On what did Jeff Bezos base his decision to buy the Washington Post, one of the most recognizable newspapers in the world for $250 million? It’s a pretty big deal when you are willing to buy something, anything, for that much money. A lot of thinking and analysis had to be done, and a lot of important decisions made. In fact after initially being approached by the Post in March of 2013, Bezos didn’t communicate with them for two months, and Donald Graham, the owner of the Post, thought that he wasn’t interested in the deal any more. (Williams, 2013) What were the pros and cons of the massive deal? I will demonstrate what processes may have been used to come to the decision that was made and why. PrOACT Model
There are six criteria that are considered when making a decision using the PrOACT model. (Hammond J, 1999) Focusing on what is important, being logical, and being both subjective and objective in making your decision are among some of the important criteria I am referring to. One of the first things that Mr. Bezos had to come up with was what was important to him. He must have considered his values, his financial situation and that of the company he was going to buy. But the main decision problem in this case was obviously whether or not to buy the Washington Post. I should point out that Jeff Bezos bought the paper, not Amazon. He used his own money to purchase the legendary newspaper. So we must look at what his objectives may be in order to analyze what alternatives, and consequences he most likely considered.
Once he had formulated the correct decision problem, the next thing to do was specify what objectives he needed to meet. One predominant theme suggested in an article in the Christian Science Monitor concerning the sale is that Bezos purchase of the Post is a logical step in the growing presence of digital media in markets that were previously dominated by traditional media such as newspapers and television. (Goodale, 2013) There are many perks to owning a large well known company such as the Post, one being it’s larger than normal distribution. It is not just read in the Nation’s Capital, it is read all over the Country, and who wouldn’t want that kind of influence. Only Bezos will know what his objectives were regarding this decision but I would say that it was probable that a passion for reading and the power of the printed word may have played a role in his decision, or perhaps he just wants to be known as the guy who owns the Washington Post.
Once Bezos considered his objectives, I’m sure he had some alternatives to consider. Should he buy the failing newspaper, or maybe he should have considered buying another paper, or a different media company altogether. Maybe he considered not buying the paper at all, or perhaps going into a partnership with another investor or investors to purchase the paper. Or better yet, maybe as an alternative he could have considered starting up his own newspaper company. I mean he is a pioneer of the online retail industry, why think small? Your decision can be no better than your best alternative after all. (Hammond J, 1999) You have to wonder how many alternatives and decisions were being made during that two month period of no communication between Bezos and the Grahams.
Any smart business person would consider the consequences of a major decision they were about to make right? I mean who would spend $250 million dollars on something without considering the consequences of their actions. I think that may have been what Bezos would have been considering during the time he was silent. What were the possible consequences? Bezos said in an interview with the German Newspaper, Berliner Zeitung that “There is one thing I’m certain about: there won’t be printed newspapers in twenty years. Maybe as luxury items in some hotels that want to offer them as an extravagant service. Printed papers won’t be normal in twenty years.” (Ferenstein, 2012) As...
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Drehle, D. V. (2013). The Fixer. Time, 182(8), 14.
Ferenstein, G. (2012). Bezos In 2012: People Won’t Pay For News On The Web, Print Will Be Dead In 20 Years. Berliner-Zeitung.
Goodale, G. (2013, August 6). Washington Post sale sign respected brands will matter, even online. Retrieved August 13, 2013, from The Christian Science Monitor: http://www.csmonitor.com/USA/2013/0806/Washington-Post-sale-a-sign-respected-brands-will-matter-even-online-video
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