Don Pittis: Amazon's Bezos may be best hope for ailing newspaper business

On Tuesday night, U.S. President Barack Obama went on The Tonight Show and talked policy. He and his public relations team know that if you want to get a message out unfiltered, it is good to bypass the newspapers and go straight to a popular audience.

While some might say this is just more evidence of the growing irrelevance of old-fashioned printed newspapers, I say it shows the opposite. We may not need newspapersas in physical chunks of chopped-up treebut the newspaper function is essential.

Enter Amazon.com founder Jeff Bezos, coughing up some of his pocket change to buy the Washington Post. Everyone is asking what he's got up his sleeve.

Bezos is a brilliant but controlling boss worth something over $23 billion, according to the Forbes Rich List, which was published in March. A look at Amazon's share price shows that his fortune has grown enough since March alone for him to buy several Washington Posts.

As many analysts have said, Bezos is not the kind of guy to get into a project like rebuilding one of the world's most influential newspapers without a plan. But if he has a plan, he's not sharing much of it so far.

Inspires confidence

Nor is he sharing the eventual benefits. Because the first strategy the Amazon boss enacted in his scheme to turn the Washington Post around was to fire the shareholders. He bought the company outright using $250 million of his own personal fortune.

So long as shareholders are left sitting on the sidelines, maybe Bezos has a chance. Shareholders are an impatient lot, and preparing the Washington Post for a successful future is a long game. And when I say Washington Post, read "the newspaper industry."

Bezos is one of those guys who inspires confidence that he could make just about anything work. Despite his success as the head of online retailer Amazon, he is no one-trick nerd. He reminds you of Michael Bloomberg, the safe pair of hands who smoothly transferred his skills creating a global financial news wire service to running New York City.

Having deep enough pockets is Bezos's second winning strategy. Despite a decade of declarations that the era of the newspaper is over, very few of the great titles have disappeared. Others have also found white knights, like Boston Red Sox owner John Henry's successful $70-millionbid forthe Boston Globe. That doesn't mean the shakeout is over.

The people who prefer their news on printed sheets are literally dying out. A quick poll of my office shows that the affection for newsprint is virtually extinct among the young. And these are well-informed people in the news business.

Ten years ago, creating online editions seemed the radical solution, but it wasn't enough. As I have demonstrated previously, in a world full offree online sources, the model for how to make the news business pay for itself is under reconstruction.

Brand value

Famous names like the Washington Post and New York Times, as well as the Globe and Mail and La Presse in Canada, have a brand value and a large remnant of audience loyalty that may see them through difficult times. But it is unlikely that all the functioning daily papers that exist today will continue to exist 10 years from now.

I say "functioning" because there are already many newspapers that only exist in the same way as the aggregator sites that provide little more than trite commentary and repackaged news recycled from other sources. Cute or horrible tales about tots halfway round the world, who is divorcing whom in Hollywoodthese are their staples.

But that is not what makes daily newspapers crucial. That is not why presidents go on late-night talk shows to avoid them.

The critical function of the great daily papers has not yet been replaced. It consists of the infrastructure of a large newsroom staffed by smart, specialist "beat" reporters who can understand, analyze and hold governments to account.

It is the institutional clout and credibility to stand up to governments and to business. It is obvious to anyone who understands how the political process works that these institutions are worth their weight in gold to society and are essential to democracy.

The existing model to capture this value has collapsed and the system to replace it is still in development. Jeff Bezos may have his own agenda, but that's been the case with newspaper owners throughout the ages.

Bezosis politically engaged, a believer in democracy and a guy who can make complex systems work. He will be able to leverage the skills and technological innovations he used to transform shopping and apply them to news.

And he knows how to make money. That is important, because a newspaper running on charity will only last till the charity runs out.

Until Michael Bloomberg buys the New York Times, Bezos may the best hope yet for a newspaper industry in transition.