Why Did Jeff Bezos Buy The Washington Post?

To one who has been predicting the demise of print media in the E-Commerce Times for over five years, it might seem odd that such a techie as Amazon CEO Jeff Bezos would buy The Washington Post. Why, even this past November, Bezos said in an interview with the German newspaper Berliner Zeitung, “one thing I’m certain about: There won’t be printed newspapers in 20 years.”

Yet, I see nothing strange about his purchase. And, from what I have read, even Silicon Valley is happy with it.

What’s going on here? The answer is surprisingly simple. For some time, technologically competent people have been wondering why there has been such a firewall within newspapers between the newsroom and the information technology people. This is why the techies have been amazed that publishers haven’t taken advantage of their IT departments in order to broaden their readership. Bezos will change all that.

While the Publishers Slept

While the publishers were sleeping, Internet entrepreneurs weren’t. They’ve been creating “things.” Things such as Circa. Circa was established by Cheezburger Network founder Ben Huh. It seeks to “slice and dice” the news so that when it gets to the individual reader, it is just what she/he wants. It eliminates the extraneous as well as the stories that the reader is least likely to read or appreciate.

I recently visited Circa’s website and it says, “News without the fluff, filler, or commentary: Circa’s editors gather top stories and break them down to their essential points — facts, quotes, photos, and more, formatted specifically for the phone. Circa makes it easier than ever to keep up with what’s going on in the world from wherever you happen to be.”

The founder of Circa, Mr. Huh, recently said, “the advantage of Circa is that by rethinking journalism from the ground up, we can build an individual relationship from the ground up… We know what you know, and what you don’t know. The shackles are completely off.”

I think that Circa is all about gathering news and then broadcasting it across various social networks and trying to attach that news to as many search engines as possible. I can see why Silicon Valley is so pleased with Bezos’ acquisition of The Washington Post. I have no doubt that it will become a technological leader in the print media world, as well as in the e-media world.

A New Business Model for Print Media

As I see it, there are still far too many print media publishers who have been taken for a ride on the inertia of motion express. Remember your early physics lessons about inertia? Remember Newton’s First Law of Motion? It is commonly stated as, “An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.” There’s a fancy formula to further explain this law of motion. Let’s skip the formula, because I was never that good with mathematics.

Suffice it to say that newspaper publishers have rested on their laurels. During that time, they have been acted upon by an “unbalanced force” while they were sleeping. Perhaps many of them had assumed that when Johannes Gutenberg invented the printing press, the printing press was the equivalent to one of those immutable axioms that we learned in science class. But all indications now point to the eventual devise of print media, and e-media has already become quite ubiquitous. Can you imagine anyone trying to take a person’s smartphone or tablet away and handing them a newspaper instead? I can’t.

The bloom is certainly off the rose when it comes to print media. A smart approach for print media publishers is to create a new business model that has as a key element the demise of the printed newspaper. Publishers would then be focused on ways to develop a user-friendly website for their newspapers. Such a website could have a firewall that one would hit after having read so many free articles. After that point, further articles could only be accessed by subscription or by paying for the individual article. Many major newspapers now have such a firewall in place.

Additionally, advertisers to a paper’s website should be targeted and pursued aggressively. Since nothing succeeds like success, the easiest way to attract new advertisers would be to continually expand the publication’s circulation. That could be done by microtargeting readers and broadcasting the news over as many social media platforms as possible, such as Facebook, Twitter, etc. Search engines should also be targeted in order to put as many portals out there as possible, thus increasing the likelihood that readers will enter a portal and find a given publication.

So does Jeff Bezos know what he is doing by acquiring The Washington Post? I certainly think so. Wasn’t it Jeff who said, “If we have 4.5 million customers we shouldn’t have one store — we should have 4.5 million stores”? As ironic as this seems, he told that to a Washington Post reporter in 1998.

His statement means to me that he wants to slice and dice the news for each individual reader based upon the reader’s tastes and preferences. How can he do that? Let’s remember that Amazon, created by none other than Mr. Bezos, has one of the most formidable computer infrastructures in the world. It is so formidable that countries lease computer time on its system so that they can benefit by the incredible depth and breadth of Amazon’s infrastructure.

Look for great things to come from The Washington Post. I have no doubt that Jeff will wed outstanding and first-rate reportage with formidable computer, technological and marketing prowess. Give him just a few short years and I have no doubt that his prediction that “there won’t be printed newspapers in 20 years” will easily come to pass. In fact, I personally think that he erred in his prediction. With him now in the newspaper business, it probably will take far fewer than 20 years for the printing presses to stop.

Theodore F. di Stefano is a founder and managing partner at Capital Source Partners, which provides a wide range of investment banking services to the small and medium-sized business. He is also a frequent speaker to business groups on financial and corporate governance matters. He can be contacted at [email protected]. Follow Theodore F. di Stefano on Twitter.

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