Iceberg buys Titanic: The best insights into Amazon’s Jeff Bezos and his acquisition of the Washington Post

Not surprisingly, there has been a lot written about Amazon founder Jeff Bezos’s blockbuster purchase of the venerable Washington Post for $250 million (including my take on the deal and Om’s analysis). The media world hasn’t seen a bombshell of equivalent proportions since AOL acquired Time Warner — although hopefully this acquisition turns out a bit better than that one. Among the millions of words that have been typed about the news, we have tried to find the best and/or most interesting insights into the deal, and whether fans of journalism should be overjoyed or paralyzed with depression.
New York Times media writer David Carr says the Washington Post sale was inevitable in some ways, given the decline of the paper over the past decade:

“To many, the Washington that the newspaper once guided from family dinners and select Georgetown salons disappeared long before the sale… the days when people snapped open the daily paper to find out the things they should care about were long past, replaced by a cacophony of information sources, many of them far more driven by ideology than The Washington Post. In that way, perhaps, the purchase of one of the prized assets of American journalism by a talented entrepreneur from another coast is less of a shock than it might have been.”

Don Graham’s “heart is broken”

Don Graham, Washington Post

Washington Post chairman Don Graham

New Yorker writer David Remnick looks at the impact of the sale on the Graham family and says that even though CEO Don Graham did what he thought was best for the paper, it has taken a toll: “Though what’s left of the Post company, with its television affiliates and cable systems, its real-estate holdings and education company, will still be worth a fortune, I can’t help thinking this: Donald Graham’s heart is broken.”
Among the reactions of Post staffers and others to the deal (including NYT publisher Arthur Sulzberger, who was said to be “stunned” by the news) Bob Woodward says he is sad, but that if anyone can rescue the Washington Post, it’s Jeff Bezos: “If there’s somebody who can succeed, it’s Bezos. He’s the innovator, he’s got the money and the patience, so we’ll see. I think in some ways, this may be the Post’s last chance to survive, at least in some form of what it was.”
Ezra Klein, who runs the Wonkblog for the Washington Post, says that the financial realities of the newspaper made the Graham family’s decision an obvious one:

“Don Graham says the decision to sell came from a simple calculation: The Washington Post is a public company, and it doesn’t have infinitely deep pockets. They looked to the future and saw that they’d have to keep cutting. The implication is that Bezos doesn’t have to keep cutting, and won’t keep cutting, though nobody really knows.”

The iceberg rescues the Titanic

Andrew Leonard at Salon wins my “best headline” award for his take on the Bezos-Post deal, with a post entitled “The iceberg just rescued the Titanic.”

“The symbolic importance of the Bezos acquisition is impossible to escape. No single company embodies the disruptive, brick-and-mortar-smashing force of the Internet more fully than Amazon. Now we’ve come full circle. The iceberg just rescued the Titanic. After grinding the newspaper industry beneath its steel-tipped boots, the Internet suddenly turned all sweet and sugar daddy.”

Chris Hughes, the Facebook billionaire who acquired The New Republic, might have the best insight into why a billionaire would buy a media entity — and he says it’s about the power of brands: “While no one has found the formula that will bring old media into a profitable future, I’m guessing that Bezos understands an old truism: brands matter… in fact, brands matter more now than when Don Graham’s grandfather bought the Post nearly a hundred years ago.”

At Fortune magazine, Dan Mitchell says the one good thing about Bezos buying the Post is that he might actually invest in journalism, unlike the vast majority of current newspaper owners: “Of course, it’s impossible to know what Bezos might be able to do with the company, but it seems a safe bet that he’s going to invest rather than simply wring it for profits in the short term by cutting costs (and quality), as other newspaper companies like Tribune and Advance have done, often under the pretense of forging ahead into the new era of newspapering.”

The center of media power has shifted

Jeff Bezos holding Kindle Fire
Mike Moritz, the chairman of venture fund Sequoia Capital and a former journalist, writes at LinkedIn that much can be learned about Bezos and his approach to business by reading the Amazon CEO’s letters to shareholders — and that his commitment to customers is the key to his success:

“The term ‘shareholder value’ has been much maligned in recent years [but] in the right hands, especially a Founder who owns a large part of his company (Bezos owns nearly 20% of Amazon) it is a reflection of doing many things right – and this starts with pleasing customers. Companies do not increase shareholder value over the very long-term unless they have happy customers.”

Reuters media writer Jack Shafer says the biggest benefit of having Bezos as an owner is that he understands the business of production and delivery in a digital age, and that knowledge could benefit the Post:
“In acquiring the Washington Post, Bezos enters a business that is not radically different from the ones he already owns. Reporters and editors like to think their literary arts are central to newspapering. But it’s better to think of a newspaper as a coordination problem that manufacturing and distribution solves daily… nobody knows more about deadline deliveries and distribution than Bezos’s Amazon.”
Emily Bell of Columbia University’s journalism school, a former digital head at The Guardian, says the Bezos purchase is a sign of how the center of media influence is shifting from the east to Silicon Valley — at least in terms of mindset:

“The sale of the Washington Post to Amazon founder and multibillionaire Jeff Bezos for $250m – just under 1% of his wealth – reads like the coda of a Tom Wolfe novel. A great American institution is bought by an internet entrepreneur, part of a Silicon Valley elite, whose rocket-ship ride to stratospheric wealth has coincided with the implosion of the galaxy of influential brands born before the era of the microprocessor.”

A long-term focus on the customer

Newspaper veteran and consultant Ken Doctor says the newspaper world could do a lot worse than having Bezos for a savior, since he is willing to make long bets and he understands customer service: “Number one, he’s built — and continues to build — the company with a long-term perspective. He has long frustrated investors impatient with losses and meager profits, as revenues are plowed back into growing the business. That’s a long-term perspective the newspaper business needs more of.”
Brad Stone of BusinessWeek also notes that Bezos’s focus on the customer could bring some new insights to the Post:

“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.”

Dan Sinker, director of the Knight-Mozilla Open News project, wonders which Jeff Bezos bought the Post — the one who built Amazon Web Services into a cloud giant, or the one who invested in a 10,000-year clock buried in a mountainside? He hopes it’s the former: “These bits and pieces of code that start in the newsroom and end transforming the Web itself, are what technologists in journalism do best when they have the right support and leadership behind them. That leadership is still too rare in the journalism industry. That may have changed in a big way on Monday.”

Dean Starkman at the Columbia Journalism Review wonders whether media can be truly independent when owned by billionaires with no real interest in the media: “In the new model, on the other hand, the press is not powerful in its own right. The titans’ power flows from elsewhere. The press is, in an economic sense, incidental to their wealth. Journalism under this new model is enveloped by, and dependent upon, interests far larger and quite different from its own.”

Bezos says he bought the Post by mistake

Journalism professor and author Jeff Jarvis says that he hopes Bezos will use his knowledge of customer relationships to rebuild the Post:

“I’m ready for folks to cry for joy that Bezos knows how to sell content. He’ll know how to build pay walls, damnit! But I don’t think that’s his key value here… No, Bezos’ key competence is in building relationships. This is wishful thinking on my part, as I have been arguing that we in journalism need to stop thinking of ourselves as manufacturers of a mass commodity called content and start understanding that we are in a service business whose real outcome is informed individuals and communities.”

Business Insider editor Henry Blodget, who has Jeff Bezos as an investor in his company, says the Washington Post should be very glad to have the Amazon founder involved: “Unlike the typical financial investor, moreover, Jeff Bezos really is focused on the long term. Whenever there’s an opportunity to reinvest would-be profits today in an exciting project that might pay off tomorrow, Jeff Bezos will take it. And when he’s an investor in your company, you’ll feel like you should take it, too. So, anyone rooting for the Washington Post to transform into a successful digital business should be thrilled that Jeff Bezos is buying it.”
New Yorker humor writer Andy Borowitz, meanwhile, says Bezos bought the Washington Post by mistake: ““I guess I was just kind of browsing through their website and not paying close attention to what I was doing,” he said. “No way did I intend to buy anything.” Mr. Bezos said he had been oblivious to his online shopping error until earlier today, when he saw an unusual charge for two hundred and fifty million dollars on his American Express statement.
Images courtesy of Flickr user Zarko Drincic and Shutterstock / Ruggiero Scardino