Posted by Tom Foremski - August 5, 2013
Foremski's Take: In his letter to employees from their new boss, Jeff Bezos, the founder of e-commerce giant Amazon, promises to keep the paper focused on what the reader wants and to follow important stories no matter the cost.
The paper’s duty will remain to its readers and not to the private interests of its owners….Journalism plays a critical role in a free society, and The Washington Post -- as the hometown paper of the capital city of the United States -- is especially important.
Owning the Washington Post will most certainly help Amazon's lobbying of the government, which has increased substantially over the past five years and is set to hit a new high this year (below), according to open secrets.com.
Corporate and sales taxes have been $AMZN's biggest issues. Lobbying Spending Database - Amazon.com, 2013 | OpenSecrets
To the extent that Amazon's lobbying issues overlap with that of other tech companies such as Google, Facebook, and others — the tech sector's lobbying efforts will also be helped by Mr. Bezos ownership of The Washington Post.
However, with big issues coming up for the tech sector, The Washington Post will find it hard to be seen as impartial on key subjects such as immigration and corporate taxes.
The Hill reports:
Amazon and other technology companies have urged Congress to cut the tax rate for income that they bring back to the United States. The company is also lobbying in favor of online sales tax legislation, arguing a single national framework is preferable to a patchwork of state laws.
There's no need for Mr. Bezos to direct the newsroom to do what he wants. Just the association of his name with the masthead will do the job.
This will essentially take The Washington Post's authoritative voice out of the public debate because of its owner and the perceived conflict of interest by its readers and others.
Great for access…
Politicians will go out of their way to meet with AMZN representatives because they are old enough to understand the power of the newspaper.
Although Mr. Bezos told employees to continue doing the same great job as before -- it's not true that they can pursue key stories in a range of contentious issues, with the same zeal and with the same influence as before because their work will be tainted by the newspaper's association with Amazon.
Amazon is increasingly competing in computer device markets, and there are reports it is planning a smartphone. There's a lot of stories that will have an Amazon component and that will hurt the independent reputation of the newspaper.
This is most certainly not a philanthropic gesture by Mr. Bezos, as some have suggested. If it were, then the purchase could have been made through a separate foundation set up by Mr. Bezos to demonstrate no intention to influence the newspaper. It's way too much money and there's way too much to be gained by Amazon and Mr. Bezos in this venture.
Rupert Murdoch and many other newspaper owners have used their newspapers for political influence for themselves and their allies.
And Gina Rinehart, one the world's richest women, has tried to take over Australian newspapers and influence media coverage of mining.
Special interest groups will gladly pay for the media they want you to read.
Mr. Bezos just bought the newspaper of the capitol of the world's most powerful nation. That's priceless. Yet most commentators assume he bought it as a business.
There's no reason to assume any other motive than influence in the purchase of The Washington Post because it certainly does not fit into any of Mr. Bezos' current business interests or Amazon's markets.
He out-bid all others for the newspaper, which indicates he wanted it at any price.
He clearly wasn't buying it for its business prospects as were the other bidders.
[He made a $5m investment in Business Insider in April, which is founded by Henry Blodget, the former discredited Wall Street analyst who made his name, and that of Mr. Bezos' when he predicted a sky-high stock price for Amazon — setting off an e-commerce stock market frenzy in the late 1990s that ended badly.]
He is buying influence by the metaphoric and literal ink barrel.
Friends in low places…
Mr. Bezos just earned himself a lot of new friends in Silicon Valley. And some companies might think twice about competing with Amazon in certain sectors, or go against Amazon on tech policy issues because of his perceived media clout.
Media is a loss leader, you need something else to sell. Amazon has a lot to sell.
It's a fabulous coup for Mr. Bezos, he's by far the most astute of the tech billionaires.
The price of $250m for The Washington Post is cheap compared with the future benefits to Mr. Bezos' personal brand and his business interests. He is inside the world's most powerful city.
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