Amazon's Jeff Bezos Buys the Washington Post, Boggles Mindsby
Jaws across Washington, D.C., Seattle, and Silicon Valley just dropped in unison: Jeff Bezos, chief executive officer of Amazon.com and one of the pioneering figures of the commercial Internet, just acquired the storied Washington Post for $250 million.
The deal is surprising for a number of reasons. Bezos believes that the Internet is changing the entire business landscape, but so far he has seemed devoted to blazing new paths, not rescuing ailing old media franchises. In a letter posted to WashingtonPost.com, Bezos suggested that he could bring some Amazon-style innovation, which favors rapid experimentation, to the ailing 136-year old newspaper company. “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. 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.”
The phrase “working backwards” is a touchstone of Amazon culture. New product launches are proposed via documents styled like a press release, so that the new venture can be analyzed in the context of how the customer might view it. Regular meetings are initiated by reviewing six-page documents, called narratives. It’s Bezos’s preferred way of processing information and vetting the data behind each decision. It will be interesting to see whether he transfers some of those methods to the Post.
“His most important job is still his day job,” says Tom Alberg, a venture capitalist and Amazon board member who had been pre-briefed on the newspaper deal. “I imagine he’ll be pretty hands off.” Alberg said the acquisition was “good news for journalists” because Bezos will bring his patience, long-term orientation, and financial resources to a company that has previously had to cater to public shareholders.
In his position as Amazon CEO, Bezos has seemed pessimistic about the prospects of the old-media intermediaries that stand between consumers and the individual creators of content. He wrote in Amazon’s 2011 letter to shareholders that even “well-meaning gatekeepers slow innovation,” and he’s moved to take those gatekeepers out of the equation: By allowing authors to publish their own books directly to the Kindle, for example, as well as by funding proprietary television shows through Amazon’s Studios division.
Now, with the Post, Bezos will own one of the biggest such gatekeepers. Though he’s buying the Post independently, it might ultimately serve as another strategic asset in Amazon’s ecosystem of Kindle tablets and e-readers, which compete against similar products made by Google and Apple.
The deal for the Post marks Bezos’s biggest such move, but for the last 13 years, he has invested prolifically outside of Amazon. Most of these investments occur within the framework of his private investment fund, Bezos Expeditions, which holds stakes in companies such as Twitter, the taxi service Uber, the 3D printing company Makerbot, the blog Business Insider, and the robot firm Rethink Robotics. The fund has become a way for Bezos to stay plugged into Valley trends and invest in what he believes are the staggering changes being wrought by the Internet in all corners of business. This summer, Bezos spent a month in Silicon Valley, meeting entrepreneurs and startups in addition to spending time at Amazon’s hardware division, Lab 126. Bezos was also one of the original investors in Google, plugging $250,000 into the nascent search startup back in 1998. He has never disclosed whether he held on to that stake.
Many of the entrepreneurs funded by Bezos Expeditions say they have had at least one conversation with Bezos himself. “He invests in things where information technology can disrupt existing models,” says Rodney Brooks, the MIT robotics professor behind Rethink Robotics, which aims to put inexpensive robots on manufacturing assembly lines. “He’s certainly not hands-on, but he has been a good person to talk to when various conundrums come up. When we go ask him questions, it’s worth listening to his answers.”