The Real Reason Behind the Bezos Acquisition of The Washington Post

I have just read once more that Jeff Bezos doesn't have a plan for his latest acquisition, The Washington Post.  Some journalists double-up on this statement by telling us that Boston Red Sox owner, John Henry, isn't sure what he is going to do with his purchase of The Boston Globe.

Let me tell you something, Bezos and Henry are two very smart guys, they may not know exactly every direction they are going to take their new acquisitions, but they very likely see dangling dollars for the taking.

That there isn't a newspaper writer out there that understands how big money thinkers view deals is nothing more than a sad commentary on journalists comprehension of the business world. It is highly unlikely that seasoned successful businessmen like Bezos and Henry are just taking wild swings in the dark.

For starters, depending upon the types of income Bezos and Henry have streaming into them, newspapers can provide a great way to shelter income from immediate taxes and push it into the far off future, because of how subscription acquisition costs are allowed to be recognized versus subscription income.

Second, Bezos and Henry likely see immediate ways to increase revenues that Post and Globe management just don't see. It's called superior entrepreneurship. In the past, I have been involved in the negotiations of acquisitions, where sellers were desperate to get rid of what they saw as losing operations, yet the buyer saw ways to significantly increase income immediately. The seller's albatross was a gold mine to the buyer.. It is really hard for me to believe that especially Bezos, given his superior knowledge of the internet,  doesn't see all kinds of way to increase revenues at WaPo. He may not know everything he is going to do with WaPo, but it is very likely he sees dangling revenue streams there for the taking.