In a deal that underscores the decline of print media and the rise of digital media, billionaire Jeff Bezos, founder of Amazon.com, has signed an agreement with The Washington Post Company to acquire the company's newspaper operations for $250 million, the news organization said on Monday.
In a statement, Donald Graham, the Post's CEO, cited Bezos' "proven technology and business genius, his long-term approach and his personal decency" as the salient factors in his family's decision to sell the newspaper business it has overseen for four generations. Half a dozen other would-be buyers were reportedly considered.
Bezos is purchasing the Washington Post and other newspapers on his own behalf and not for Amazon.com. The newspapers include El Tiempo Latino, the Express, Fairfax County Times, the Gazette Newspapers, Greater Washington Publishing and Southern Maryland Newspapers.
Post Co. properties like Foreign Policy, Slate.com and TheRoot.com are not part of the deal. The Washington Post Company will adopt a new, as yet-undetermined name and will continue operating businesses like Kaplan, WaPo Labs and SocialCode, among others.
The sale comes following seven years of declining revenue, a story that's all too common among newspapers. Graham, in a letter published by The Washington Post, indicated that efforts to innovate hadn't reversed declining revenue.
"Our answer had to be cost cuts and we knew there was a limit to that," Graham wrote. "We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed."
Yet, the innovation Bezos promises doesn't offer certainty of success. In a letter to Post employees, he acknowledges that change will be necessary and that he isn't sure what form it will take.
"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," Bezos wrote. "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."
Whatever form that Bezos' experimentation takes, it appears likely to be data-driven. Bezos said, "Our touchstone will be readers, understanding what they care about — government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports — and working backwards from there."
But Bezos isn't going out on a limb to experiment immediately: He plans to keep the existing management team in place.
Ownership of the leading newspaper in Washington, D.C., will also afford Bezos the opportunity to exercise an editorial voice on national policy matters that concern him or affect the company he founded, such as a pending bill that, if passed, will allow states to collect sales tax from online merchants.