August 7, 2013 in City

Post a challenge for Bezos

‘No map’ for reviving paper, Amazon.com’s founder says
Michael Liedtke And Bree Fowler Associated Press
 

Amazon.com CEO Jeff Bezos is revered as one of the brightest minds in corporate America, but even he is still puzzling over how to reverse the financial slide threatening the Washington Post and other major U.S. newspapers.

Nevertheless, Bezos is determined to face the challenge, raising hope that his $250 million purchase of the Washington Post announced Monday will provide the newspaper industry a template for making the leap from the printed page to digital devices.

“The marriage between the newspaper industry and technology has never been consummated, but it could happen at the Washington Post now,” said media analyst Ken Doctor, of Outsell Inc.

Although Bezos bought the Post with his own money, most experts believe he is likely to tether the newspaper to Amazon.com Inc.’s products. He might also infuse the newspaper with some of the customer-first concepts that helped turn the Seattle company from an online bookstore into a multidimensional business that sells a multitude of merchandise and runs data centers that power other websites around the world.

“Just having his brain in the room will force people to confront digital in a way they haven’t before,” predicted Jerry Ceppos, a former newspaper editor who is now dean of mass communications at Louisiana State University.

Bezos, 49, made it clear that he has no magic formula for turning the Post around. The newspaper is the anchor of a division that lost $54 million at The Washington Post Co. last year while generating revenue of $582 million – 39 percent less than it did in 2005.

“There is no map, and charting a path ahead will not be easy,” Bezos wrote in a Monday letter sent to Post employees after his surprise acquisition was announced. “We will need to invent, which means we will need to experiment.”

According to an Amazon spokesman, Bezos wasn’t available to be interviewed Tuesday about his plans for the Post.

Amazon’s nearly two-decade history under Bezos’ leadership suggests the Post is likely to try things that other newspapers steeped in tradition have never dared to attempt.

“Ever since he was a little kid, it got deeply ingrained into Jeff that experimentation is the answer to everything,” said Hal Gregerson, who interviewed Bezos for his 2011 book, “The Innovator’s DNA.” “Exploring the edges is one of Jeff’s counterintuitive skills. If you go back to when he started Amazon, he was paying attention to something out of the corner of his eye and turned it into something that others didn’t see.”

It’s impossible to predict the bright ideas Bezos might explore, partly because reviving the Post would probably take years to pull off. Experts are floating a host of possibilities. Bezos could, for instance, deploy the technology that Amazon uses to recommend books, movies and music to consumers to enable the Post to automatically tailor digital news packages to each reader’s interests. He might impose more fees to read the Post’s content online. At the same time, he might bundle free subscriptions as part of Amazon’s Kindle Fire tablet or for consumers who buy Amazon’s “Prime” service for free shipping. He could even include special offers in the printed edition for discounted or free Amazon.com deliveries.

Newspapers have been suffering because their main source of revenue – advertising sold in their print editions – has been falling sharply during the past eight years as marketers discovered they could target their messages at prospective customers more effectively through Google’s search engine, Yahoo, Facebook, Twitter and a variety of other digital outlets.

Bezos has been making rapid inroads in digital advertising at Amazon. The company’s annual ad revenue is expected to total about $835 million this year, up 37 percent from $610 million last year, according to estimates from the research firm eMarketer.

Bezos is also in a better position to absorb ongoing losses at the Washington Post than the newspaper would have been had it remained part of a publicly held company under pressure to deliver better returns for a larger pool of shareholders.

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