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The Deal: Black, White and Red All Over The Internet

Stocks in this article: WPOAMZNBRK.B

NEW YORK ( TheStreet) -- The newspaper industry has either its latest class of potential saviors or fresh meat.

Jeff Bezos' $250 million purchase of The Washington Post came days after John Henry agreed to pay The New York Times (NYT) $70 million for The Boston Globe.

Henry could be seen as a white knight by virtue of his scorebox with the Boston Red Sox. As owner, he broke an 86-year curse when the team won the 2004 World Series, a tempting metaphor for a newspaper business turnaround.

In the post-Steve Jobs world, however, there are few examples of digital entrepreneurship on par with Bezos and Amazon.com (AMZN) Bezos' wealth, and the stature of the Post, greatly overshadow Henry's purchase.

"What this is signifying is that the digital transition, although having moved along quite a bit at the Washington Post, still has five years or so of very tough times ahead," said Outsell Inc. analyst Ken Doctor.

"I think that's the number one reason the Grahams sold."

It has been tough to call the turning point for newspapers. There have been a number of ambitious buyouts that led to Chapter 11.

"There are people, especially in the last seven to eight years, who have bought into the newspaper industry believing that it was at a bottom," Doctor said.

Sam Zell led an $8.2 billion buyout of Tribune in 2007, a year after Bruce Toll and Brian Tierney bought the Philadelphia Inquirer and Philadelphia Daily News from McClatchyfor $562 million. Both wound up in bankruptcy.

"It turns out that they are not distressed assets," Doctor said, "but it's a distressed industry."

A fundamental question is what kind of owner Bezos will be.

Buffett's Berkshire Hathaway (BRK.B) has been an active buyer of papers, Doctor noted, but has not changed much of their operations. It has closed a paper, but has left local management in place under the oversight of the Omaha World-Herald's Terry Kroeger.

Aaron Kushner, who made a fortune selling an online business and in greeting cards and who previously pursued the Globe, has taken a more active role since buying the Orange County Register.

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