Amazon founder Jeff Bezos is hailed as a pioneer of online retailing and eBooks. But can he save one of the world’s great newspapers?
Bezos shocked markets overnight by purchasing venerable paper The Washington Post for $US250 million ($A280 million) — in cash. Bezos is typically known for high-tech ventures, but there will be common features in his latest purchase.
“I believe he will probably look at synergies between the publishing platform, the content and his Kindle business,” Telsyte research director Foad Fadaghi told Crikey today. “It might very well lead to a more rapid transformation of the online news model — it might bring a different perspective.”
The Washington Post Company said in a statement last night it decided to sell the prestigious newspaper after “years of familiar newspaper-industry challenges”. The company is owned by the Graham family, with Don Graham serving as chairman and chief executive. In the statement, he said Bezos’s proven technology and “business genius”, along with his long-term approach, make a “uniquely good new owner for the Post“.
Bezos’ own statement to staff suggests he will take a hands-off approach, although he says there will be “changes … over the coming years”: “That’s essential and would have happened with or without new ownership.”
The concept of Bezos purchasing a newspaper business might appear strange, but is in line with his investment strategy. He’s been hailed as the sole figure responsible for popularising the eBook, while Wall Street has been a huge fan of Amazon’s diversification. Over the past few years Amazon has transformed from a retailer to add cloud services and video on demand — Amazon servers are responsible for hosting many of the world’s most popular websites.
Although Amazon toys with low margins and recorded a loss of $US7 million in the three months to June, the company’s shares have risen 16% during that time. The optimism is a reflection of Bezos’ strategy to pursue long-term profitability and continue surprising the market with steady growth — much of the loss is due to infrastructure investment. This is contrasted with Apple, whose shares have fallen over 20% during the past year despite consistent profits — the market is more interested in Amazon’s future than Apple’s past.
Investing in newspapers is nothing new among America’s richest. Last year Warren Buffett announced he would buy up local newspapers around the country, and over the past few years has accumulated shares in the Washington Post Company too. Last year, Bezos poured $US5 million into Business Insider — media analysts suggest Bezos could transform the news model as he did with books.
“The positive thing is that this is good for the journalists,” said Fadaghi. “It’s good for the industry as a whole to have investment happening in this space.”
In his statement to staff, Bezos mentioned the company would “need to invent, which means we’ll need to experiment”. But Bezos has been doing some experimenting on his own. Using his vast fortune, Bezos has invested in all sorts of projects, ranging from a huge clock in the middle of the American desert, to a company dedicated to finding wreckage from the Apollo space missions in the middle of the ocean. Here are just a few of his other unusual and wacky investments …
Big clock
This isn’t as much of an investment as it is a pet project, but a couple of years ago Bezos spent $US42 million of his own cash on a 10,000-year clock in the middle of the Texas desert.
3D printing
This new craze has taken tech-heads by storm, and Bezos is right at the forefront of the revolution — he has a modest investment in Makerbot, a manufacturer of 3D printing machines.
Rocket wreckage
This is a strange one. Bezos founded a wreckage recovery business, which is all about finding discarded parts of rockets and spaceships that have fallen into the ocean as part of the Apollo program, way back in the 1970s. Last month he even wrote a blog post from a ship on a mission to find lost parts.
Quantum computing
At least this is related to technology. Last year, Bezos joined the CIA in pumping cash into quantum computing firm In-Q-Tel.
Glass cups
This one is just weird. Bezos is an investor in a company called Glassybaby. The business creates glasses designed to hold a certain type of candle.
*This article was originally published at SmartCompany
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.