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It’s not likely that there could be any bigger news out of the U.S. today than the announcement that Amazon (NASDAQ:AMZN) CEO, Jeff Bezos has agreed to purchase the Washington Post (NYSE:WPO). We’re not talking about buying a single copy or signing up for a subscription. We’re talking about him buying the whole enchilada. Actually, he is leaving some of the enchilada on the plate, but, for all practical purposes, he is buying the whole thing.
The Washington Post share price closed up 1.6% yesterday at $568.70 on the NYSE. The share price climbed an additional 5.1% at $597.50 in extended, after-hours trading following the announcement of the pending sale. Bezos will pay $250 million for the Post, just under the $255.6 million valuation of the paper in May. On 6 August 2012, WPO share price was $344.58.
It is unclear what the founder of Amazon plans to do with what might be considered one of the monuments of the U.S. capitol. The paper’s print is still bold, but its glory has been fading over the last decade along with just about every other printed newspaper. Long-time chairman and CEO of the Post, Katherine Graham, passed away in 2001. Her son, Don, took over the helm following her death only to face the decline of a once-thriving industry and watch company revenues decline steadily since 2006.
I have noticed that some commentators seem to be framing the possibilities of Bezos plans within the context of the Amazon business model. I find that to be significantly misleading. Amazon is not buying the Post. Jeff Bezos is buying it. That makes a huge difference. Unencumbered by having to blend the Post into the Amazon framework, Bezos will be able to take the paper in a direction that he already envisions and one that may surprise us all.
All business leaders paint a picture of themselves as being customer-oriented. Bezos is one of the few who actually is customer-oriented – and he and his companies have prospered because they mean what they say. He has been quoted as saying, “There are two kinds of companies – those that work to try to charge more and those that work to charge less. We [Amazon] will be the second.” I may not agree with some things that Bezos advocates, but I whole-heartedly agree with his basic business principles.
The Washington Post is not only a icon in the publishing industry, it has proven that it could put the fear of God, or at least the fear of the Graham family, into every politician in the federal government. This was the paper that exposed Watergate. This is the paper that backs congressmen and, yes, presidents against the wall. It’s new owner has the right stuff to restore the paper to its former glory and wield its power to keep the government in check.
Bezos will be retaining all the key staff, at least for the near future. He is not of the typical mindset that they must be the cause of the problem. Instead, Bezos tends to think of these people as being high-quality assets that are waiting for a new vision. The man who also owns his own space exploration company and who is funding a project to recover the Apollo 11 engine from the ocean floor is the man who can give them that vision and set them free to reach it.
The sale is expected to close within 60 days. At or shortly following the sale, the Washington Post Company will change its name as it continues to manage other entities under its corporate umbrella.
