sale of the Washington Post to Amazon founder and multibillionaire Jeff Bezosfor $US250m — just under 1% of his wealth — reads like the coda of a Tom Wolfe novel. A great American institution is bought by an internet entrepreneur, part of a Silicon Valley elite, whose rocket-ship ride to stratospheric wealth has coincided with the implosion of the galaxy of influential brands born before the era of the microprocessor.
It is the first newspaper purchase in over a decade that has shaken American journalism out of its sleepwalk to oblivion, and made the wires hum with something other than bad news. Has this changed the narrative of inevitable decline? A seriously successful son of the new economy has dropped a small amount of pocket change on a title of international significance, but uncertain outlook. Bezos is a man who can afford $US42m to spend on a giant clock built inside a mountain — which, one might speculate, is a relatively safe investment compared with a newspaper that has recorded seven consecutive years of declining income.
The motivation of Bezos to buy a newspaper will, no doubt, be picked over in the financial pages, but this is not a business deal; it is a cultural statement. News is not the industry that it once was, or an industry at all. It is a cultural good, the format and delivery of which needs remaking for a different set of consumer needs and capabilities.
It is highly unlikely that the immediate key performance metric for the Washington Post’s new owner will be increased profitability and a soaring share price. Or any share price. In a finely-worded, short and poignant letter to the staff, proprietor Don Graham noted that in discussing the Post’s future with publisher Katherine Weymouth, they “began to ask ourselves if our small public company was still the best home for the newspaper”.
Graham noted that it was seven years of declining revenue for the Post, the great title, the Watergate paper that downed a president, that had been in his family since his grandfather Eugene Meyer bought it out of bankruptcy in 1933. The only way forward for the company’s management of the paper, Graham noted, was for cuts. It is a mark of the love that Graham has for the Post that his best solution to safeguard its future was through a sale.
At the end of a week that saw the Boston Globe sold for $US70m by the New York Times Company, to Red Sox owner John W Henry, it seems that the lock gates transferring newspapers from a gilded past, through an unsustainable present, to an unknown future have creaked open. Newspapers are now restored to their former status as playthings of the rich, rather than market-driven profit centres.
Even more interesting, perhaps, is the transmission of west coast wealth to the crisis-torn content economy of old-fashioned east coast influence factories. The cultural divide between the thought processes of the engineering-oriented Silicon Valley and the words-based elites of the East, in politics and media, is vast. The low esteem in which each holds the other is often breathtaking to observe.
It was a “no contest” contest, an unfair fight, in which the new economy of the west coast understood how to build relationships with people, sell them what they wanted, charm the stock market — and do it at a scale and speed that could not be matched by analogue businesses.
This is what Bezos has been best at, and his enforcement of a cost-cutting regime has found Amazon on the wrong end of newspaper articles about its workplace practices. Bezos is more personally successful in Silicon Valley than most of his peers, with a fortune of $US28bn, but from a background that has brushed more with the world outside Palo Alto. He was a Princeton computer science graduate rather than a Stanford PhD; he worked on Wall Street for a while before heading west and founding Amazon; he has made his vast fortune by shipping books, and tangible objects, atoms rather than bits and bytes. And he has successfully monetised the act of charging people for words on electronic devices, through the Kindle.
The “p” word is already being whispered in relation to Bezos buying the Post : philanthropy. To many American journalists, this is a dirty word, associated with news operations that are substandard and therefore subsidised. But those with wealth at their disposal continue to see the direct funding of journalism as a way of pulling levers of influence, maybe more effectively than in other arenas. Great foundations such as the Ford and the Gates have started to directly subsidise journalism, not because they feel sorry for it, but because they believe it still constitutes a benefit to society, which is not easily replicated elsewhere.
Jeff Bezos does not look like a philanthropist, and anyone cracking open the champagne in anticipation of the return of wealth to journalism should read Bezos’ original letter to Amazon shareholders written in 1997 (pdf), where an effective strategy of minimising costs and maximising output is chillingly outlined. However, in that letter, there is a paragraph entitled “It’s All About the Long Term”. Employees at the Post will fervently hope it is.
What we cannot know about Bezos, because he has never been tested, is how he will like the irrational world of newspaper ownership, where the media gaze is more intense per dollar invested than in any other domain. How will he react — especially after Amazon’s recent clinching of a $US600m contract to provide cloud services to the CIA — to the flow of stories from his own publication on the NSA and its covert pact with the tech industry to trace our every move? How will he like his Amazon workplace practices scrutinised by his own paper? How will he like being in a world where they greatest measure of success is to irritate, damage or, at best, remove a president and other public officials?
Silicon Valley is full of middle-aged men who, a dozen years ago, proved they could make the impossible come true. With his penchant for 10,000-year clocks and a reputation built on long-term strategy, Bezos might be embarking on the project that most tests his patience. But if he can really weld something transformational out of old media with his new money, he will have beaten bigger odds in a more spectacular style, than any he has so far faced.
This article originally appeared on guardian.co.uk
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
Business Insider Emails & Alerts
Site highlights each day to your inbox.