The best news for the ailing news business in a long time is Jeff Bezos’s $250 million purchase of The Washington Post. Those who entertain the knee-jerk reaction that this acquisition of a legacy media operation is simply Bezos laying down dead presidents for “a billionaire’s bauble” are sorely mistaken. The news and information economy desperately needs disrupters and innovators of Steve Jobs-like ambitions, and who else but Bezos fits that description? The Amazon founder wouldn’t have opened his checkbook if he himself didn’t think he was that guy.
Sure, the Post’s price tag is a fraction of the Amazon founder’s $20 billion-plus fortune. Yet this is a bet by one of the savviest disrupters of our time, one who has revolutionized publishing and the selling and marketing of virtually every consumer product imaginable. Much like Jobs, Bezos is a modern-day Edison who takes the long view, Wall Street be damned. Bezos intimately understands the power of respecting the crowd and exploiting the cloud. He’s snapped up a number of great outfits, including Internet Movie Data Base, Box Office Mojo, Zappos, Audible, and Good Reads. He’s made investments in Twitter, Airbnb, and MakerBot. His Amazon Web Services has been a huge boon to cloud computing and helping a raft of tech companies by providing much-needed bandwidth. He recently put $5 million in Business Insider.
As Matt Buchanan pointed out on The New Yorker’s website, Bezos has invested in technologies to make affordable space travel a reality, and Amazon’s mission statement is: “We seek to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators.” An owner with that expansive mindset and portfolio is exactly what the Washington Post needs, and what the news industry needs.
Within a handful of days, several legacy news brands have changed hands. The New York Times dumped The Boston Globe for $70 million (over $1 billion less than what they paid for it) to commodities trader and Boston Red Sox owner John Henry. Barry Diller’s IAC got rid of beleaguered Newsweek to privately held financial news company IBT Media for an undisclosed amount. BuzzFeed aggregated a bunch of tweets under the heading “What’s The Washington Post Worth?” Some of the ballpark valuations: a quarter of the price of Tumblr and Instagram, one-third of Snapshchat’s estimated valuation, one-sixth of the price of the Washington Redskins, $65 million less than the HuffingtonPost’s sale to AOL, and half the estimated worth of Jay Z. That says a lot about the state of the news and information economy. It also means that in the hands of the right buyer, legacy journalism brands like The Washington Post are a great value.
Bezos has made the usual buyer noise that he supports current management and won’t interfere with the editorial side of the operation. I don’t believe it for a second. Didn’t Rupert Murdoch say pretty much the same thing when he bought The Wall Street Journal? Bezos is likely to quickly divide the wheat from the chaff at the Post. Look for innovation in everything from news-gathering to advertising to distribution. And don’t believe for a second this is Bezos’s last acquisition in the news and information space. I have to believe he’s looking around for value where most others see news organizations as just a license to burn cash.
News Brahmins have rightly noted that the Post should be monitored on how it does or doesn’t cover allegations about poor working conditions in Amazon’s warehouses or its machinations to countervail government regulation, whether warring over sales tax or predatory practices in the publishing business. Critics have pointed out that Amazon is anything but transparent in its own dealings with the press. All those are causes for concern. Amazon should, for instance, revamp its mission statement to include being as worker-centric as it is customer-centric. But it doesn’t mean this purchase isn’t exciting.
Other news organizations that have been on the ropes, including Bloomberg Businessweek and Forbes (an investor in Techonomy), have been reinvigorated with new management and ownership, a commitment to quality, and openness to innovation. It’s interesting to note that both those operations are privately held, which affords them much-needed flexibility. I believe Bezos’s Post may provide the blueprint for how a storied legacy media company can reinvent itself and become a profitable, vital, quality news organization.
You can follow J. Max Robins on Twitter @jmaxrobins.