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August 5, 2013 10:01 pm
Jeff Bezos, Amazon’s founder, is to buy the Washington Post for $250m, ending an era of family control at a newspaper that played a defining role in US history during the Watergate era but struggled to maintain its influence in the age of online news.
Mr Bezos is making his first foray into print journalism in a personal capacity but the arrival of a deep-pocketed digital entrepreneur could shake up the Post and the wider newspaper sector.
The heirs of family matriarch Katharine Graham, the Post’s publisher during the Watergate scandal, emphasised the emotional cost of the decision. “This is a day that my family and I never expected to come,” said Katharine Weymouth, the fourth-generation publisher.
Donald Graham, the chief executive of Washington Post Co and Ms Weymouth’s uncle, told the Financial Times that he and Ms Weymouth had decided to look for buyers at the end of last year as they faced budgets predicting a seventh year of declining revenues.
They approached several potential buyers but negotiated a deal with Mr Bezos over two meetings in Sun Valley last month.
Mr Graham and his family were “surprised and sad that we were even thinking about this”, he said, “but we reminded ourselves that our ownership was supposed to be good for the Post, not just for the Graham family”.
The deal is the latest example of a struggling US metropolitan newspaper being bought by a wealthy individual. The New York Times this weekend sold the Boston Globe for $70m to the owner of the Boston Red Sox baseball team, John Henry. Warren Buffett, a former Washington Post director, has added to his portfolio of local newspapers in the past two years.
Mr Bezos will buy the Washington Post and some affiliated companies. The deal does not include the Post’s valuable headquarters building or Slate, the online magazine, or Foreign Policy magazine. The Washington Post Co, which owns the Kaplan education group, will change its name.
Mr Graham said Mr Bezos’ “proven technology and business genius, his long-term approach and his personal decency” would make him “a uniquely good owner”.
Mr Bezos, who will remain based in Seattle, has no record in newspapers but led a $5m financing package for the Business Insider website in April. He reassured staff he would play no day-to-day role in the direction of the Post, whose management had agreed to stay on.
“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,” he said. However, he acknowledged that change would be essential.
He added: “There is no map, and charting a path ahead will not be easy.”
Mr Bezos, whose company is regularly rated as one of the world’s most customer-focused, said his “touchstone” would be understanding what readers care about.
US metropolitan newspapers that once used profitable local monopolies over classified advertising to finance national and global coverage have suffered a decade of cutbacks as readers and advertisers migrated online.
In 2009 the Post, home of Watergate reporters Bob Woodward and Carl Bernstein, closed its bureaux in New York, Chicago and Los Angeles, retrenching to its home market where it had been challenged by competitors including Politico, the print and online upstart.
Shares in the Washington Post Company rose nearly 5 per cent in late after-hours trading after the deal was announced.
Additional reporting by Arash Massoudi in New York
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