Back in November, Tyler Cowen offered the prediction that once sale prices of book publishers and such dropped low enough that cash-rich tech companies (“Google, Apple, Amazon, and possibly Facebook, or their successors”) would buy them up and operate them essentially as loss-leaders for the overall enterprise. I thought that was correct at the time, but I wonder about Cowen’s assertion that Jeff Bezos buying the Washington Post constitutes “one step down this road.”
In a sense, yes, Bezos is the CEO of Amazon and Bezos bought a newspaper, so this is kind of like Amazon buying a newspaper. But in some ways it’s the furthest thing from Amazon buying a newspaper. After all, if Bezos thought it made sense for big tech companies to buy legacy media brands then Bezos could have made that happen. But he very deliberately didn’t make it happen. He sold a ton of Amazon stock and then took the cash and bought the paper personally. If he wanted the Post to become a subsidiary of Amazon and somehow fold the paper’s new paywall strategy into Amazon Prime or use its daily newspaper delivery service as the backbone for Amazon same-day deliveries, he could have made that happen. But he didn’t. And now that I think about it, Slate got its start start as a loss-leading Microsoft property that was supposed to be part of a broader online services suite but they eventually decided that didn’t make sense.