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August 09,2013

WASHINGTON — Amazon.com founder Jeff Bezos made news this week following reports that the Internet pioneer had purchased one of the nation’s top newspapers - The Washington Post. The newspaper has been losing money for years. Initial reaction to the $250-million deal has been mostly positive. The buyout is raising questions, however, about the future of the struggling newspaper industry.

He founded one of the world’s most profitable online companies. He has shaped the way consumers buy books. And now Bezos is poised to become the owner of one of the nation’s most influential papers.

Ken Doctor, the author of Newsonomics - about how digital trends are shaping the news - said the buyout marks a significant shift for newspapers, not just the Post.

Speaking via Skype, he said, “It raises on a high level, questions about the future of The New York Times. And this, of course, at the same time when Axel Springer [multi-media publisher] in Germany is getting out of the regional newspaper business. So we have a worldwide phenomenon - an earthquake really in the news business.”

That’s because what happens at the Post in the Bezos era is likely to set the pattern for other struggling newspapers.

One issue likely to come up is the role of unions and collective bargaining. Amazon often has seen unions as obstacles to innovation. Chris Tolles, CEO of the online news community Topix, said that Bezos is unlikely to run the Post, though, the way he runs Amazon.

“The fact that he made a personal investment is the interesting part here. It’s not that he was the founder of Amazon. But this seems to be his own thing. And it will be, I think it’s going to be, different than any of us can foresee in terms of how it goes on. I doubt it’s going to be just another arm of Amazon,” said Tolles.

Bezos, who has been described as libertarian in his views, has promised no radical changes at the Post - assuring staff that he would leave editorial politics and day-to-day operations to the professionals.

But on Skype, new media professor Paul Levinson says he’s not buying it. “It’s almost become a cliché that when a big corporation buys out some kind of media operation, whether it’s a newspaper or television operation - they always say the same thing - 'We’re going to keep our hands off the editorial policy, we’re going to allow the original editors to continue' - and invariably that never holds,” said Levinson.

For the Post to return to profitability, something has to give. Experts say Bezos either will have to bring in more revenue or cut costs.

Doctor said running a newspaper is not the same as running an online store. “What Bezos does with The Washington Post is a real open question. No experience as a media entrepreneur, no idea how thin-skinned he may be, or how he’s going to run that organization.”

Advertising accounts for up to 80 percent of newspaper revenue. While recent double-digit declines in print advertising have slowed, publishers continue downsizing newsrooms across the country as more people turn to online news.

Experts say what happens next at the 136-year old Washington Post either will signal the start of a new business model or the continuing decline of newspapers in the digital age.