Amazon`s BEZOS Taking Over the Washington Post, Ebay`s OMIDYAR Adventuring into Journalism...
Print Media Wheel on the Verge of Reinvention
eBay
Inc founder Pierre Omidyar has become the latest self-made tech baron
to plunge into the struggling news industry hot on the heels of Amazon.com founder Jeff Bezos, who just paid $250 million for T h e W a s h i n g t o n P o s t.
Bezos stunned the world on Aug. 5 by buying the storied but troubled Washington Post.
Woodward and Bernstein’s old stomping ground has suffered a 44 percent
drop in revenue over the past six years. In his public apology tour, Donald Graham, the family scion who sold the newspaper and
related assets to Bezos, said he could not in good conscience continue
to lose his shareholders’ money. Nor could he stomach further
diminishing the reputational value of the Post. Something had
to give, or in this case, someone: Bezos ponied up $250 million for the
rights to Graham’s paradox. That price is 17 times adjusted profit, or
about four times what major metro dailies usually fetch.Bezos has
always loved the written word. As a child he devoured a library full of
science fiction novels near his grandparents’ ranch in Cotulla, Tex.,
and he’s still a voracious reader who tackles several newspapers a day
on his Kindle. Books inspired many of his most important strategic
decisions, from Amazon’s origins as an online bookstore to the creation
of the Kindle and Amazon Web Services to his cultivation of a frugal,
action-oriented corporate culture—principles he plucked right from the
autobiography of Sam Walton, the legendary founder of Wal-Mart Stores.
Strategic Investment
A decade ago, frustrated with the pace of meetings at his company, Bezos banished PowerPoint and proclaimed that all future Amazon meetings would begin with the presenter passing out a narrative document that outlined the topic being discussed. The first papers were endless, spanning dozens of pages, so Bezos decreed a six-page limit. Many of his colleagues still thought this managing-by-writing approach would fade. It didn’t. “The truth is that Jeff deeply respects the power of the printed word,” says David Risher, an early Amazon executive.
Reading and writing aren’t just central to Bezos’s management style. His wife, MacKenzie Bezos, is a respected writer who just published her second novel, Traps. He’s not bad at twirling a word himself. Bezos’s annual letters to shareholders are widely read and shared in the business community—to be expected given Amazon’s size and sway. But the prose doesn’t merely stand out on the CEO curve; it’s actually good. From his 2012 letter: “Our passion for pioneering will drive us to explore narrow passages, and, unavoidably, many will turn out to be blind alleys. But—with a bit of good fortune—there will also be a few that open up into broad avenues.”
Bezos has been trying to build editorial businesses within Amazon for years. In the mid-1990s, when his now-quaint ambition was to create the largest bookstore on the Web, Bezos staffed up a large editorial department in an attempt to give Amazon.com the trusted touch of an independent book shop. These writers and editors—many of them former journalists—were eventually downsized during the dot-com bust and amid an acrimonious, internal competition with personalization algorithms. Bezos concluded back then that computers, not people, could more efficiently recommend the products that customers were apt to purchase.
Reinventing the Print Media Wheel
He didn’t give up his dream of developing new forms of media, though. With the rise of the Kindle, Bezos created publishing imprints that encouraged authors to experiment and sell their books directly to readers while collecting an above-average royalty. This was immediately framed by observers as an attack on Amazon’s oldest partners, traditional publishers—and it was, in part. But Kindle Singles, which distributes bite-size novellas, and Kindle Serials, books that are meted out in chapters, have also given writers new ways to find an audience and earn a living. He’s attempting to do something similar with Amazon Studios, which backs original television shows and gives filmmakers an outlet for their work outside the usual Hollywood power structure. Bezos isn’t trying to kill the media business; he’s trying to reinvent it, racing against the likes of Apple (AAPL) and Google (GOOG) to build the most comprehensive array of devices and innovative online news and entertainment services.
Strategic Investment
A decade ago, frustrated with the pace of meetings at his company, Bezos banished PowerPoint and proclaimed that all future Amazon meetings would begin with the presenter passing out a narrative document that outlined the topic being discussed. The first papers were endless, spanning dozens of pages, so Bezos decreed a six-page limit. Many of his colleagues still thought this managing-by-writing approach would fade. It didn’t. “The truth is that Jeff deeply respects the power of the printed word,” says David Risher, an early Amazon executive.
Reading and writing aren’t just central to Bezos’s management style. His wife, MacKenzie Bezos, is a respected writer who just published her second novel, Traps. He’s not bad at twirling a word himself. Bezos’s annual letters to shareholders are widely read and shared in the business community—to be expected given Amazon’s size and sway. But the prose doesn’t merely stand out on the CEO curve; it’s actually good. From his 2012 letter: “Our passion for pioneering will drive us to explore narrow passages, and, unavoidably, many will turn out to be blind alleys. But—with a bit of good fortune—there will also be a few that open up into broad avenues.”
Bezos has been trying to build editorial businesses within Amazon for years. In the mid-1990s, when his now-quaint ambition was to create the largest bookstore on the Web, Bezos staffed up a large editorial department in an attempt to give Amazon.com the trusted touch of an independent book shop. These writers and editors—many of them former journalists—were eventually downsized during the dot-com bust and amid an acrimonious, internal competition with personalization algorithms. Bezos concluded back then that computers, not people, could more efficiently recommend the products that customers were apt to purchase.
Reinventing the Print Media Wheel
He didn’t give up his dream of developing new forms of media, though. With the rise of the Kindle, Bezos created publishing imprints that encouraged authors to experiment and sell their books directly to readers while collecting an above-average royalty. This was immediately framed by observers as an attack on Amazon’s oldest partners, traditional publishers—and it was, in part. But Kindle Singles, which distributes bite-size novellas, and Kindle Serials, books that are meted out in chapters, have also given writers new ways to find an audience and earn a living. He’s attempting to do something similar with Amazon Studios, which backs original television shows and gives filmmakers an outlet for their work outside the usual Hollywood power structure. Bezos isn’t trying to kill the media business; he’s trying to reinvent it, racing against the likes of Apple (AAPL) and Google (GOOG) to build the most comprehensive array of devices and innovative online news and entertainment services.
Unlike
Bezos, the French-born Iranian-American Omidyar says he aims to build a new
“mass media organisation” from the ground up, and his first recruits are
the journalists who exposed the US government’s surveillance
programmes, using documents leaked by former spy agency contractor
Edward Snowden.
The new venture puts Omidyar, 46, in the public eye after many years of relatively low-profile philanthropic and investment activities. While he has long supported efforts to promote transparency and accountability in government, including a local news website in his home state of Hawaii, Omidyar suggested that he is prepared to spend as much as Bezos did in buying the P o s t to take those efforts to a new level. “I want to find ways to convert mainstream readers into engaged citizens,” Omidyar wrote in a blog post. Omidyar’s new endeavour, as yet unnamed, will face myriad challenges. Established news organisations are struggling to find a viable financial model as print advertising and circulation plummet while online advertising dollars migrate to Google and to automated ad exchanges that drive prices down. He has yet to offer any clues about his business strategy. Media investments generally do not make good investments, said David Cowan, a partner at Bessemer Ventures. “I’m pretty sure Pierre doesn’t think that a news startup is the best way to get richer,” he said.
Hobby Horse Born in France to Iranian parents, Omidyar grew up largely in the Washington, DC area, with a stint in Hawaii. He graduated from Tufts University near Boston in 1988 with a degree in computer science, and moved to Silicon Valley. While working as a software engineer at then-hot personal-communications company General Magic, Omidyar came up with the idea for eBay in 1995 and worked on it as a hobby until it became big enough for him to quit his day job. When eBay went public three years later, the then 31-year-old Omidyar’s stake was valued at $611 million by the end of the trading day. He still owns almost 9% of the $70-billion company today, making him eBay’s top shareholder. Forbes pegs his wealth at $8.5 billion. Omidyar serves as eBay’s chairman, but has not been involved in its day-to-day operations for years. During the summer, Omidyar considered purchasing T h e Wa s h i n g t o n P o s t, he wrote in his blog. While the P o s t eventually sold to Bezos in August, the process “got me thinking about what kind of social impact could be created if a similar investment was made in something entirely new, built from the ground up,” he wrote. Those musings led to his latest project, which he is billing as “My Next Adventure in Journalism.”
Passionate about Journalism Omidyar Network, the investment firm founded by Omidyar and his wife, Pam, in 2004, has backed some 25 organisations dealing with news and government transparency, including News Trust, a news-discovery site run by the non-profit journalism centre the Poynter Institute; the Sunlight Foundation, a government-transparency nonprofit; and Transparency & Accountability Initiative, a Londonbased organisation. “Pierre gets journalism,” said John Temple, founding editor of Honolulu Civil Beat, the news site launched by Omidyar in 2010. “He’s passionate about it and knows how to create an environment and culture where journalists feel energised and empowered.” Omidyar’s comments on Twitter in recent months show an increasing discomfort with the workings of the US government. “There goes freedom of association,” he tweeted earlier this week, linking to an article in T h e Wa s h i n g t o n P o s t about the National Security Agency collecting email address books.
But in his Wednesday blog post, Omidyar emphasised his new endeavour would go beyond investigative reporting, and would “cover general interest news, with a core mission around supporting and empowering independent journalists across many sectors and beats.”
That broad approach makes sense, said Arianna Huffington, creator of the H u f f i n g t o n P o s t, which started an edition in Hawaii earlier this year through a partnership with Omidyar’s Civil Beat. “He wants this to be a business, and that’s not possible without having a site that’s about general news and everything that people are interested in,” H u f f i n g t o n said in an interview. “And for the conclusions of investigative journalism to have impact – and he wants to have impact – you have to capture the public imagination. If you have people coming to the site for other reasons, they are more likely to engage.”
Civil Beat To some extent, Omidyar seems to be shifting what he has been trying with Honolulu Civil Beat to a broader stage. Civil Beat aimed to create a new online journalism model with paid subscriptions and respectful comment threads. Patti Epler, current editor of Civil Beat, said a policy of requiring people to log in via Facebook before they post a comment has encouraged a less strident tone than at many news organisations. She declined to comment on the site’s finances.
Her boss has championed projects that might lead to more government transparency, Epler said. When her reporters ran up against a law exempting police from releasing internal disciplinary records, Omidyar created the Civil Beat Law Center, which is working to secure the release of those records. Another impetus for starting the centre was the demise of Hawaii’s shield law, which protects journalists from having to reveal anonymous sources, Epler said. It expired earlier this year.
Omidyar frequently drops by the newsroom, where he edits the occasional article, plays foosball and chats with staff. “He loves to talk stories,” Epler said. “And journalistic principles and ethics.”
The new venture puts Omidyar, 46, in the public eye after many years of relatively low-profile philanthropic and investment activities. While he has long supported efforts to promote transparency and accountability in government, including a local news website in his home state of Hawaii, Omidyar suggested that he is prepared to spend as much as Bezos did in buying the P o s t to take those efforts to a new level. “I want to find ways to convert mainstream readers into engaged citizens,” Omidyar wrote in a blog post. Omidyar’s new endeavour, as yet unnamed, will face myriad challenges. Established news organisations are struggling to find a viable financial model as print advertising and circulation plummet while online advertising dollars migrate to Google and to automated ad exchanges that drive prices down. He has yet to offer any clues about his business strategy. Media investments generally do not make good investments, said David Cowan, a partner at Bessemer Ventures. “I’m pretty sure Pierre doesn’t think that a news startup is the best way to get richer,” he said.
Hobby Horse Born in France to Iranian parents, Omidyar grew up largely in the Washington, DC area, with a stint in Hawaii. He graduated from Tufts University near Boston in 1988 with a degree in computer science, and moved to Silicon Valley. While working as a software engineer at then-hot personal-communications company General Magic, Omidyar came up with the idea for eBay in 1995 and worked on it as a hobby until it became big enough for him to quit his day job. When eBay went public three years later, the then 31-year-old Omidyar’s stake was valued at $611 million by the end of the trading day. He still owns almost 9% of the $70-billion company today, making him eBay’s top shareholder. Forbes pegs his wealth at $8.5 billion. Omidyar serves as eBay’s chairman, but has not been involved in its day-to-day operations for years. During the summer, Omidyar considered purchasing T h e Wa s h i n g t o n P o s t, he wrote in his blog. While the P o s t eventually sold to Bezos in August, the process “got me thinking about what kind of social impact could be created if a similar investment was made in something entirely new, built from the ground up,” he wrote. Those musings led to his latest project, which he is billing as “My Next Adventure in Journalism.”
Passionate about Journalism Omidyar Network, the investment firm founded by Omidyar and his wife, Pam, in 2004, has backed some 25 organisations dealing with news and government transparency, including News Trust, a news-discovery site run by the non-profit journalism centre the Poynter Institute; the Sunlight Foundation, a government-transparency nonprofit; and Transparency & Accountability Initiative, a Londonbased organisation. “Pierre gets journalism,” said John Temple, founding editor of Honolulu Civil Beat, the news site launched by Omidyar in 2010. “He’s passionate about it and knows how to create an environment and culture where journalists feel energised and empowered.” Omidyar’s comments on Twitter in recent months show an increasing discomfort with the workings of the US government. “There goes freedom of association,” he tweeted earlier this week, linking to an article in T h e Wa s h i n g t o n P o s t about the National Security Agency collecting email address books.
But in his Wednesday blog post, Omidyar emphasised his new endeavour would go beyond investigative reporting, and would “cover general interest news, with a core mission around supporting and empowering independent journalists across many sectors and beats.”
That broad approach makes sense, said Arianna Huffington, creator of the H u f f i n g t o n P o s t, which started an edition in Hawaii earlier this year through a partnership with Omidyar’s Civil Beat. “He wants this to be a business, and that’s not possible without having a site that’s about general news and everything that people are interested in,” H u f f i n g t o n said in an interview. “And for the conclusions of investigative journalism to have impact – and he wants to have impact – you have to capture the public imagination. If you have people coming to the site for other reasons, they are more likely to engage.”
Civil Beat To some extent, Omidyar seems to be shifting what he has been trying with Honolulu Civil Beat to a broader stage. Civil Beat aimed to create a new online journalism model with paid subscriptions and respectful comment threads. Patti Epler, current editor of Civil Beat, said a policy of requiring people to log in via Facebook before they post a comment has encouraged a less strident tone than at many news organisations. She declined to comment on the site’s finances.
Her boss has championed projects that might lead to more government transparency, Epler said. When her reporters ran up against a law exempting police from releasing internal disciplinary records, Omidyar created the Civil Beat Law Center, which is working to secure the release of those records. Another impetus for starting the centre was the demise of Hawaii’s shield law, which protects journalists from having to reveal anonymous sources, Epler said. It expired earlier this year.
Omidyar frequently drops by the newsroom, where he edits the occasional article, plays foosball and chats with staff. “He loves to talk stories,” Epler said. “And journalistic principles and ethics.”
Ref: ET, Washington post
