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Tuesday, August 6, 2013

Amazon owner Jeff Bezos buys Washington Post for $US250m

Amazon CEO Jeff Bezos will buy the struggling Washington Post newspaper from longtime owner the Graham family for USD 250 million. Picture: AFP PHOTO/Emmanuel Dunand. Source: AFP

AMAZON founder and CEO Jeff Bezos has snapped up the Washington Post for $250 million, less than a quarter of the price of the recent Tumblr sale, to add to his portfolio of media and space investments.

Bezos, 49, is the founder and CEO of Amazon and listed at number 19 on Forbes billionaires list, ranked the 27th most powerful person in the world with a fortune of around $28.28 billion, according to latest Forbes estimates.

He is buying the paper, which is renowned for breaking the legendary Watergate scandal and leading disclosures about NSA surveillance programme, for less than 1 per cent of his personal fortune as an individual, with Amazon not involved.

The US$250 million sale is less than one quarter of the price Yahoo! Paid for Tumblr in May, and also cheaper than the $315 million AOL paid for the Huffington Post in 2011.

Mr Bezos said in a letter to staff at the company that he is excited about the opportunity for reinvention at the paper.

"I won’t be leading The Washington Post day-to-day. I am happily living in “the other Washington” where I have a day job that I love. Besides that, The Post already has an excellent leadership team that knows much more about the news business than I do, and I’m extremely grateful to them for agreeing to stay on,” he said.

Staff reacted to the sale on social media with Ezra Klein tweeting "I've bought a lot of stuff from Jeff Bezos's companies so this was really only fair."

Michael Birnbaum tweeted he was "floored" by the sale, and Cindy Boren wrote "Have I mentioned lately how much I love Amazon?"

Others mentioned how sad it was to hear Donald Graham speak about selling the company, after his grandfather Eugene Meyer had bought it during the depression years. Mr Graham said after struggling with challenges in the newspaper industry they had secretly shopped it around to various investors.

“The Post could have survived under the company’s ownership and been profitable for the foreseeable future. But we wanted to do more than survive. I’m not saying this guarantees success, but it gives us a much greater chance of success” he said.

"Jeff Bezos' proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post."

Mr Bezos, who is married with four children, has also invested $5 million in Business Insider, along with expensive pet projects like private space flight through his company Blue Origin and other explorative projects through Bezos expeditions.

His statement to Post employees also said he plans to chart a new path for the company.

"The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs," he said.

"There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment."

The sale took the media world by surprise and comes just days after the New York Times sold the Boston Globe newspaper for just $70 million to the owner of the Boston Red Sox baseball team, 20 years after paying $1.1 billion for the paper.

The deal involves only the newspaper assets of the Washington Post Co., including its free commuter daily The Express, the Spanish language newspaper El Tiempo Latino, and Robinson Terminal, a warehouse asset.

The Washington Post Co. also owns the large educational testing service Kaplan, Foreign Policy magazine, and other units.

Bezos said he will retain Weymouth, Donald Graham's niece and granddaughter of legendary post publisher Katherine Graham, as the newspaper's CEO and publisher.