EU Launches In-Depth Probe On Amazon Over Data Use

 

The EU’s powerful antitrust authority launched an in-depth investigation into Amazon on Wednesday, amid suspicions the US-based online behemoth misuses merchant data hosted on its website.

The formal investigation opens a new chapter in the European Union’s campaign to address the dominance of US tech firms with Google, Facebook and Apple also regular targets of regulators in Brussels.

With its probe, the EU competition watchdog is seeking to expand its oversight powers to data, the most prized asset for Silicon Valley giants that now dominate web-use worldwide.

“I have… decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer (and) to assess its compliance with EU competition rules,” the EU’s anti-trust commissioner Margrethe Vestager said in a statement.

At the heart of the case is Amazon’s service to third party merchants who use the world’s biggest online retailer to access customers and broaden their reach.

READ ALSO: US House Condemns Trump’s ‘Racist Comments’ On Congresswomen

In providing this service, Amazon “continuously collects data about the activity on its platform”, the commission said.

Preliminary findings, according to the statement, indicate that Amazon “appears to use competitively sensitive information — about marketplace sellers, their products and transactions on the marketplace.”

The opening of a formal investigation procedure does not prejudge its outcome, but if fault is found the sanctions by the EU can reach up to 10 percent of sales.

“The stakes for the digital economy are high, because any action by the Commission can have an impact on the business model of web giants, which is based on data accumulation,” said Andrea Collart, of the consulting firm Avisa in Brussels.

The investigation, which has no deadline, is likely to be the final offensive by Vestager against big tech before the end of her current mandate on October 31.

In an email to AFP, Amazon said: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”

The probe adds to Vestager’s long list of cases against US Big Tech.

During her five-year term, Brussels has slapped Google with a combined $9.5 billion in antitrust fines and scrutinised Apple and Facebook for breaches of competition, tax and data rules.

Amazon in 2017 was ordered to pay back taxes of about 250 million euros to Luxembourg because of illegal tax breaks.

The company also settled with Brussels over its distribution deals with e-book publishers in Europe.

Amazon Rakes In $2.9Bn Profit

 

Amazon reported Thursday that its profit in the recently-ended quarter rocketed to $2.9 billion in a ten-fold increase from the same period last year.

Net sales at the e-commerce colossus climbed to $56.6 billion in the third quarter, a 29 per cent increase from the $43.7 in sales reported in the third quarter in 2017.

AFP

Amazon Opens New ‘4-Star’ Retail Store In New York

 

 

Amazon opens a new retail store in New York on Thursday selling a range of products from the online colossus that gets top ratings from customers.

The brick-and-mortar outlet in New York’s trendy Soho neighborhood will sell consumer electronics, kitchen, home, toys, books, and games, and “chose only the products that customers have rated 4 stars and above, or are top sellers, or are new and trending,” Amazon said in a statement.

Amazon has previously opened physical stores that sell books and has had pop-up outlets in some locations, but Amazon 4-Star is a new concept that offers a variety of goods in different categories.

“We created Amazon 4-Star to be a place where customers can discover products they will love,” a company statement said.

“Amazon 4-Star’s selection is a direct reflection of our customers — what they’re buying and what they’re loving.”

Amazon, one of the world’s most valuable companies whose growth has made founder Jeff Bezos the world’s richest person, has been in recent years moving increasingly to physical stores.

It has opened more than a dozen Amazon Books stores that sell top-selling titles and some additional merchandise. And it has acquired the grocery chain Whole Foods, which has several hundred stores.

Amazon has also introduced a handful of concept Amazon Go grocery stores that operate without cashiers, with purchases automatically scanned and billed to customer accounts.

AFP

Amazon Boss Calls Trump’s Attacks On Media ‘Dangerous’

 CEO and founder of Amazon Jeff Bezos participates in a discussion during a Milestone Celebration dinner September 13, 2018. PHOTO: ALEX WONG / GETTY IMAGES NORTH AMERICA / AFP

 

 

Jeff Bezos, the founder of Amazon and owner of the Washington Post newspaper, warned Thursday that President Donald Trump’s attacks on media are dangerous for the country.

Bezos, during a question-answer session at a dinner hosted by the Economic Club of Washington, said Trump’s attacks risk eroding protections and social norms important to democracy.

“It’s dangerous to demonize the media,” Bezos said.

“It’s dangerous to call the media lowlifes. It’s dangerous to say they are the enemy of the people.”

He added that “we live in a society where it’s not just the laws of the land that protect us… it’s also the social norms that protect us. It works because we believe the words on that piece of paper.”

Bezos said Trump and other public figures should expect public and media scrutiny, which he called “healthy.”

The comments appeared to be the first direct, public rebuke of Trump by Bezos, a frequent target of attacks by the president.

“I do defend the Post,” he said. “I don’t feel the need to defend Amazon.”

But he paraphrased Washington Post editor Martin Baron as saying that “the administration may be at war with us, but we are not at war with the administration.”

Despite his concerns with Trump, Bezos said that he was not overly concerned about the future of the news media.

“We are so robust in this country. The media is going to be fine,” he said during the conversation with economic club president David Rubenstein.

Bezos, whose Amazon fortune has made him the world’s richest person, added that he has had “a couple of conversations” with Trump but declined to say what was discussed.

AFP

Amazon’s Jeff Bezos Unveils $2bn Philanthropic Fund

Jeff Bezos                                                                                                                                            Photo: AFP

 

Amazon founder Jeff Bezos, the richest person on the planet, said on Thursday he was creating a philanthropic fund to help homeless families and launch preschools in low-income communities, committing an initial $2 billion to the cause.

Bezos made the announcement on Twitter a year after asking for ideas on how he could use his personal fortune — now estimated at more than $160 billion — for charitable efforts.

The “Bezos Day One Fund” created by Bezos and his wife MacKenzie will focus on two areas: helping “existing nonprofits that help homeless families” and funding “a network of new, nonprofit, tier-one preschools in low-income communities,” he wrote.

For the homeless, grants will be given to organizations “doing compassionate, needle-moving work to provide shelter and hunger support to address the needs of young families,” Bezos said.

The fund will also seek to launch and operate “a network of high-quality, full-scholarship, Montessori-inspired preschools in underserved communities,” he wrote.

“We will build an organization to directly operate these schools.”

Bezos said the schools would “use the same set of principles that have driven Amazon” and that “the child will be the customer.”

Early steps on charity

The $2 billion initiative, while significant, is far less than the philanthropic efforts of other billionaires including Microsoft’s Bill Gates, who has donated tens of billions to his foundation, and Facebook’s Mark Zuckerberg, who has pledged to donate 99 percent of his shares in the social media giant to an organization focused on public good.

It also falls short of the “giving pledge” initiative launched by Gates and billionaire investor Warren Buffett, who have encouraged wealthy individuals to pledge half their fortunes for philanthropy.

Bezos’s fortune comes mainly from his stake in Amazon, the diversified online firm which briefly hit $1 trillion in market value this month and is the second most valuable company after Apple.

He also operates the private space exploration firm Blue Origin and owns The Washington Post newspaper.

Despite his fortune, Bezos has not been a major philanthropic donor and Amazon has been criticised in its home of Seattle, Washington, for doing little to address problems of the growing homeless population.

Last year, he donated $33 million to fund scholarship for “dreamers,” the name given to undocumented children of immigrants who face legal obstacles in attending college or university.

He has also made donations for cancer research and to Princeton University, his alma mater.

Amazon’s tentacles

Bezos’s personal wealth has soared with the value of Amazon, whose stock price has doubled over the past year with its expansion into new sectors and geographies.

Launched in 1994 as an online bookseller, Amazon has become a retail powerhouse operating globally and has expanded into streaming video, music, cloud computing, and other segments, and last year acquired the Whole Foods grocery chain. Amazon’s digital assistant Alexa has helped drive its hardware sales and is used on smart devices ranging from cars to refrigerators.

According to the research firm eMarketer, Amazon’s e-commerce revenue will grow more than 28 percent this year to reach $394 billion, and will account for 49 percent of US online retail sales and nearly five percent of all retail spending.

Some analysts have suggested Amazon could face antitrust scrutiny over its growing power in the economy, and President Donald Trump has accused the company of taking advantage of the Postal Service, despite studies suggesting the internet giant’s deal has been beneficial to the US government postal operator.

Amazon has faced criticism for paying little in taxes, which stems in part from its historically low profits.

It has also won tax breaks in many areas for its warehouses and distribution centers, and has been running a highly publicized effort for a second North American headquarters, prompting proposals for tax reductions and incentives.

Amazon has selected 20 cities as “finalists” for the headquarters and has indicated it would make a decision by year-end.

AFP

Amazon Goes From Books To A Trillion-Dollar Valuation

 

Amazon’s journey from an online bookseller started in a garage to a global e-commerce powerhouse valued at a trillion dollars has centered on obsession with the long road.

The company initially incorporated as “Cadabra” by Jeff Bezos in 1994 and backed with money borrowed from his parents joined Apple as the second US technology firm to be valued at $1 trillion on Tuesday.

“It’s funny comparing Apple and Amazon because they are very different companies,” said independent technology analyst Rob Enderle.

“Apple is basically a one product company nowadays; Amazon is anything but.”

While Apple makes most of its money from iPhones, the Amazon empire includes global e-commerce operations, cloud computing, artificial intelligence, streaming television, groceries and more.

Created in a garage in a suburb of Seattle, Washington, the company renamed “Amazon” sold its first book — Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought by Douglas Hofstadter — to a computer engineer in mid-1995.

By the end of that year, Amazon was selling books online throughout the US. Amazon went public in early 1997.

The company for more than a decade put growth over profit, investing heavily in warehouses, distribution networks, and data centers.

“Every cent they made they put back in the company,” Enderle said of Amazon.

“They kept their eye on the prize, which was initially to take over most of commerce.”

 

Innovation sans Scandal

Neil Saunders of the research firm GlobalData said Amazon’s success comes from the fact that it innovates unlike any other.

“This heady pace of creativity is the key reason why it stays several steps ahead of the market and is able to generate so much growth,” Saunders said.

Bezos has kept firm control of Amazon, steering clear of hedge fund investors inclined to short-term tactics aimed at getting share prices to jump.

The founder and chief executive also avoided scandals or other distractions, keeping revenue and costs close enough to manage and easing into “adjacent markets” that play into Amazon strengths or interests, according to Enderle.

For example, Amazon Web Services cloud computing business is a lucrative business built on technology infrastructure that the company needed to run its own operations.

Investing in warehouses, trucking, drones, shipping and other distribution systems not only enables Amazon to drive down costs they position the company to compete with the likes of FedEx and UPS.

Buying Whole Foods grocery chain last year got Amazon established real world outlets while putting its delivery and retail smarts and systems to work in the brick-and-mortar world.

 

Drugs and digital ads

 

Prescription medicine would be a natural market for Amazon to expand into, according to Enderle Meanwhile, Amazon is reportedly beefing up its digital advertising business to better compete in an online ad market dominated by Google and Facebook.

In the past quarter, Amazon posted its best-ever profit of $2.5 billion as Bezos, whose Amazon stake has made him the world’s richest person, highlighted the importance of the digital assistant Alexa that powers Amazon electronics along with cars, appliances and other connected devices.

According to the research firm eMarketer, Amazon’s e-commerce revenue will grow more than 28 percent this year to reach $394 billion, and will account for 49 percent of US online retail sales and nearly five percent of all retail spending.

One of Amazon’s revenue drivers is its Prime subscription service which offers streaming video and music, free delivery and other perks and which has more than 100 million members worldwide.

 

Arrogance trap

 

Some fear Amazon is becoming too dominant a force, especially in retail, sparking antitrust discussion even as the company keeps expanding globally and searches for a second headquarters in North America.

“It wasn’t that long ago that people were freaking out about Walmart, and Amazon basically stepped on Walmart,” analyst Enderle said.

“What Amazon means is disruption and people don’t like to be disrupted.”

Critics of the company include US President Donald Trump, who has expressed ire at the Bezos-owned Washington Post newspaper that has published stories the president didn’t like.

Bezos bought the Washington Post five years ago for $250 million from his personal funds.

While it made sense that his skills could be advantageous in the content-oriented news business may make sense, it came with the risk of displeased politicians using their power against the company.

“The Post was a mistake because it results in him going to war with people he wouldn’t otherwise go to war with,” Enderle said.

“You really don’t want to go to war with the government.”

Amazon’s huge cloud computing segment powers systems for government clients, and contracts could be influenced by politics.

Amazon must also guard against the kind of arrogance that can undo companies that come to dominate markets, according to the analyst.

“When companies get big, it starts being about what you have the power to do and now what is right to do,” Enderle said.

“If Amazon does have a downfall, it will be arrogance in dealing with the customer.”

Trump Targets Amazon Again In New Tweets

FILE PHOTO United States’ President, Donald Trump 
JEFF SWENSEN / GETTY IMAGES NORTH AMERICA / AFP

 

United States’ President Donald Trump on Saturday resumed his attacks against online retailing giant Amazon and accused The Washington Post, owned by Amazon’s founder Jeff Bezos, of lobbying for the company.

His latest comments, two days after a similar swipe against Amazon, coincided with a report in Saturday’s Post about three different legal efforts “trying to pry open” the books of the president’s umbrella company, the Trump Organization.

On Twitter, Trump claimed the US Postal Service loses “billions of dollars” delivering packages for Amazon.

“This Post Office scam must stop. Amazon must pay real costs (and taxes) now!”, he wrote.

For the first quarter of the 2018 financial year, the US Postal Service reported “strong package growth,” with revenue in the segment up 9.3 percent from the same period last year to $505 million.

That did not offset the fall of $557 million in first-class and marketing mail revenue, the post office said.

Trump further alleged Saturday that Amazon’s lobbying staff “does not include the Fake Washington Post,” and said the Post should register as an official lobbyist.

The Post report on Saturday referred to Special Counsel Robert Mueller’s reported subpoena of Trump Organization documents related to Russia.

Mueller is probing whether there was collusion between Trump’s 2016 election campaign and Moscow, as well as possible obstruction of justice.

The newspaper also reported that a lawsuit filed by porn actress Stormy Daniels over an alleged a sexual encounter with Trump has brought additional scrutiny to the Trump Organization.

Finally, it mentioned the District of Columbia and State of Maryland’s suing of Trump over allegations that his “financial entanglements” violate the Constitution.

Trump is spending Easter weekend at his Mar-a-Lago estate in Florida. He sent his latest tweets while in a motorcade on the way to his Trump International Golf Club.

On Thursday the president tweeted that Amazon uses the post office as its “delivery boy” and alleged that the firm pays “little or no taxes” to state and local governments.

The comments renewed concerns that Amazon could face scrutiny by antitrust regulators.

A day earlier, a report on the Axios news site said Trump’s wealthy friends complain that Amazon is killing shopping malls and brick-and-mortar retailers, and had asked about the possibility of going after the firm using antitrust laws.

AFP

Television Titans Prepare To Battle Internet Rivals

 

Corporate headquarters of Comcast, the United States’ biggest cable television and Internet provider on JFK Boulevard in downtown Philadelphia on February 23, 2014. Dave Clark / AFP

 

Traditional television titans are bulking up in a battle with online streaming giants Netflix and Amazon as viewers take to binging on shows when and where they want.

The latest evidence was the surprise move this week by US cable giant Comcast to outbid Rupert Murdoch’s 21st Century Fox for pan-European satellite TV group Sky with an all-cash offer valued at more than $31 billion (25 billion Euros).

The twist comes after Britain’s competition regulator provisionally ruled that Fox’s offer was “not in the public interest”.

In 2016, 21st Century Fox bid for the nearly two-thirds of Sky it does not own — but a full-takeover had been held up by UK government concerns.

Maneuvering has accelerated in the sector, which is being transformed by Silicon Valley technology that enables viewers to stream shows on-demand to a broad array of internet-linked devices.

Content is critical ammunition, with Netflix and Amazon pouring massive amounts of money into ‘original’ programming and licensing deals with the backing of shareholders who have seen the companies values’ soar.

Meanwhile, YouTube cultivates armies of ‘creators’ who upload videos to the platform with the potential to share in advertising revenue.

The Google-owned online video venue also has a subscription service called YouTube Red, which also features original content.

Acquiring content makers has become a go-to tactic for traditional actors in the television and cable sector, where they are under pressure to replicate success of disruptive newcomers.

Pivotal Research Group analyst Brian Wieser was among those who expected the content market to become more consolidated, especially as large US companies bring home large amounts of spending money from overseas due to recent tax reform.

Who’s courting whom?

AT&T wants to merge with Time Warner (HBO, Cartoon Network, Warner Brothers Studio, CNN) in an $85.4 billion deal.

Already the owner of DirecTV satellite group, AT&T would add significant muscle in the distribution and production of shows.

The catalog AT&T would gain from the merger would be impressive, from hit shows “Game of Thrones” and “Big Little Lies” to popular channels such as TNT, TBS, and CNN, seen as a perpetual source of global news.

The content could also be used to entice people to subscribe to AT&T mobile phone plans.

An obstacle in the path of the merger is the US Department of Justice, which opposes the deal on anti-trust grounds.

A trial in the matter is slated to begin in the middle of March.

Meanwhile, a Walt Disney Co. bid for much of the film and television assets of 21st Century Fox could help make the streaming platform Hulu a legitimate rival to Netflix.

The proposed multi-billion-dollar deal has drawn attention for potentially turning over to Disney another major Hollywood studio and key television operations in the US and overseas.

But if streaming video represents the future, Hulu could be the key.

Created in 2008, Hulu has garnered comparatively little attention as the number three streaming platform in the US market, behind Netflix and Amazon.

Hulu was created by the major broadcast operators to counter the growing influence of Netflix. But Hulu’s structure has been a handicap. Disney Fox and Comcast’s NBCUniversal each own 30 percent, with Time Warner holding the remaining 10 percent.

The Disney transaction would exclude popular, conservative Fox TV channel and sports stations as well as its newspapers, notably the Wall Street Journal and New York Post.

Sky and its 23 million customers represent an opportunity for Disney to strengthen its presence in Europe. It also offers a streaming service (Now TV).

Apart from its catalog of films, Disney does not offer much other content outside the US.

Ballet

Comcast already owns NBC, NBC Sports, MSNBC and CNBC, E !, Telemundo, Xfinity (cable and internet), and Universal (Dreamworks).

The company was valued just above $168 billion based on the price of shares on the Nasdaq exchange on Wednesday.

Other media firms in this ballet include Viacom and CBS. Both properties of media mogul Sumner Redstone, the two companies plan to merge.

Such a transaction would bring under one roof Paramount movie studio, CBS, MTV, Comedy Central, Nickelodeon, and BET.

The merger would reconstitute the group as it existed before Viacom became a separate entity on the stock market in 2006. Even if they are not yet in the dance, others in the sector could step in — like US telecom firm Verizon and leading social network Facebook, which has made video a priority.

AFP

France, Germany To Propose New Tax On Internet Giants

France and Germany plan to issue a new proposal to tax internet giants so that they pay a “fair contribution” in every country where they earn money, French finance minister Bruno Le Maire said on Sunday.

“We will unveil a new plan along with our German partners at the next finance ministers’ meeting in Tallinn in mid-September” for taxing technology giants including Google, Apple, Facebook and Amazon, Le Maire said in a Facebook Live chat.

“We propose taking the revenues of these large companies as a reference point, and use this to determine a tax level so that these companies pay what they should to the treasuries of every country where they make money,” he said.

He acknowledged, however, that similar proposals had already been made at an EU level as well as for the OECD group of developed economies, without success.

“For now, these talks have stalled,” Le Maire said.

The internet companies have come under fire in Europe for using complex fiscal arrangements to declare profits in countries with the lowest tax rates, even when they are earned elsewhere in the bloc.

Le Maire’s comments come after Google recently escaped a 1.115 billion euro ($1.33 billion) tax bill sought by the French treasury after a court ruled that the US company’s Irish subsidiary was not taxable in France.

French President Emmanuel Macron promised to get tough on US internet giants during his election campaign, seeing their low tax rates as a source of resentment about globalisation and as unfair for European companies.

AFP

Amazon Takes On Alibaba, Launches Prime Now Service In Singapore

A clash of the e-commerce titans in Southeast Asia, with Amazon launching its 2-hour express delivery service Prime Now in Singapore on Thursday, putting itself in direct competition with Chinese giant Alibaba for the very first time.

The move to the tiny, but wealthy, the city has been hotly anticipated.

Amazon has largely sidestepped China, but Singapore is seen as a gateway to Southeast Asia’s 600 million people who only do a fraction of their buying online.

Industry experts are bracing for a fierce battle as the two go head-to-head.

Alibaba already has a presence in the region, recently upping its stake in Lazada, an e-commerce firm with a foothold in six Southeast Asian countries.

Analysts expect Amazon to roll out services in major cities across the region in the next six months. But while it has the money and technical knowledge to challenge Alibaba, setting up shop won’t be easy.

As well as various regulatory hurdles, Amazon will have to find a way around logistical barriers, like the huge number of islands that make up the Philippines, or Jakarta’s paralyzing traffic. Not to mention poor internet connections across the region.

Nigeria’s Economy Is A Reverse Of What Is Obtainable Globally- Economist

A lecturer from the Pan Atlantic University, Dr Austin Nweze today (Thursday) described Nigeria’s economy as the “reverse” of what is obtainable in other parts of the world.

Commenting on the increase of price on products and services during the Christmas period, Dr Nweze recounted his time as a student in Canada where “Christmas time is the best time to get things cheap; really really cheap”.

He said that there were usually so many discount, as “so many items are discounted just for the period” insisting that the end of the year should be “the best time to shop”.

He noted that in such climes, the Christmas period is regarded as “spending time” after saving from January to November period, which is regarded as “saving time”. He added that “even the stock exchanges feel the impact of the expenditures that go on during Christmas”.

He went on berating the discount tactic employed by retail and wholesale marketers in Nigeria.

“They will pretend to give discounts, but what they usually do is to increase the price first of all, and then (maybe) return it to a normal level or higher than the normal” maintaining that ‘’it is not supposed to be”.

Noting that a service economy is imperative, he berated the low impact manufacturing has made to the Nigerian economy which he pegged at 2.4 to 3 per cent compared to the United States of America’s 80 per cent.

Dr Nweze, quoting statistics from the International Trade Centre, said that by 2050, 80 per cent of the minimum global work force would be in services, which means “that you have to move from production to service” adding that “even when you are producing, you are also providing service; they work hand in hand”.

He further noted that Nigerians do not produce, he said “we consume too much” because “nobody is thinking of producing anything here,” a situation which he said also “extends to policy making”.

He advised policy makers to stop indulging in the habit of making policies that would not benefit the people because of the mode of operation used in implementing the policy. He said: “they make policies to encourage businesses, but they use the other hand to collect it back through interest rates”.

He said that if given the opportunity to run the economy, he would not “worry about inflation” but he would “make sure that the productive capacity of the nation; businesses are producing at the optimal level”.

He further said that he would look at other areas in the country and put in place a “factor-endowed based development strategy” to see what could be done to encourage production and manufacturing.

Amazon’s Founder to Buy The Washington Post For $250 Million

Amazon.com Inc founder Jeff Bezos will buy the Washington Post newspaper for $250 million 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 endeavor 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 $70 million, 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 percent 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.

“There will of course be change at the Post over the coming years. That’s essential and would have happened with or without new ownership,” Bezos added. “We will need to invent, which means we will need to experiment.”

In addition to the newspaper, Bezos gets other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.

The real estate, including the paper’s headquarters business and online news sites such as Slate, will remain with the Washington Post Co. And the paper’s operations will be kept separate from Amazon.com, according to the Washington Post.

TOUGH TIMES

The Washington Post is the seventh largest daily in the United States and was where journalists Bob Woodward and Carl Bernstein broke the “Watergate” story which led to the resignation of President Richard Nixon in 1974.

While its legend and status loomed large, the Washington Post represents only a fraction of the company which has expanded into a stable of holdings, including education and health care services and most recently an industrial supplier. The collection of companies that make up the Washington Post is akin to that of Warren Buffett’s Berkshire Hathaway Inc, which owns disparate businesses from railroads to underwear as well as a stake in the Post.

And yet, the Washington Post suffers from the same hurdles besieging big city newspapers across the United States. The company’s newspaper division reported an operating loss of $49.3 million for the six months ending June compared to a loss of $33.2 million during the same period last year.

Weymouth, who will continue to serve as the paper’s CEO and publisher after the sale, told Reuters she did not think there was a “magic bullet” to resolving the problems. But the resources Bezos brought to the table were a plus.

“He’s smart and innovative and has access to a lot of smart people,” she said.

Bezos, who has built Seattle-based Amazon.com into a shopping and online technology force over the last two decades, made a small foray into media earlier this year with an investment in Internet news site Business Insider.

Bezos is the world’s 19th richest person with a fortune of $25.2 billion, according to Forbes magazine. His investment vehicle, Bezos Expeditions, is invested in a number of companies including Twitter and Business Insider.

His major personal project is called Blue Origin, which aims to be one of the first non-government funded ventures to send people and cargo into space, potentially winning lucrative contracts that were once fulfilled by NASA.

Bezos has already spent millions of dollars on this project, with millions more in the pipeline.

He did not elaborate in great detail on his motivations behind his latest deal, which caught many industry watchers by surprise. He does not play a prominent role in politics but has been described by friends as holding libertarian views. He and his wife did make public a $2.5 million contribution to a Washington state campaign to legalize same-sex marriage last year.

The deal comes on the heels of near-unprecedented media deal activity this year, with the Globe transaction announced just over the weekend, News Corp spinning out its newspapers, and the Tribune Co hiving off its publishing business like the Los Angeles Times and Chicago Tribune from its broadcasting division.

Free of its print assets, the Washington Post could continue to snap up other properties that align with the six TV stations in cities like Houston, Washington DC and Miami and cable TV services in more than a dozen states.

“It will be interesting to see, is this the first step in the transformation of the business?” said John Miller, senior vice president at Chicago’s Ariel Investments, a top-10 investor in the Washington Post. “The board is making the right decision. They obviously felt like it was a good deal. It will be interesting to see how they allocate capital going forward.”