#ManicMonday was off to a boring start, but it officially became happening this afternoon when the Internet started buzzing with reports of Jeff Bezos – Amazon’s CEO and head honcho – acquiring The Washington Post, one of the country’s most widely read newspaper factions. To cut through the bombardment of announcements that stunned the entire World Wide Web, here are the bulletpoints on what you really need to know:
1. Bezos reportedly won the bid for The Washington Post’s heart for a cool $250 million.
The Washington Post Company’s Chairman of the Board Donald Graham, along with his niece Katharine Weymouth, Publisher and CEO of The Post (who will retain her designation after the completion of the sale), both addressed the paper’s employees about the sale just this afternoon. The Post has been in the Graham family since 1933, when it was first purchased by Graham’s grandfather, Eugene Meyer, at a bankruptcy sale. Unfortunately, and probably due to the constant rise of technology and the ease of garnering massive amounts of information for free online, much like its traditional media counterparts, The Post has suffered a major blow in revenue – despite being one of the most popular news outlets The Post Co. owned, the newspaper took a 44 percent drop in operating profits over the last six years and an additional seven percent nosedive in print circulation for the first half of 2013.
Weymouth mentioned that she and Graham have had discussions of selling The Post as early as last year, and whether or not it was still a smart decision business-wise to retain ownership of the paper. “If journalism is the mission, given the pressures to cut costs and make profits, maybe [a publicly traded company] is not the best place for The Post,” she said. “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,” Graham added.
When it came to choosing a buyer, Weymouth guaranteed that whoever ended up with The Post would have to have the same principles and dedication her company had for news publishing. Graham reportedly hired the investment firm Allen & Co. to collect and select prospective buyers of The Post. “[Bezos was] everything we were looking for — a business leader with a track record of entrepreneurship who believes in our values and cares about journalism, and someone who was willing to pay a fair price to our shareholders,” Weymouth said.
2. Bezos is buying The Washington Post with his own hard-earned money.
Before any of you wonder how in the world Amazon would benefit from this still-mind-boggling enterprise (and if you think about it, it really shouldn’t be a surprise that Bezos is buying The Post, since Amazon has been known to make waves in new media business, particularly in book publishing as well as television and film production) it’s important to stress that Bezos is buying The Post as Bezos himself and that this transaction is in no way related to Amazon’s state of affairs. Another reason why Bezos was such an attractive buyer? He and Graham have actually been friends for a long time and have been each other’s confidante in matters of business; in fact, Bezos reportedly consulted Graham on the best way to feature newspaper content on the Kindle, Amazon’s popular e-reader.
3. Bezos is not buying out The Washington Post Company completely.
According to the announcement released by the company, “Slate magazine, TheRoot.com, and Foreign Policy are not part of the transaction and will remain with The Washington Post Company, as will the WaPo Labs and SocialCode businesses, the Company’s interest inClassified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC.” The deal, however, covers not only The Post but also other publishing businesses like the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino, and Greater Washington Publishing.
4. The Wasington Post Company, which used to umbrella over the pawned off publication, will be changing its name soon.
This fact, of course, makes complete sense, seeing that the flagship business that the company name refers to will no longer be part of the Graham family domain after the sale goes through. The company is expected to change its name soon, and though no new name has yet been announced, it may very well be related to any other business they do still own, which includes Kaplan, Post–Newsweek Stations, and Cable ONE.
5. Bezos may not have prior newspaper publishing experience, but he is more than capable to handle his empire-to-be.
According to The Post’s own report of the acquisition, Graham quoted billionaire investor Warren Buffet (also a longtime adviser of the company) in a message addressed to employees, describing Bezos as “the ablest CEO in America.” And that’s not the only accolade Bezos has the pleasure of owning. Last year Fortune Magazine hailed him as Businessperson of the Year, which can be seen in the fact that Amazon is heavily invested in propagating new business, as evidenced by the company’s commitment to finding and publishing new book authors as well as commissioning television and film scripts for future production. Seeing that Bezos is shelling out a sizable amount of cash for this purchase (which is really just a tiny smidgen, considering his total net worth of $23.2 billion), it’s in his best interest to start learning about the publishing business as soon as possible, and if anything, Amazon can be used as an illustration of what Bezos can accomplish when he sets his mind to it.
In his message addressing employees of The Post, Bezos clarified that he will not be overhauling the management of 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,” Bezos wrote. He has also stated that any future plans for the publication have not been set in stone yet, but that experimentation in this new frontier should be expected.