Last year, Amazon founder Jeff Bezos told German newspaper Berliner Zeitung that the only future for printed newspapers was as an extravagant service in luxury hotels. So the news that one of the world's richest men was to buy the Washington Post, one of America's leading newspapers, came as quite a surprise. While the $250m price tag was effectively loose change alongside Bezos' $28bn fortune, the question of why a lynchpin of the "new economy" would buy an unprofitable business in a deeply troubled industry intrigued many.
What the commentators said
That may be too pessimistic, suggested Jordan Weissmann on TheAtlantic.com; returning the paper to profitability may be easier than some expect. Much of the paper's losses were due to pensions obligations, which Bezos will not be taking on. The paper still has to worry about declining print advertising and a tricky shift to a sustainable business model, "but its new owner might not have to worry about a flurry of red ink".
In any case, focusing too much on short-term profitability may underestimate Bezos' intentions. Announcing the sale, the Graham family which has controlled the Post for 80 years said it had never intended to sell, but wanted the paper to do more than just survive, noted Katherine Rushton in The Daily Telegraph. "You can bet Mr Bezos wants it to do more than just survive as well."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
While he will be buying the paper personally rather than through Amazon, it's impossible to imagine that the two businesses will not work together (indeed, Bezos referred to the potential for digital channels, such as Amazon's Kindle, to reinvent newspapers in his Berliner Zeitung interview). Bezos is noted for an exceptionally long-term view Amazon continues to run at a loss "for the sake of future scale" suggesting that he will offer the Post the investment and time it needs to evolve.
-
Trouble brews in B&M as bargain shops take a hitOpinion Once a stock market darling, B&M's share price has slumped. What has gone wrong for bargain shops?
-
US and China reach a ceasefire in their trade war after talks in LondonThe US and China's trading relationship – the most important one in the global economy – is back on track. Will the truce last?
