Amazon CEO Overpaid 5 Times the Price for Washington Post

Jeff Bezos

Next time you think you see a bargain at Amazon.com, remember it may just be because the site isn’t very good at figuring out that whole money thing.

Amazon posted a loss of 7 million last quarter and its CEO Jeff Bezos paid 200 million dollars too much for the Washington Post. But look at it from another angle, for the first time people are saying, “Oh Jeff Bezos” instead of “Who is that Jeff Bezos?”

Like Amazon’s losses, the Washington Post is a deeper long term investment. It buys Bezos a golden ticket into influencing national politics.

The founder of Amazon.com Inc. (AMZN) plunked down $250 million for the Post newspaper division, about 17 times adjusted profit, according to data compiled by Bloomberg.

“Bezos paid a friendship premium of $200 million here,” Ken Doctor [sic], a media analyst at Burlingame, California-based Outsell, said in a phone interview. “There are a handful of news brands in the world that will merit some kind of premium over the usual multiple, but the multiple over the multiple here seems really high.”

Not when the multiple is the US government. Bezos just bought himself a superlobby.

Last week, the Washington Post Co.—which owns Slate, which is not being sold as part of this deal—reported that in the the first six months of the year, its newspaper division saw an operating loss of $49 million. That was partly a result of increased severance expenses, but the newspaper division has been losing gobs of money for years: $54 million in 2012, $21 million in 2011, $10 million in 2010.

Ah but lobbying will have hidden profits.

  • SteveColorado

    This transaction is probably more political than business oriented. The mainstream left is quite concerned about losing, what they consider to be, a key communications platform like the Washington Post. For less than 1% of his reported $25 billion fortune, Bezos reaps a lot of good feeling from the Obama administration and the rest of the Democrat party establishment. Who knows, he might even make some money on the deal. It is reported that he will be compensated for past pension costs.

    Large company management has always paid attention to Washington. However, now with the Federal government increasingly micromanaging the economy, many business leaders, including Buffet, Bezos, and Zuckerberg are doing their best to be buddies with Obama and the Democrats. Bribery has taken a lot of creative forms lately. For example Cory Booker, Newark Mayor and ” a rising star” in the Democrat party, has had millions in start-up funding poured into a business that he supposedly runs in his spare time.His personal stake in the business is not worth over a million dollars. Illegal, probably not, but definitely a form of influence buying.