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Amazon’s Jeff Bezos acquisition of Washington Post – a compilation of reports

During my stay in the DC area for close to a decade I have read Washington Post everyday. There were other few newspapers but the obvious choice was to subscribe to Washington Post. Founder & CEO Jeff Bezos bought the  prestigious signatory newspaper Washington Post from Washington Post Company [market cap of $4.38 billion at the time of writing this post] for $250 million – which translates to 0.5 times the annual revenue. A bargain indeed.

Bezos Entrepreneurial DNA

As of August 2013 Jeff Bezos is worth about $26 billion. Forbes ranks him as the 19th most wealthy man in the world, just ahead of Google’s Larry Page.

Bezoz is seen as a visionary. He founded Amazon in 1994 and defined ecommerce. In 2012 he predicted it was too late to persuade people to pay for news on the web.

Bezos is obsessed with building projects to survive over centuries. He builds for the sake of future scale. He has patience. All these qualities will come handy with Washington Post.

Jeff Bezos also has interest in Business Insider [source].

Falling Ad Revenue For Print

Print newspapers in the US are struggling to survive, ad revenues fell 55% between 2007 and 2012 as ad dollars have shifted to the web. Waiting to see that kind of shift in India!

Washington Post’s circulation had fallen from 769,000 in 2002 to 472,000 in 2012. For the same period the revenue fell by 31% to $582 million. While the revenue sounds big but the newspaper made a loss of $53.7 million in 2012 (against a profit of $109 million in 2002).

Bezos could absorb $100 million a year losses for 250 years before going broke!

Acquisition Of Newspapers In The US

New York Times sold Boston Globe for $70 million which it had bought for $1.1 billion in 1993.

Few of the other acquisitions in the print media in the US,

PaperPrice AcquirerDate
Washington Post$250 millionJeff BezosAugust 2013
Boston Globe$70 millionJohn Henry2013
Philadelphia Inquirer; Philadelphia Daily News$55 millionLocal Investors2012
Omaha World-Herald$200 millionWarren Buffett2011
Newsday$650 millionCablevision2008
Minneapolis Star Tribune$530 millionAvista Capital Partners2006

What Assets Did Washington Post Company Sell

The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.

Slate magazine, 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 in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC [source].

The Washington Post Company, which also owns Kaplan, Post–Newsweek Stations and Cable ONE, will be changing its name in connection with the transaction; no new name has yet been announced.

In 2010 Washington Post Co had already sold the famous weekly magazine Newsweek.

Short Messages Make Deals

Bezos wrote an email to Washington Post Co Chairman Don E. Graham “If you’re interested, I am”.

This reminds me of the famous one word SMS Gujarat Chief Minister Narendra Modi sent to Ratan Tata inviting him to shift the Nano car project from West Bengal to Gujarat – the SMS read “Swagatam

 Why Did Jeff Bezos Buy Washington Post?

And one of the articles said “Jeff Bezos may want to run for President!”

What Could Jeff Bezos Do With Washington Post?

Will the delivery of Washington Post stop at my friend’s house?

Will Digital Buy Print in India?

It is almost unthinkable for any digital property to buy a successful newspaper in India. Not happening in the near future. The revenues of print is far greater than online revenue in India.

Another interesting read is the views of Anant Goenka of Indian Express Group. Just today I came across the views of various players in media in India.