Those who believe the newspaper business is more than a “dead trees” industry headed for oblivion will be toasting the Amazon founder Jeff Bezos today after his stunning purchase of American media institution The Washington Post.
Bezos has invested $250m (£163m) of his $23.2 billion (£15.1 billion) fortune in the paper that brought down 37th President Richard Nixon by exposing the Watergate Scandal in 1974. That story from an ink-stained past has inspired journalists ever since, largely thanks to the film version All the President’s Men, which featured Robert Redford and Dustin Hoffman as Post reporters Bob Woodward and Carl Bernstein.
Tech entrepreneurs were supposed to have other role models. Star Trek and Star Wars are the recurring themes. Indeed, Bezos has been obsessed with space since high school, when he had dreams of setting up space hotels and supporting colonies of several million people orbiting around the earth. In 2000 he set up Blue Origin, which is one of the companies at the forefront of developing space travel. He has also spent millions on a plan to build a clock that will last for 10,000 years in the West Texas desert.
And now Bezos splashes out (albeit with relative loose change) on a newspaper, a flagship of the old media that has lately been giving Amazon and fellow Internet success story Google so much grief over their tax arrangements.
For the worldwide news business it is a bitter sweet moment: a humbling example of where financial power lies in the modern era – but also a vote of confidence in the value of the product. No one could say that Bezos has no grasp of the digital future and, in that sense, he is a great champion for one of the world’s great news brands.
This hasn’t happened in total isolation. Warren Buffett, the great philanthropist and business guru, is another notable recent investor in the newspaper industry. Online giants have shown interest in acquiring news-based businesses with AOL having paid $315m for the Huffington Post website in 2011.
But this is a newspaper brand and, despite early speculation on how Washington Post subscription offers and distribution expertise might provide value for Amazon and its Kindle readers, this acquisition has been made by Bezos personally, rather than his company.
The founder of a business that transformed the way the world buys and reads books, Bezos, 49, has said that he has a “fondness for the written word” and has promised not to interfere with the editorial output. Clearly he is trusted by the Graham family, guardians of the Post for more than 60 years.
In April Bezos invested in the financial journalism site Business Insider. His comment that he has a “fantastic day job”, suggests he sees the Post as a challenge rather than an investment. “We will need to invent, which means we will need to experiment,” he says.
After years of seeing the big Internet companies as parasitic threats, other newspaper businesses will be dreaming of an online sugar daddy. And those who denigrate traditional news publishers as dinosaurs with no part to play in the digital world will have to accept that they are out of step with tech futurists such as Jeff Bezos.