After the news of the Publicis Groupe and Omnicom merger last week, this week has begun with another surprising development, this time on the media owner side of the business. The Washington Post Co announced on August 5, 2013 that it would be selling its flagship newspaper, Washington Post, to Amazon.com Founder and Chief Executive, Jeffrey Bezos.
Mr Bezos, whose entrepreneurship has been admired over the years for his leadership in growing Amazon to its current stature, will pay USD 250 million in cash for The Post and affiliated publications to The Washington Post Company, which owns the newspaper and other businesses.
The development will end the Graham family’s ownership of one of United States’ most respected news organisations after 80 years.
Mr Bezos, who is buying the news organisation in personal capacity, will become its sole owner on completion of the sale, within an estimated 60-day period. The Post Co is expected to get a new name and continue as a publicly traded company. Ecommerce giant Amazon will have no role in this purchase.
Many media analysts see the development as one of the fallout of the digital wave on traditional media businesses in the west, though some observers were quick to add that Washington Post was one of the few publications that were expected to withstand the digital onslaught.
The sale however does raise expectations from Mr Bezos. In an open letter to the company employees, Mr Bezos said he would not be leading the paper on a day-to-day basis and he would not seek to change ‘the values’ of the paper. He added without explaining further, “There will, of course, be change at The Post over the coming years. 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.”
Even though the media space has seen similar developments recently such as the sale of The Boston Globe of Newsweek being sold again to digital news firm IBT Media, the news of Washington Post has left many reflecting once again what the rules of the media business should be in the digital age. Given Mr Bezos’ successful digital experience, many eyes would be trained on him to see if a new business model emerges under his ownership of Washington Post.