Tuesday, August 6, 2013

Bezos Buys the Post

Good reflections this morning on the sale, er, purchase of the Washington Post.

Bezos’s politics are something of a puzzle. He has contributed to local candidates in the state of Washington, including Democrats Patty Murray and Maria Cantwell and Republican Slade Gorton, and, quite prominently, to the cause of gay marriage. He has also given money to two liberal Democrats outside of Washington: John Conyers, of Michigan, and Patrick Leahy, of Vermont. Amazon, a Post source said, has demonstrated itself to be “a First Amendment absolutist” when it comes to the sale of controversial books (including “Mein Kampf”) and an unwillingness to censor reader comments. One political magazine that celebrated the sale wasReason, a libertarian publication. Its story called Bezos “the libertarian founder and C.E.O.” of Amazon and said that Bezos had contributed to the Reason Foundation. If Bezos is a libertarian, however, he is not one in the deeply conservative mold of the Koch brothers, who have shown signs of wanting to buy mainstream publications, including the Los Angeles Times. 
If Bill Gates, for one, had bought the Post, this might be a somewhat easier picture to discern. In his maturity, after making billions, Gates, together with his family, began to figure out what more he wanted to do, politically, morally, and otherwise. He wanted to put his fortune into the eradication of diseases, into educational opportunity, and other causes. Bezos, who is in his late forties, has not reached that stage of his life—he is still immersed in the formation and development of his business. His main outside interest has been to invest in Blue Origin, a human-spaceflight startup company, which sounds more Richard Branson than Donald Graham. He’s invested tens of millions in a ten-thousand-year clock. The experience with Amazon gives Bezos an extraordinary grasp of everything from technology to the consumer behavior of millions of people. But why he would pay a quarter of a billion dollars in cash for a newspaper remains an open question.

Ezra Klein knows which side his bread is buttered on. He's taking no chances.
But he's a journalist first so he did his homework. 
Wonkblog had a lot of coverage of the Bezos sale last night. Here are some facts about the sale from me, and a look at the economics from Neil Irwin, and a more elegiac meditation from Jim Tankersley. 
But Lydia DePillis’s late-night look at the role The Washington Post could play in augmenting Bezos’s core business is, I think, particularly useful. Though there’s nothing new about very rich men owning newspapers, Bezos is a bit unusual, in that the Post doesn’t cover his metropolitan area, and he remains deeply involved in Amazon’s vast and growing business. This is not the typical portrait of a detached media benefactor.
And here is the link to his recommendation:
Why The Washington Post isn’t a charity case for Jeff Bezos
By Lydia DePillis

“The Grahams are probably the last people in the world who’ll make money selling a newspaper,” Mutter says. “He overpaid. And why would he overpay? He sees the value in a brand that far surpasses what he’s looking at today.” 
So how’s that going to happen? A few ideas. 
1.)  The Post‘s website–which it’s fair to expect will be overhauled–could be a major new sales and advertising platform. “Newspaper publishing companies being agents of commerce is a major new opportunity in Bezos world,” Mutter says. “He invented e-commerce, you don’t think there’s going to be e-commerce on every page ofThe Washington Post?” 
2.)  It’s good to know things about your customers. Especially your readers. Most media companies watch where their readers come from, but Amazon has taken audience tracking and predictive analytics to a whole different level in order to figure out what they might want to buy. Integrating a news service, just like a book discussion site, could provide even more data. 
3.)   Content still matters, and so does reputation. Amazon’s biggest foray into content so far isn’t Business Insider. It’s Amazon Publishing, which has put out hundreds of books under several imprints. The problem is, it’s still hard to attract the best authors to an upstart internet banner, when they can still gain the imprimatur of a Farrar Straus & Giroux or a HarperCollins. “The early adopters of a straight-to-digital publishing model are not going to the the first-rate producers. Hillary Clinton is not going to publish her memoir with Amazon,” Mutter says. “There are all kinds of ways in which content will find its way to the digital marketplace, but it’s going to take a lot before the creme de la creme goes digital first. And frankly, that’s something that they have to work on.” 
4.)  The future is video. Amazon Instant is a draw to the company’s Prime service, and The Washington Post could become a credible outlet for more original news content, which it’s already started producing. 
5.)   Amazon owns the modern means of digital distribution. “He can just make The Washington Post the default app on every Kindle,” Mutter says.  [The core of these ideas came from Alan D. Mutter]  That would give the paper a visibility advantage few other news outlets can claim. 
6.)   Amazon also owns the modern means of physical distribution. It’s tempting to think that because Bezos created an online juggernaut that has eviscerated legacy industries, he would quickly dispatch with the Post‘s print product. But Amazon is also probably the most efficient physical delivery system the world has seen, and print advertisements still generate a lot of the Post‘s revenue. He could put a print copy in every package, and have a circulation of millions.
Here's another link. 
I don't recall where I found it. 
Jeff Bezos is an owner who knows how to deliver
By Jack Shafer

How could I have missed Bezos as a candidate for ownership? 
Bezos has the means. He is worth $25.2 billion to Michael Bloomberg’s $27 billion. Buying and operating the money-losing Post—its newspaper division lost $49.3 million in the first six months of this year—wouldn’t scare him. To paraphrase Charles Foster Kane, Bezos could absorb $100 million a year losses for 250 years before going broke. Bezos’s politics aren’t that different from Graham’s. To cherry-pick a conceit from my summer 2012 column, Graham and Bloomberg are beyondists,” David Brooks’s clever term for people whose politics appear to be centrist but strive to occupy a political space beyond left and right. Bezos’s non-doctrinaire, fluid politics make him a kind of West Coast beyondist, and as such an acceptable owner for Graham, who has resisted political labeling throughout his career. Although the libertarian movement claims Bezos as one of its own and he runs his company as free of government influence as he can, the political donations made by the Amazon PAC mark Bezos as a very practical beyondist: He contributes to both parties almost equally
In acquiring the Washington Post, Bezos enters a business that is not radically different from the ones he already owns. Reporters and editors like to think their literary arts are central to newspapering. But it’s better to think of a newspaper as a coordination problem that manufacturing and distribution solves daily: Copy, art, and advertising is beamed from newsroom to printing plant, bundled newspapers flow from the plant to trucks, are transferred to carriers, and are delivered to your front door. Nobody knows more about deadline deliveries and distribution than Bezos’s Amazon, which has spoiled several nations with its reliable service. I can’t imagine what plans Bezos has for the print edition of the paper—if I did, I’d be worth $25.2 billion—but I’m confident that he will maximize the value of the existing Post delivery system in novel ways. It would not surprise me to see him use the Post network of trucks and carriers to enter the local delivery business as a pilot project. Obviously, he’s learned a lot from same-day delivery he could share with the paper.
This next link isn't about the Post but speaks volumes about Amazon.
On Wednesday, WikiLeaks announced on Twitter that it had been dropped from its host site.

“WikiLeaks servers at Amazon ousted. Free speech the land of the free — fine our $ are now spent to employ people in Europe,” the group wrote in its Twitter message. “If Amazon are so uncomfortable with the first amendment,” the group later wrote, “they should get out of the business of selling books.”

Calls to Amazon’s Seattle office seeking comment were not immediately returned Wednesday night. But Senator Joseph I. Lieberman, chairman of the senate governmental affairs committee, said Amazon reached out to his office Wednesday morning, and that he planned on asking it “about the extent of its relationship” with the group. He said he was also calling on other companies to sever any ties with WikiLeaks.

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