Amazon.com Inc. founder Jeff Bezos will buy The Washington Post for $250 million in a surprise deal that ends the Graham family's 80-year ownership and hands one of the country's most influential publications to the tech entrepreneur.
Bezos, hailed by many as a visionary who helped transform Internet retail, called his acquisition a personal endeavor and reassured Post employees and readers that he will preserve the paper's journalistic tradition while driving innovation.
The acquisition, the latest in a flurry of recent media deals including The New York Times Co.'s sale of the Boston Globe for $70 million, is a further indication 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.
"I understand the critical role the Post plays in Washington, D.C., and our nation, and the Post's values will not change," Bezos said in a letter addressed to employees and published on the newspaper's website.
"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," he added. "We will need to invent, which means we will need to experiment."
Bezos, who has built Seattle-based Amazon.com into a shopping and online technology force over the last two decades, made a minor foray into media earlier this year with a small investment in Internet news site Business Insider.
The Washington Post, home to the Watergate scandal investigation team of Bob Woodward and Carl Bernstein, is among the rapidly dwindling number of U.S. newspapers with a profitable business, a function of the rapid migration of readers to Internet and other digital media sources.
Bezos will buy the Post along with other newspaper assets from the Washington Post Co. Amazon.com is to be kept separate from the Post deal, according to The Washington Post.
The deal comes on the heels of near-unprecedented media deal activity this year, including the Globe transaction announced just over the weekend.
Tribune Co., publisher of The Baltimore Sun, had been exploring a sale of its publishing assets, which also include the Chicago Tribune, Los Angeles Times and five other daily newspapers. But the company announced last month that it will spin off its newspapers as a separate company, keeping the television stations and real estate with the original company. Tribune also is adding to its broadcasting holdings with plans to buy 19 television stations.
The spinoff is expected to delay any potential sale of the newspapers.
The Sun has a content-sharing agreement with The Washington Post and subscribes to Washington Post News Service with Bloomberg News.
Donald Graham, the chairman and CEO of The Washington Post Co., started talking to Bezos less than a month before clinching the deal.
"I asked him 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 in a phone interview on Monday.
Graham said 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 said.
Washington Post Co. retained Allen & Co. to start gauging interest from potential buyers early this year. "We had conversations with no more than a dozen other parties," Graham said, declining to name anyone other Bezos.
Warren Buffett owns a slice of the Post's parent company, whose operating income has plummeted almost 40 percent since 2008, to $146.2 million in 2012.
"I doubt it is a financially oriented investment for him as much as a chance to play a more important role as a steward of an important public trust/asset," said James Barksdale, president of Atlanta investment firm Equity Investment Corp.
Barksdale said his firm did not own Washington Post shares because he thought they traded higher than he thought justified, "probably due to the Buffett halo," he added.
The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.yland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.