When Jeff Bezos bought the once mighty Washington Post, many wondered if even the genius behind Amazon could save the struggling masthead, including Bezos himself.
Jeff Bezos was surprised by the call. "Why would I even be a candidate to buy the Post?" he asked the woman on the line, Nancy Peretsman, who was working for the famous newspaper company in an attempt to find it a new owner, after years of brutal cuts and dwindling readership. "I don't know anything about the newspaper industry."
He seemed cool to the idea. But he'd known about the Post since he was a kid and had watched the Watergate hearings on television, lying on the floor of the living room next to his grandfather. The bald-but-boyish-looking 49-year-old was a notoriously competitive businessman and people close to him spoke of his peculiar fascination with broken business models. He was intrigued enough about the telephone call to begin looking at some research on the decline of newspapers and wondered whether the Post, having been cut to the quick, could ever fully heal. On the other hand, he knew from Amazon's book sales and his success with the Kindle tablet that people were reading more than ever.
Bezos was also notoriously press-shy. Most people had no idea what he looked like and stories about his retail empire almost always contained the line, "Amazon declined to comment." But he was a vigorous defender of the First Amendment and had fought efforts to ban controversial books, like Hitler's Mein Kampf, from public libraries. Press freedom also aligned with his libertarianism. Bezos wasn't political in a partisan sense. He'd contributed to a few Democratic candidates but also Libertarian Party presidential candidate Gary Johnson and the libertarian Reason Institute. He cared most about issues like gay marriage and had spent millions to help pass an initiative legalising gay marriage in Washington State. He wasn't the type to interfere with the paper's editorial independence - or at least he didn't seem to be.
Before he could consider the purchase, Bezos said, he would have to answer three essential questions. He called them "gates" he needed to clear. First, was the Post still a serious, important institution whose lost lustre could be restored? Second, could he be optimistic about the future of the Post when the internet had just about destroyed its business? Third, could he personally add the value and technical knowledge needed to reverse its downward spiral?
Like Warren Buffett, a major shareholder in the Post, he invested for the long term. His focus on customer service was maniacal. Besides its giant retail services, Amazon also made billions from offering cloud computing. In both areas Bezos focused on providing a great and frictionless user experience. His strategy was to build a mammoth customer base and huge size. Amazon's profit margin was thin, but Bezos was patient about profits as he built scale. These approaches could help revive the Post.
Building Amazon had been an incredible feat. The Everything Store, as it was known, now accounted for almost half of every dollar spent online. In 2018 its market valuation would hit a trillion dollars. More than 90 per cent of its value was due to profits expected almost a decade later.
Bezos had been the ultimate disrupter, while the Post had its ingrained ways that might prove to be intractable. Over the spring and summer he spoke again with Peretsman and then with the Post's publisher and owner, Don Graham, but there were long gaps between the calls, so Graham was never sure how serious he was. He had convinced Bezos that newspaper industry knowledge was far less important than knowing the internet, which some argued that Bezos had mastered, or at least monetised, better than anyone else.
He had the head of an engineer and the heart of an adventurer. Ultimately Bezos was convinced that the Post would be a terrific premium offering for the Kindle and Prime. Restoring its glory would be a contribution to democracy.
Graham and Bezos agreed to talk further at the annual media summit in Sun Valley they would both be attending, along with most of the rest of the media industry's upper crust. There hadn't been so much as a peep that Graham had decided to sell, nor that Bezos might be his white knight. There could hardly have been a more fraught setting for this sensitive conversation with such a concentration of would-be outbidders.
After just two meetings, Graham gave Bezos time to review some financial statements. When Graham came back to him with what he thought was a fair selling price, Bezos did not blink. With a US$25.2 billion personal fortune, the purchase represented 1 per cent of his net worth, a rounding error for the world's then-19th richest man. Bezos did not bargain. He did not have his bankers and lawyers do due diligence. He would be buying the Post personally, not through Amazon, in part to avoid conflicts of interest. Having decided that his three gates had been cleared, there was nothing left to negotiate.
As the deal was being finalised, it seemed a good omen that the Post unearthed its biggest scoop since Watergate. Barton Gellman, well known as a national security expert and one of the big talents who had left the paper in 2010, returned as a freelancer with something huge for the paper's editor, Marty Baron. He had a source at the NSA who wanted the world to know about his agency's secret use of widespread domestic spying, aided by most major tech companies, which had been turning over private communications to the Government. It was on a scale no one imagined. Gellman's source, who turned out to be Snowden, had decided not to take his stolen documents to the New York Times, having seen them hold their earlier NSA story so long. Through film-maker Laura Poitras, a national security expert, Snowden had also approached the Guardian, the British paper that had published Wikileaks. Gellman wanted institutional backing in the US, and it made sense to bring the story to his former employer.
Baron had been at the Post only a few months when Gellman handed him the kind of story editors dream of. He had come into a cache of classified documents, he told the new executive editor, and would use them to tell an Earth-shattering story but only on the condition that he, Gellman, would have final say as to which papers the public saw and which editors would be assigned to him. Baron, like Bezos, did not call in the lawyers. He simply told Gelman, "That will work"; and soon he was seeing the astounding reach of the NSA's domestic spying, with trap doors into Facebook, phone providers, and other places where consumers had no idea their data were being seen by the Government. The Snowden NSA stories would affirm for Bezos that he was through his first gate: the Post was still an important institution. The run of Snowden scoops and another big story that forced out the Governor of Virginia, made it clear that if reporters were deployed in the right way by the right editor, the paper still had plenty of juice.
In the late afternoon of August 5, 2013, Graham gathered everyone at the Post to make what he called "the most surprising and shocking announcement". In a grey suit and a red power-tie, he began his nine-minute address in a steady voice but it was cracking with emotion by the end. He had never imagined he'd be standing there, in the building he'd first entered as a 3-year-old to watch Harry Truman's inaugural parade, to say goodbye. He outlined why he'd decided to sell and why Bezos was the right man to lead the paper into the future.
Family ownership no longer served the Post. The family was facing questions to which he confessed they "did not have the answers" After seven years of revenue losses, there would have had to be more cutting and he no longer believed such measures would permit the Post to continue to be the paper it once had been. He assured everyone that while it technically could have survived without a sale, "we wanted more for the Post. We wanted it to be successful."
He reminded everyone that Buffett thought Bezos was the best CEO in America and that he was famous for patiently investing for years in order to solve problems. His voice shook noticeably as he said, "This may be a crucially good day for the Post."
He thanked many reporters by name, as well as his niece, whom he praised for returning the paper to "cash-flow profitability" well before the three-year deadline he had given her. Perhaps because it would have made him even more emotional, he did not invoke his mother [former publisher Katherine Graham].
Then a statement from Bezos was read, who had decided not to appear that day but would meet his new employees in a few weeks. He had written the remarks himself and began reassuringly, "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."
There was the requisite Watergate invocation: "While I hope no one ever threatens to put one of my body parts through a wringer, if they do, thanks to Mrs Graham's example, I'll be ready." (Attorney-General John Mitchell had threatened that if the Watergate coverage continued, Katharine Graham would have her "tit in a wringer". A dentist subsequently sent her a gold charm of a wringer he had fashioned and journalist Art Buchwald gave her a little breast to go with it.) With the rate of technological change transforming everything in the business, Bezos stressed the need to experiment.
Media analyst John Morton summed up the stunned reaction to news of the sale, saying it was all but unimaginable: "The newspaper is the basic foundation not only of the company but of the family. The only family that would be less likely to sell its principal asset would be the Sulzbergers at the New York Times." Indeed, within days Sulzberger sent a note to his staff assuring them that the family had no intention of selling the Times.
When Bezos made his entrance in early September for two days of whirlwind meetings, he knew what notes to hit. At a town hall with employees, he spoke at length and without any prepared remarks. The sound system gave him some trouble but he seemed confident and jovial, sometimes exploding into loud laughter at his own jokes. The presence of 92-year-old former editor Ben Bradlee and Bob Woodward, who broke the Watergate story in the Post with Carl Bernstein, gave the debut a sense of history and gravitas. Bezos understood that they symbolised the Post's glory but also had made the paper resistant to change.
"You have to figure out how can we make the new thing? Because you have to acknowledge that the physical print business is in structural decline," he said. "You can't pretend that that's not the case. You have to accept it and move forward ... The death knell for any enterprise is to glorify the past, no matter how good it was, especially for an institution like the Washington Post, which has such a hallowed past."
All companies should stay "forever young," he added, invoking the Bob Dylan song. He stressed the importance of investigative reporting. Though he did not say the newsroom would be given new resources to grow, he indicated the years of cutting had ended. He wasn't moving from his Washington to theirs, nor would he try to "out-Don Don." He had "to do this as Jeff."
Bezos' promise to Baron and Ryan was that he would "provide the runway" for the Post to restore its journalism and he could add the best technology to truly complete its digital transformation. But in no way did he view the purchase as an act of charity. He was in it to make money, not right away but soon. Still, it was a fundamental principle of business, he knew, that you have to spend money to make money. So Baron went on a hiring spree and added 70 people in the first year and a half, to bring the newsroom headcount back to 700. He hired five new political reporters, not only to compete with Politico but also to restore morale by showing they were back at the top of campaign coverage. He did not revive everything that had been cut, however. The old domestic bureaux remained shuttered but Baron expanded the Post's national reach without them, hiring specialists in key areas, like a new technology reporter in Silicon Valley.
The simple fact of new faces around the office was a shot in the arm for a newsroom whose reporters had spent too long wondering anxiously if they would be the next to go. So was the spike in traffic they saw under Bezos, attributable mainly to the website's new practice of publishing content in the early morning when audience attention was at its peak. In October 2015, exactly a year after Bezos officially took control, the Post actually passed the Times in unique monthly users. The victory was by a hair, according to the analytics firm comScore — 66.9 million to 65.8 million — but for the Post it was an almost 60 per cent increase over the previous year. The next month the Post widened its lead and even surpassed the traffic behemoth BuzzFeed.
Bezos took out ads cheekily proclaiming that the Post was "the new publication of record". That was over-reach, but the Times understood the message for what it was, the start of an old-fashioned newspaper war that would end up making both publications stronger and re-establishing their importance. The energy had returned, as blogger Chris Cillizza tweeted, and there was "no more exciting place to work in journalism right now". While others proclaimed the Post's brand was back in action, Baron preferred to think of it as the paper's soul.
When Baron travelled to Amazon headquarters in Bellevue, Washington, for one of the first times, Bezos stressed the need to hire the best engineers and to have them embedded right beside the journalists. So new engineers, 35 of them, came on board. This further empowered Shailesh Prakash, a Graham holdover, newly energised in the Bezos era as chief information officer. He pushed hard to have the newsroom adopt what he called "a product mindset". He believed that content was king but that it made no sense to have good content without a sleek and fast-loading web design. Baron disliked industry jargon, especially the word "content", which had supplanted "story" or plain "journalism". But in Prakash he had found a perfect partner to mesh journalism with product design.
Baron and Prakash easily forged their partnership because they were both technologists, but they also shared a sense of mission. "One thing I've found is very important is that journalism is cause-operated," asserted Prakash. "Most of us believe if tomorrow the Washington Post disappeared, it would be bad for society. That cause is important." Bezos agreed.
Despite the Post's digital strides, however, its print circulation continued to decline. The roughly 432,000 copies printed most days was half of what the daily circulation was at its peak in 1993. But as long as the paper was quickly expanding its digital readership, the decline in print seemed inevitable to Bezos, who said he thought that one day the print newspaper would become an exotic luxury item, like a horse.
He wanted the Post to be attracting the greatest possible number of readers but he did not believe in the digital mantra that news should be free. He thought people should pay for what they read - but maybe not all of them and maybe not just yet. Bezos' basic idea for the Post was the same one that guided Amazon: get big fast.
Bezos, Baron, and Prakash decided to go all in with Facebook Instant articles, fast-loading versions of Post stories that were published on Facebook. They gave Facebook everything rather than a select number of stories to share for free on the social network, as the Times did.
The new app Prakash helped design was extremely attractive, with large photos zooming bigger as readers scrolled down their mobile screens. Besides being more visual — a necessity to attract younger readers, as BuzzFeed had long ago figured out — it contained noticeably more stories that were pure clickbait, which did worry some in the newsroom. "Doctors were startled to find the cause of this 24-year-old's excruciating pain," read one such headline. Many were straight out of the Matt Stopera frame book at BuzzFeed, with the tease, "This is what happened next." But no one was complaining about dancing bears anymore. The Post needed some clickbait to achieve scale and keep Bezos happy. As long as Baron was being given the resources for great investigative and political reporting, he could stomach the clickbait.
Each time the Post beat the Times in the monthly traffic contest, there was jubilation. At the Pulitzers in 2013, the Times took home only prizes for its photography, while the Post shared the grand prize, Public Service, with the Guardian for their Snowden coverage. Soon, Baron would be played by Liev Schreiber, a muscular actor with a strong jaw typically cast in superhero roles, in Spotlight. So as Baron went about the duties of editing the presumptive new paper of record, he was followed around by Schreiber, who studied his movements and mannerisms carefully. Spotlight would win the Academy Award for Best Picture and Hollywood would once again make the Washington Post's leader the most well-known editor in America. Esquire called him the best editor of his generation, the worthy heir of Ben Bradlee.
Edited extract from Merchants of Truth: Inside the News Revolution by Jill Abramson (Bodley Head, $38).