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Monday, August 5, 2013

Amazon's Jeff Bezos Buys the Washington Post


At the Wall Street Journal, "Bezos Buys Washington Post for $250 Million: Amazon Chief's Deal Doesn't Involve Online Retailer but Shows Media Power Shift":
Amazon.com Inc. AMZN -1.06% Chief Executive Jeff Bezos is buying the Washington Post WPO +1.56% for $250 million in an out-of-the-blue deal that captures the newspaper industry's economic decline and the shift of power from old media to Silicon Valley.

The sale puts one of the most famous newspapers in the U.S.—the publication credited with breaking the Watergate scandal that led to President Nixon's resignation almost 40 years ago—in the hands of a Web businessman who rose to prominence only in the past 20 years.

It comes as many newspapers are struggling to survive. Print newspaper ad revenues fell 55% between 2007 and 2012, according to the Newspaper Association of America, as advertisers and readers have defected to the Web. Some newspapers have been forced to slash costs and in some cases file for bankruptcy. Just three days ago the New York Times Co. NYT -0.42% sold the Boston Globe for $70 million, having paid $1.1 billion for it in 1993.

The Internet is "transforming almost every element of the news business," Mr. Bezos said in a letter to Washington Post employees. "There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment," Mr. Bezos wrote.

He added that he won't be involved in the day-to-day management of the newspaper.

In an interview Monday, Washington Post Co. Chairman Don E. Graham praised Mr. Bezos's track record as a well-connected industry innovator with the patience to make difficult businesses profitable, but he acknowledged challenges.

"Jeff is a business person, not a magician. He is going to have to work as hard as everyone else to figure out the problem of news. But he brings a lot," Mr. Graham said.

Early this year, Mr. Graham brought in investment bank Allen & Co. to begin looking for someone to buy the Washington Post. The decision to sell had come after months of reflection among the company's board members, said one person familiar with the situation. Mr. Graham "couldn't see how to grow [the paper] and began to wonder if there was a better owner," the person said.

Mr. Graham spoke with many prospects directly, drawing on his extensive network in Silicon Valley. Mr. Graham, who has been an adviser to Facebook Inc. FB +2.99% chief Mark Zuckerberg, has spent years building relationships with technology titans, including Mr. Bezos, who had helped him make important hires such as Amazon veteran Vijay Ravindran, the head of WaPo Labs.

Several months ago, Mr. Graham's bankers reached out to Mr. Bezos, said a person with direct knowledge of the deal. Initially, Mr. Bezos held back, citing a lack of time to properly deal with a transaction. Then, in July, Mr. Bezos wrote an email to Mr. Graham saying, "If you're interested, I am," said another person familiar with the situation.

Mr. Bezos, who launched Amazon in 1995, is worth about $26 billion, courtesy of his stake in the e-commerce giant. As part of a planned stock sale, Mr. Bezos took in $185 million this month, representing less than 1% of his holdings. Forbes ranked him as the 19th most-wealthy man in the world, just ahead of Google Inc.'s Larry Page.

Mr. Bezos wasn't available for an interview.
Not available for a statement to WSJ, although here's his full letter at WaPo, "Jeff Bezos on Post purchase." (Via Memeorandum.)

And see, "Washington Post sale: Details of Bezos deal."

Now, if Bezos would just buy the Los Angeles Times I'd be set.

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