News recently broke that Jeff Bezos, 49, has bought the money-losing Washington Post for $250 million in spite of the fact that last year he said: “People won’t pay for news on the web, print will be dead in 20 years.”
“There are two kinds of companies: Those that work to try to charge more and those that work to charge less. We will be the second.” -Jeff Bezos
Here, I shall list my top possible reasons he”d have for buying the 135-year-old paper and they are:
4 — Building His Own Media Empire
Kindle, Audible, IMDB, The Book Depository, Goodreads, Amazon Instant Video, LOVEFiLM and now The Washington Post. That’s quite a collection of media companies, from books to movies and newspapers, giving birth to another mammoth media empire. Bezos wealth shoots up to $25 Billion according to Forbes magazine, so maybe it’s a play for power and respect?
The tweet of investor and entrepreneur, Adam D’Augelli, best described this point, where he said: “Bezos, too, is doing what tycoons do – buying instruments of mass influence.”
“If you never want to be criticized, for goodness’ sake don’t do anything new.” -Jeff Bezos
3 – The Online Publishing Has Potential
Washingtonpost.com is the 405th most visited website in the world, and the 103rd in the United States. While the print side of business declined 4% in annual revenues, the “online publishing” increased by 8% to $25.8 million. As print declines, online can and will jump up, taking into consideration that Bezos has lots of resources to advertise for The Washington Post.
It took Amazon.com 8 years since it was founded in 1994 in a garage to post its first net profit in 2002, which reflects Bezos’ vision of how to run an online business. He might even shut down the print side of business and go online only.
“Above all else, align with customers. Win when they win. Win only when they win.” -Jeff Bezos
2 – Jeff Bezos Doesn’t Have a Clue
Bezos told The Post: “I don’t want to imply that I have a worked-out plan, this will be uncharted terrain and it will require experimentation.” You don’t spend a quarter of a billion on something you don’t know what you’ll do with, that’s what the common sense would imply.
But then read Bezos’ letter addressed to the newspaper’s employees, where he said: “There will of course be change at The Post over the coming years.” The question is, does he have a clue about those ‘changes’, or he is yet to learn by try and error.
“In business, what’s dangerous is not to evolve.” -Jeff Bezos
1 — Another Mistake!
To list a few failed investments, remember December 1999, when Amazon.com invested $60 million in Kozmo.com, the company that boasted free delivery within an hour.
In April 2001, Kozmo.com ran out of money and shut down operations. Same fate with WineShopper.com where $30 million of Amazon’s investment went down the drain in 2000.
Yes, this was Amazon.com and not Bezos himself, whereas now, Bezos Expeditions manages the personal venture capital investments of the Amazon.com CEO.
Expeditions has a fine track record in smart investments, mainly related to tech.
This foray into newspapers business might prove to be unfriendly terrain for the internet tycoon, as you can run away from your history, which tends to repeat itself.
Funny enough, Bezos receives a low annual salary of $1.68 million in total, which makes him one of the lowest-paid CEOs at a major public company, but the last time we checked, his stock ownership in Amazon is around 19%.