NEW YORK (TheStreet) -- "About one thing I am certain: In 20 years there will be no more printed newspapers. If they do exist, they will be considered a luxury item for certain hotels to offer as an extravagant service for their guests. Printed newspapers will no longer be normal in 20 years."
Those were the words of Jeff Bezos while speaking to German paper Berliner-Zeitung.
So it came as a surprise when it was announced Monday that Amazon.com's (AMZN) founder and longtime CEO was buying The Washington Post, a money-losing newspaper company, from Washington Post Co. (WPO) for $250 million. Monday's press release said the Bezos-fronted entity acquiring the properties is not Amazon.com and that Bezos is making the purchase "in his individual capacity."
That's all well and good. And I want to take the press release at face value. But who are we kidding here?There are many theories as to why Bezos would risk what amounts to only a small fraction of his wealth to buy the Post. The most popular opinion is that Bezos, by the kindness of his heart, somehow "wants to save journalism." Well, "journalism" doesn't necessarily reside exclusively in newspapers. If that were the case, Bezos could have founded a journalism school for much less, or he could have simply made a sizable donation to one. Buying the Washington Post, as shrewd of a move as I have ever seen, is about power and influence. Let's not forget that for his $250 million, Bezos also gets other assets such as Southern Maryland newspaper groups, Fairfax County Times and El Tiempo Latino. He's also buying the Express newspaper, the Gazette and Greater Washington Publishing. Bezos, a brilliant mind by many standards, also understands the political pressures Amazon has been under. Bezos sees how rivals like Wal-Mart (WMT) gets killed in the press for a host of issues from disputes over low wages, killing off "mom and pop shops," to sourcing products from China. Wal-Mart, despite all of the good the company does, has never been able to catch a break. Amazon, meanwhile, has always gotten "pass" from the media. This is even though Amazon has employed similar sales tactics as Wal-Mart. Do you suppose that Bezos feels bad about crushing family-owned bookstores? Does anyone care about the fates of former rivals like Borders, Dalton's, Media Play and several others that were killed off by Amazon's online/e-books concept? Even Best Buy (BBY) -- though it is still breathing -- is hanging on by a thread. Much of the carnage that Amazon has left behind can also be linked to the fact that Amazon hasn't exactly been a great corporate citizen. Let's just get that out of the way.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV