Amazon founder Bezos snaps up Washington Post
Citizen Kane 2.0 forks out $250 million for loss-making bauble
Along with funding the creation of a clock that will run for 10,000 years, recovering the rockets from the first moon mission, and trying to shake up the commercial space industry, Amazon founder Jeff Bezos today put his dosh into another tricky, long-term enterprise: a print newspaper.
The $250m cash acquisition for The Washington Post, affiliated publications, and some 2,000 employees was announced on Monday, and represents a massive bargain when compared with the $1bn Facebook paid for photo-spaffing app Instagram and its staff of 13 young employees.
The deal sees Bezos himself – not Amazon – putting his dosh into the troubled publication group. The Washington Post Company's newspaper division has had a 44 percent decline in revenue in the past six years and lost $39m in 2012, according to a WaPo article on the buy.
"I don't want to imply that I have a worked-out plan," Bezos said. "This will be uncharted terrain and it will require experimentation."
No layoffs are "contemplated," and Katharine Weymouth will remain as publisher and chief executive, and exec editor Martin Baron will continue on as well.
Taking on a loss-making business will be familiar to Bezos: Amazon lost $7m in its most recent quarter, and expects to lose far more next time around. Investors aren't troubled because there's evidence that all the money that could be realized as profits is instead being poured back into the business to fund future expansion.
But e-retail and print media are very different businesses, and where one is an immature market that rewards Davids that want to be Goliaths, the other is a mature ecosystem in which all the giants are growing old and ceding ground to younger, leaner competitors – like online-only El Reg, for example.
The sale did not involve Slate.com, Root.com, or Foreign Policy magazine, but did involve several regional newspapers, the Robinsomn Terminal production plant, and the Comprint printing operation, alongside The Washington Post.
"There will of course be change at The Post over the coming years," Bezos said in a letter addressed to the newspaper's employees. That's essential and would have happened with or without new ownership. 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." ®