspapers use the excess capacity of their presses to print products for other companies.
The business side of news is mostly about advertising and subscriptions, and Bezos knows as much as anyone about their potential to drive sales, traffic and customer loyalty.
Eight years ago, Amazon began selling annual subscriptions to devoted customers, providing them free shipping. Its “Prime” service has evolved into a giant digital media business, luring an estimated 10 million subscribers with access to book and movie content as well as services.
Three years ago, Amazon quietly launched a platform serving up digital ads that’s now believed to be approaching $1 billion in annual sales.
Meanwhile, newspapers have helplessly watched tech companies siphon off their ad revenue.
Hypnotized by Google and their newfound ability to analyze readership through online measurement, newspapers nearly committed mass suicide by waiting too long to charge for digital subscriptions.
Now, as the industry works through its transition into the digital age, it needs investors with lots of faith and money — money they may never make back, and faith that at least it will be money well spent, supporting a valuable public service.
Bezos is as shrewd as they come. He built an empire by squeezing efficiencies and better margins out of traditional businesses.
At the same time, he’s thrown large portions of his personal fortune toward eclectic hobbies, such as building spacecraft and recovering rocket engines off the coast of Florida.
Which side of Jeff Bezos are we seeing in the other Washington?
Maybe he couldn’t resist a great deal. Warren Buffett thinks it’s a buyer’s market for newspapers. Consider that just seven years ago, Rupert Murdoch paid $5.6 billion for the company that publishes The Wall Street Journal.
For $250 million — less than his peers may spend on a boat — Bezos is getting one of the top teams in the league.
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 chance to create a legacy extending beyond his business accomplishments.
Nearly every adult in the U.S. has read or been affected by a Washington Post story at one point or another. Let’s hope Bezos really is putting their interests ahead of its owner’s.
Brier Dudley writes about technology and business issues affecting the Northwest. Reach him at 206-515-5687 or email@example.com