Five reasons Jeff Bezos wants the Washington Post

Local digital content as part of $250M deal could be 'huge,' one pundit says

1 2 3 Page 2
Page 2 of 3

The Wall Street Journal and New York Times have become successful international and national online newspapers, added Gottheil. "But their paywall is too high to make them really mass international papers," he said. "If Bezos lowers the paywall, there's an opportunity for him to become a major distributor of newspaper news."

The Post's content could cost subscribers less than the paper's rivals or be free with Amazon Prime, a subscription service.

Added Pexton: "Maybe Bezos will thinking about new kinds of paywalls or metered pay for digital. Still, the problem is that ads on mobile just don't bring in much revenue." Ad dollars derived from mobile bring in far less than ads on digital desktops or in print, he noted.

3. Bezos gets six local newspapers and related businesses in the deal, opening the door for revenues from local ads.

Local news is a big part of the $250 million deal, even though the Washington Post is seen as more of a national and international newspaper. In addition to the Post, Bezos gets the Express newspaper, the Gazette newspapers, South Maryland Newspapers, the Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.

Of note in the context of local content: Google, a major Amazon competitor, started on its "all news is local" theme in 2008 and has recently begun testing providing local news in its Google Now service.

Also of note: Investor Warren Buffet's decision last year to buy 26 local papers in 2012 could have influenced Bezos as well.

Said Gold: "Certainly, local news is important.... But the problem is that local news doesn't usually pay the bills. Papers have been cutting back on reporters covering local news. To do local news you have to have reporters scattered everywhere, so crowdsourcing is actually a more efficient way to do it, although it makes it harder to control quality."

If Bezos bought the Post for the local news, "it's going to be a tough way to pay the bills," Gold added, even as he noted it is still important to readers. "Like politics, at some level, all news is local news."

AOL started up Patch, a local online news service, about two years ago, but it has been a revenue loser, analysts noted. "Patch has not delivered here [in Washington] or anywhere else," Pexton noted. "If Bezos could figure local out, and innovate there, it could be huge."

Pexton said in his role as the Post's ombudsman until earlier this year he learned that activist readers in the Washington area often care as much about local politics and school board decisions as they do about national and international issues. "They're desperate for more [local] news," he said.

Gottheil said Bezos could well be highly interested in developing local content digitally to reap revenues and do something others haven't. "The full potential of local newspapers in electronic form has never been realized," Gottheil said. "Local papers have something that Google and national papers have not got, which is a local advertising [sales] force. Every pizza and cleaning shop could be a customer. Bezos would have to set up a network and skim profits, but Bezos is really smart and that's an interesting play."

1 2 3 Page 2
Page 2 of 3
  
Shop Tech Products at Amazon