Amazon.com Inc founder Jeff Bezos will buy the Washington Post newspaper for $250m in a surprise deal that ends the Graham family's 80 years of ownership and hands one of the country's most influential publications to the businessman whose Internet company has transformed retailing.
Bezos, hailed by many as technology visionary, called his acquisition a personal endeavour and reassured employees and readers of the 135-year-old newspaper he will preserve its journalistic tradition, while driving innovation.
The acquisition, the latest in a flurry of deals for print publications including the New York Times Co's sale of the Boston Globe for $70m, is a another sign of the unprecedented challenges newspapers face as advertising revenue and readership decline.
Shares of the Washington Post Co climbed more than 5% to $599.85 after hours - their highest level in almost five years.
Donald Graham, the chairman and CEO of the Washington Post Co, said in an interview that he and his niece Katharine Weymouth, the Post's publisher, made the decision to put the newspaper up for sale earlier this year after looking at its financial forecasts.
"For the first time in either of our lives we said to each other: is ownership by the Washington Post Co the best thing for the newspaper? We could keep it alive, that wasn't the issue. The issue was could we make it strong?"
Graham and Bezos discussed the deal at two meetings in Sun Valley, Idaho during the annual Allen & Co media and tech conference in July. The investment bank had been retained earlier in the year to gauge potential buyer interest, and is now the banker on the deal.
Graham's company had talked to no more than a dozen parties about selling the paper. He declined to name the other parties.
"I named a price and Jeff agreed to pay it," said Graham, who initially thought Bezos would be an unlikely buyer. "To my surprise, when (Allen & Co) said they would call him, I said that would be great but I didn't think he would be interested."
The investment bank ended up advising on the deal.
At a meeting in January, Graham said longtime friend and former Washington Post board member Warren Buffett referred to Bezos as the best CEO in the United States for his technology and business acumen.
"I asked Bezos why he wanted to do it and his reasons are the best ones: he believes in what newspapers do and what the Post does and that it's important to the country," Graham said.
The Amazon CEO took that message directly to employees in a letter posted on the newspaper's website.
"I understand the critical role the Post plays in Washington, DC and our nation, and the Post's values will not change," Bezos wrote in the letter.
