Spectacular news broke yesterday that Jeff Bezos bought the Washington Post.
Why WaPo was sold is obvious: running a newspaper sucks.
It really, really, really sucks. Let’s count the ways:
1. Craigslist took all your classifieds
2. Niche sites took your audience and your top journalists
3. No one wants dead trees on their doorstep
4. News breaks, is processed and largely resolved in the same day on Twitter
5. Some of the country’s last unions are grinding down already ground-down newspapers
It’s just a huge headache with little payoff.
Which leads us to wonder, ‘Why did Jeff do it?’
Also for that matter, why has Warren Buffett been buying dozens of small papers up over the past couple of years, and why did Red Sox owner John Henry just buy the Boston Globe?
Here are the six leading theories and what I think of each:
1. EGO: Newspapers are the new sports teams for the billionaire set
There is probably some truth to this. At some point, rich folks realize they’re gonna die with a bunch of money in the bank they never deployed in service of either their legacy, fun, society’s benefit or straight-up ego.
And it’s not just old dudes like Buffett and Sam Zell.
Facebooker Chris Hughes bought the New Republic, and some trust fund kids bought the New York Observer.
David Bradley, who bought the Atlantic, has done a spectacular job with the internet side of the business (the Atlantic Wire in particular is among the top 10 new media properties -- and it seems to be a side project for them).
Jeff Bezos does have an interest in publishing. He was actually going to be the investor in my blogging company Weblogs Inc. back in the day, but we sold before I could close a deal with him. It was an awesome meeting with him, where a 20-minute coffee turned into over an hour of getting peppered with questions: How do you hire the bloggers? How did you come up with the name Engadget?
Also, Bezos just invested in Henry Blodget’s Business Insider.
Bezos has always loved intelligent debate (fixture at TED), writers (he started by selling books after all, and you see him hamming it up with writers at superagent John Brockman’s dinners) and media (Amazon Studios).
Verdict: This NOT a vanity or boredom play for Bezos. He loves media.
2. INFLUENCE: Bezos is buying influence in Washington
Some folks speculate that Bezos wants to have more influence in Washington and he bought a platform to do that. Bezos has had to deal with issues around taxes -- or lack of taxes -- with Amazon’s service over the years. And, yes, once in awhile he gets a black eye around conditions at their warehouses (air conditioning, long holiday hours, etc).
However, the issues he had are not going to be addressed with a $250m check to run a paper filled with journalists, savvy cats who know when they’re being spun.
There is already an easier, more direct and efficient way to buy influence: campaign donations.
A second option called ‘lobbyists’ also exists, and from what I understand it dovetails nicely with the whole ‘donations’ thing.
Using a newspaper to pursue an agenda is wildly inefficient.
Perhaps in the 19th or 20th century, running a newspaper was a great strategy for amassing power and influence. But in the 21st century, influence is about data and money, not ink and money. But that’s a whole other email I could write.
All that being said, Jeff now has a couple of visits a year to Washington on his calendar, and the hundreds of WaPo journalists are his de facto early warning/social secretaries. They’ll be able to help him navigate whom he should be breaking bread with.
Not that Jeff is not able to get a meeting with anyone at any time, but it’s kind of cool to have a deep network doing massive intelligence work for you.
Bottom line: Bezos didn’t buy WaPo for political influence, or to solve the small cohort of issues his business will face -- but it might be a nice side effect.
3. INTEGRATION: Newspaper delivery is a trojan horse for daily home delivery
Personally, I love this theory. The idea is that Bezos can’t figure out how to get something to your home in a timely fashion, but by buying a newspaper with a couple of hundred thousand circulation he’s going to magically get the solution.
Bezos knows exactly how to get stuff to your house, how much it costs to do it based on region, demand and margin of products. He knows this better than anyone. He’s done same-day delivery, delivery to a PO-style box and for free with Amazon Prime.
He knows all about this stuff, and it was made abundantly clear that this is a Jeff Bezos and NOT an Amazon purchase. Just like the investment in Business Insider was a Bezos and not Amazon move.
There is a brilliant consumer vision here of milk, eggs, donuts, diapers and a newspaper showing up in some combination every day. A vision that is no longer viable since Amazon Prime killed it long ago with their “Subscribe and Save” features.
Bottom line: Bezos did not buy WaPo to bundle it with Amazon home delivery.
4. ASPIRATIONS: Bezos will run for president
It was laughable in 1995 to think that Bloomberg and Schwarzenegger would run, let alone hold, political offices, so it’s certainly not out of the question that Bezos might some day aspire to disrupt the political system.
It’s just kind of silly to think Bezos would want to focus in on just politics for a decade given his track record of starting a business or two a year (albeit inside Amazon typically).
There are so many more intellectually stimulating and impactful problems to solve than Washington DC: space exploration, life-extension, cancer, energy, robotics, global warming and artificial intelligence come to mind.
Jeff would much prefer to be in a meeting with scientists and entrepreneurs solving those problems than with a bunch of Republicans and Democrats fighting over whose district will get what kickbacks in exchange for f@#$ing the American public even more.
Bottom Line: Highly, highly, highly, highly doubtful Jeff would want to hold office. He’d be an idiot to give up the epic life to hang with the most boring and ethically challenged humans on the planet: politicians.
5. & 6. LEGACY+CHALLENGE: Bezos bought WaPo because journalism is important & he wants to figure it out
This one makes sense the most sense to me, as Jeff is relentlessly curious and a tinkerer.
He asks a ton of questions, reads a bunch (according to all reports) and obviously loves to figure s*** out.
Cloud computing with EC2, tablets with Kindle Fire, delivery with Amazon, and the movie/TV business with Amazon Prime Video & Amazon Studios (which you may never have heard of). Oh yeah, space with his Blue Origins company, and that whole 10,000-year clock thing.
There is probably a little bit of randomness here as well. Donald Graham has been walking the halls of tech conferences for two decades, shaking hands and asking young entrepreneurs (including this one at one point), ‘What are you working on?’
Bezos has also been on this circuit forever doing the same thing.
Don was tired and beat up, Bezos is unstoppable and has a checkbook that can never be spent. Perhaps a perfect storm for a wild, once-in-a-decade event like this.
Bottom line: Jeff bought WaPo out of intellectual curiosity, legacy and the challenge in a moment of randomness. I don’t think he was out there looking to buy the top five newspapers, and I don’t think you’ll see him buy another dozen newspapers in all likelihood.
Here are some fun/silly predictions, two of which will come true (taking even bets now on 10-year window):
a) Jeff does a great job moving the business to digital and making a modest profit or loss over the next couple of years.
b) Jeff buys Business Insider and makes Blodget the CEO of WaPo+Business Insider. Massive cuts, massive investment and eventually a full-on cable news channel is launched.
c) the New York Times gets bought by Google in the next 10 years, put in a ‘trust’ of sorts to firewall it from the mothership’s influence.
d) Bezos buy Netflix and increases spend, winning more Emmys than any other network in 2020.
e) Bezos folds WaPo, Business Insider and some other brands into Amazon, having seen the vision of a commerce + technology + content company.
For me, I have to say Bezos and Elon Musk are battling for the most interesting and ambitious entrepreneurs on the planet right now.
What do you think this is all about?
PS - My angel fund, called LAUNCH Fund, will be investing up to $100k in the winners of the LAUNCH Hackathon and up to $100k in one of the presenters at the LAUNCH Mobile & Wearables event.
LAUNCH Mobile & Wearables
150 senior executives, two days, lots of night-time poker
Sept 30 & Oct 1, San Francisco
1,000 developers--and developers only--for two days
Nov 8-10, San Francisco
PPS - Could use some help with these two events. If your company wants to sponsor some Red Bull, pizza, ice cream, sushi, scotch or whatever you’re into, let me know.
Spectacular news broke yesterday that Jeff Bezos bought the Washington Post.