What is Jeff Bezos Buying With WaPo Purchase?

As news spread yesterday evening that Jeff Bezos is buying the Washington Post, the discussion quickly turned to why the Internet visionary would pour $250 million of his own money into a venerable but financially struggling old media business.

While publicly traded Amazon is not involved in the purchase–Bezos will take the newspaper private and be its sole owner–observers are drawing connections between the two businesses.

Brad Stone, author of The Everything Store: Jeff Bezos and the Age of Amazon, told the New Republic:

“This is maybe going out on a little bit of a limb: but look, he’s buying a lot of political influence. And we can’t discard the fact that Amazon hasn’t been an enormous player, at least up until the dispute over sales taxes, and in buying The Washington Post, he has a seat at the table. And I think particularly legislators and anti-trust regulators are gonna be weighing the dominance of Amazon a lot in the years ahead.”

Bezos has personally kept a low political profile. But Amazon, after years of opposing an Internet sales tax, is now one of its leading proponents, funding lobbying efforts to pass the Marketplace Fairness Act. The Washington Post reported in February: “Amazon was joined by Target and Wal-Mart in support of the bill; eBay and Overstock.com have opposed it.”  (You may recall Overstock and Amazon’s deep discounting battle).

The Daily Beast in May ran a piece detailing why an Internet tax would now give Amazon a competitive advantage over smaller retailers and highlighting the Seattle company’s ability to persuade lawmakers.

Aside from political influence, the Washington Post could also supply Amazon with content, Michael Sebastian wrote in AdAge:

“One way to make money from the Post — beyond selling advertising and newspapers — could be to harness the library of content at the paper. Brands, maybe even Amazon, need content. Why reinvent the wheel by hiring journalists or creative to produce it, when you can just buy a newspaper?”

Bezos said yesterday that he doesn’t plan to be involved in day-to-day operations of the newspaper. In an open letter to employees, he pointed to challenges in the digital era:

“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. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment.”

He also reassured employees:

“The values of The Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners.”

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