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Five reasons Jeff Bezos wants the Washington Post

Matt Hamblen | Aug. 7, 2013
Local digital content as part of $250M deal could be 'huge,' one pundit says

Said Gold: "Certainly, local news is important.... But the problem is that local news doesn't usually pay the bills. Papers have been cutting back on reporters covering local news. To do local news you have to have reporters scattered everywhere, so crowdsourcing is actually a more efficient way to do it, although it makes it harder to control quality."

If Bezos bought the Post for the local news, "it's going to be a tough way to pay the bills," Gold added, even as he noted it is still important to readers. "Like politics, at some level, all news is local news."

AOL started up Patch, a local online news service, about two years ago, but it has been a revenue loser, analysts noted. "Patch has not delivered here [in Washington] or anywhere else," Pexton noted. "If Bezos could figure local out, and innovate there, it could be huge."

Pexton said in his role as the Post's ombudsman until earlier this year he learned that activist readers in the Washington area often care as much about local politics and school board decisions as they do about national and international issues. "They're desperate for more [local] news," he said.

Gottheil said Bezos could well be highly interested in developing local content digitally to reap revenues and do something others haven't. "The full potential of local newspapers in electronic form has never been realized," Gottheil said. "Local papers have something that Google and national papers have not got, which is a local advertising [sales] force. Every pizza and cleaning shop could be a customer. Bezos would have to set up a network and skim profits, but Bezos is really smart and that's an interesting play."

One editorial executive who asked not to be named who works at one of the local newspapers Bezos is buying said the question for small business advertisers is whether they could get as much impact by posting their own fliers instead of paying for online mobile ads with a Bezos organization. He also questioned whether crowdsourced, user-generated content will be up to the standards demanded by Washington-area readers.

4. Bezos will raise his political capital in Washington.
Bezos "absolutely must be thinking that owning the Post could add to his influence in the nation's capital," Pexton said.

Aulette mentioned several topics of critical importance to — and other tech companies — that are discussed almost daily on Capitol Hill or within federal agencies. They include Internet taxation, patent reform, wireless spectrum allocation and even anti-trust litigation.

"Having influence in Washington is important to Bezos," Gottheil said. "There's the threat of anti-trust litigation from the Department of Justice. Here's Apple accused of fixing e-book pricing while Amazon wanted to sell e-books at a loss. Now, is left the primary distribution channel for e-books, so Amazon is facing the potential of anti-trust scrutiny."


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