Two days after John W. Henry, billionaire majority owner of the Boston Red Sox, bought the Boston Globe from The New York Times Co. for $70 million, Amazon CEO and founder Jeff Bezos revealed Aug. 5 that he is buying the Washington Post for $250 million in cash.
A pair of events this similar may be a coincidence. However, if a third major newspaper is purchased by a tycoon anytime soon, we may be seeing the beginning of a trend. That trend might be identified as powerful business people jumping in to help save a dying information industry–print news.
Or it could be seen as powerful people (with more money than they can ever spend) stroking their own egos by becoming publishers of famous newspapers. It could also be seen as rescuing a community resource, which is an angle most journalists personally hope is the case with each transaction.
Newspapers Finding New Saviors
In any event, the newspaper business–at least for the short haul–may be finding deep-pockets saviors, thus enabling millions of people who prefer their news on newsprint to continue reading it in the way to which they are accustomed.
According to Forbes, Bezos–whose Amazon.com and longtime partner Salesforce.com are the two most profitable and powerful cloud service providers in the world–is the 19th richest man on Earth. Amazingly, the purchase price of one of the world’s most famous and revered journalism businesses represents less than 1 percent of his net worth of $25.2 billion.
The net of the Aug. 5 news is simple but profound: The founder of a company started up in 1994 in an industry (the Internet) that did not exist prior to 1993 is now the owner of one of the oldest and most influential publications in the United States, if not the world.
To put this into perspective, Rutherford B. Hayes was President of the 37 United States when the Post was founded in 1877.
There is no question that over a span of generations, the Post has earned the plaudit of being one of the most credible and respected newspapers of record in the world. However, it has endured seven consecutive years of declining revenue. Can an upstart company with a shorter lifetime than a college student maintain the Post’s kind of historical record and also bring it back to prosperity? One would certainly hope so.
Implications of the Deal Are Far-Reaching
A captain of the IT industry now owns the Post. Here is his message to the employees of the Post announcing his intentions. The implications of this news are far-reaching; here are but three of them.
Impact No. 1: How will Bezos meld the assets of the Post into his Amazon.com kingdom? We could be seeing some innovation in this area, with the worldwide knowledge and credibility of the 750-person Post editorial staff mingling with the new-gen approach and attitude of the highly successful and creative Amazon staff.
Impact No. 2: Conflicts of interest. These immediately spring to mind when a powerful Internet pioneer such as Bezos–with the backing of Amazon.com–becomes owner of such an influential publication.
Conflicts of interest in media are hardly a new issue; they have been a historical problem since even before William Randoph Hearst served in Congress while remaining owner of the nation’s largest newspaper chain. But this is the new-media age, for and a captain of the IT industry–and by extension, Amazon.com–to own a major newspaper of record is breaking new ground.
For example, will the Post continue to cover important Internet-related stories objectively–especially those that impact Amazon.com directly? Examples include net neutrality, government using cloud services for domestic spying, cloud security, Internet governance, federal and state taxation on Internet sales and others. Readers will find out soon enough.
Bezos Buys Washington Post: Why It’s Big News for IT
An immediate example came to the fore Aug. 5. QuinStreet editor and colleague Paul Shread astutely noted that in five pages of Post coverage of the sale in its Aug. 6 print edition, there was only scant mention (one sentence) about Amazon’s warehouse working conditions. Those conditions have been criticized by employees in the past as being unbearable in hot weather, because no air conditioning was available.
For the record, Bezos told Amazon’s annual shareholders meeting last year that the company would be spending $52 million to retrofit its warehouses with air conditioners. There was no mention in the sale story Aug. 5 as to whether that has yet taken place.
By the way, Bezos’ announcement came a full eight months after a report in The Morning Call, a Pennsylvania newspaper, which detailed working conditions at an Amazon warehouse in Lehigh Valley. At that facility, according to the report, employees worked in sweltering temperatures in the summer and sometimes had to be removed on stretchers or in wheelchairs.
Is that a story the Washington Post will cover fairly in the future? This remains to be seen.
IT Leaders Now Showing Influence Elsewhere in the World
Impact No. 3: This is not just about the sale of a longtime business owned by one family — the Grahams, who owned the Post for more than 40 years — to another businessman. This is also the latest indicator that IT business leadership is now truly making a significant impact on the rest of the world. A lot of folks who made their fortunes in the IT business are now paying back some of their wealth into various communities, and this is a welcome trend.
Take into account, for example, the billions of dollars the Bill and Melinda Gates Foundation — the roots of which are tied to Microsoft’s longtime success — have given to educations and many other worthy causes over the last decade.
Marc Benioff, CEO and founder of Salesforce, wrote a multimillion-dollar check a couple of years ago that started a new, state-of-the-art children’s hospital being built for the University of California, San Francisco. It will be completed in 2015.
Larry Ellison, CEO and co-founder of Oracle Corp., personally has helped rebuild several local schools in Silicon Valley, has been a champion of the America’s Cup organization, and helps numerous other organizations on an anonymous basis, we’re told.
Leading by Example
Marc Andreessen, founder of Netscape and the man most responsible for the Internet browser as we know it today, has given millions to hospitals and other non-profits.
These are just a few top-of-mind individuals and their projects who lead by example. For every one mentioned here, thousands of other IT-business individuals are helping channel their efforts into worthy causes of all types.
Let’s hope that Mr. Bezos considers the Washington Post a worthy community attribute in addition to a viable news-gathering business, and not simply another ribbon to add to his “Captains of IT Industry” dress uniform.