Jeff Bezos Buys the Washington Post

Budgies love it.

Jeff Bezos has just bought the Washington Post for $250 million.

One wonders why.

Newspapers in North America have been losing value hand over fist over the past twenty years; and there is really no sign of that turning around.

One obvious possibility is status and influence. For someone nouveau riche like Bezos, private ownership of the fabled Washington Post might get him into a lot of cocktail parties and a lot of private tete-a-tetes with politicians. If the Post lacks general circulation, it is still read carefully by the political and bureaucratic elite in Washington, and will probably continue to be. It is their house organ. This sort of thing has become a well-trodden path in the UK: buy a prestigious but financially troubled London daily, get a peerage.

It is also possible that Bezos wants a hobby. He is obviously in love with print, or he would not have come up with Amazon. At the current selling price, he doesn't really need to make money with it if it interests him.

There is little likelihood he's buying it to promote his own political ideas, as Sun Myung Moon did with the Washington Times. Bezos seems to be a liberal; the Post is already liberal; Washington already has a conservative daily.

But it is also possible that Bezos knows some things about the future of technology that the rest of the big money guys do not. Bezos is nothing if not a forward-thinker. I think he may see a new paradigm for newspapers. I understand that, when first approached about buying the Post, Bezos was not interested. Then he came back a few months later and said he was. Sounds to me as though he was doing some thinking in the meantime, and has come up with some ideas.

It wouldn't take that much. Currently, newspapers cannot compete on the World Wide Web, because people can get their news free, and outside linking means brand no longer matters. But there are ways of going electronic, and going to the Internet, without being on the World Wide Web. Bezos knows this well, because a lot of his business is based on one of them: the ebook platform. 

Citizen Bezos

Notably, newspapers and magazines are becoming tablet apps. These can be free, or by subscription, but still walled off from the rest of the web. And they can still be instantly updated, in order to compete with other online sources for immediacy. The cachet of the brand can theoretically attract readers; heck, a lot of people make a point of checking in at Drudge every day, even though the attraction is only his particular selection of links. And the readers can attract advertisers.

Apple and Rupert Murdoch failed at this with The Daily; but Bezos may see a better business model. The Daily had no brand cachet or reputation to build on—or rather, Murdoch's reputation for yellow journalism may have been a net minus. It seems on the face of it a dumb idea to try to build the reputation of the outlet online in order to convince people to pay for it, but expect them to pay for it before you've done this. This is putting the cart before the horse.

The Washington Post is at the opposite end of the spectrum in this regard.

The Daily was paid subscription; Bezos is on record saying he does not believe people can be made to pay for news online. Even if they can, the way this is done is the opposite of Murdoch's approach. First you offer a package free, establish value, and then sell added services on the strength of this. Bezos knows how to do this well.

But it is not just as question of what Bezos might do. If a lot of newspapers decide to pull off the web and go to apps, if this turns out to be a viable model, the links will dry up for the online aggregators, reducing, possibly even ending, that source of competition.

If so, Bezos will be left sitting on a very good brand in the middle of a brave new world.