What now for the WashPo?

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I guess that most normal people, upon learning that Jeff Bezos has bought the Washington Post, will just shrug and move on. For folks in the universe that I inhabit, in contrast, it’s a really intriguing development. This is the first time that someone who really understands the digital world has acquired a leading newspaper. So this story is not just about the future of a single US paper. It may have useful lessons for the entire industry. The shrewdest comments on the development that I’ve seen so far come from the Reuters columnist, Jack Shafer. Here’s an extract:

In acquiring the Washington Post, Bezos enters a business that is not radically different from the ones he already owns. Reporters and editors like to think their literary arts are central to newspapering. But it’s better to think of a newspaper as a coordination problem that manufacturing and distribution solves daily: Copy, art, and advertising is beamed from newsroom to printing plant, bundled newspapers flow from the plant to trucks, are transferred to carriers, and are delivered to your front door. Nobody knows more about deadline deliveries and distribution than Bezos’s Amazon, which has spoiled several nations with its reliable service. I can’t imagine what plans Bezos has for the print edition of the paper—if I did, I’d be worth $25.2 billion—but I’m confident that he will maximize the value of the existing Post delivery system in novel ways. It would not surprise me to see him use the Post network of trucks and carriers to enter the local delivery business as a pilot project. Obviously, he’s learned a lot from same-day delivery he could share with the paper.

Although most of us think of Amazon as a retailer, the computer sector has long regarded it as a tech company, competing with IBM, Microsoft, Google, and others as a seller of “cloud” computing power through its Amazon Web Services subsidiary. It’s also a computer devices company, via its Kindle readers. The sort of computer resources and ingenuity Bezos can bring to the Post—or more properly the washingtonpost.com—rival that of almost every other regional purveyor of news, entertainment, communications, and advertising. Any competing web property, cable systems, mobile phone system, or broadcasting operation in the Washington area should be on notice: Bezos means to use this foothold to go after the most lucrative parts of your businesses in the one of the richest corners of the country. He’ll spend you to death.

LATER: Another good piece — this time from Emily Bell. Excerpt:

At the end of a week that saw the Boston Globe sold for $70m by the New York Times Company, to Red Sox owner John W Henry, it seems that the lock gates transferring newspapers from a gilded past, through an unsustainable present, to to an unknown future have creaked open. Newspapers are now restored to their former status as playthings of the rich, rather than market-driven profit centers.

Even more interesting, perhaps, is the transmission of west coast wealth to the crisis-torn content economy of old-fashioned east coast influence factories. The cultural divide between the thought processes of the engineering-oriented Silicon Valley and the words-based elites of the East, in politics and media, is vast. The low esteem in which each holds the other is often breathtaking to observe.

It was a “no contest” contest, an unfair fight, in which the new economy of the west coast understood how to build relationships with people, sell them what they wanted, charm the stock market – and do it at a scale and speed that could not be matched by analogue businesses.

This is what Bezos has been best at, and his enforcement of a cost-cutting regime has found Amazon on the wrong end of newspaper articles about its workplace practices. Bezos is more personally successful in Silicon Valley than most of his peers, with a fortune of $28bn, but from a background that has brushed more with the world outside Palo Alto. He was a Princeton computer science graduate rather than a Stanford PhD; he worked on Wall Street for a while before heading west and founding Amazon; he has made his vast fortune by shipping books, and tangible objects, atoms rather than bits and bytes. And he has successfully monetised the act of charging people for words on electronic devices, through the Kindle.

STILL LATER: A really good sceptical piece from John Cassidy of the New Yorker:

I have a nagging, if possibly unfounded, suspicion that his primary motivation in buying the Post is to protect Amazon’s interests in the political battle, which is sure to come, over the company’s monopolistic tendencies. Why do I suspect that? In part, because I am a skeptic. But also because it’s just about the only explanation that makes sense.

For the past fifteen years, Internet companies like Amazon, Google, and Facebook have been rightly lionized as triumphs of American entrepreneurship. As the Web matures, though, they are gradually coming to be viewed in a different light, as quasi-monopolies that need at least a modicum of oversight. Because of the presence of network effects and other sources of increasing returns to scale, there is a natural tendency for successful online companies to increase market share and, eventually, to dominate a specific market. Google dominates search and, through You Tube, it also dominates online video. Facebook dominates social networking and, through Instagram, microblogging. And Amazon dominates online retailing.

Any monopoly position in the market comes with the capacity for abuse. And behind Bezos’s public image as a smiling geek there is a ruthless business strategist. In the book market, Amazon has followed the classic monopolist’s script of cutting prices to build up its market share and eliminate competition. Now that its competitors are struggling or gone, there is some evidence Amazon is raising prices, although the company denies this. In other areas, too, the online retailer has thrown its weight around like an old-fashioned monopolist. As Amazon expanded across the country, it has sought to avoid collecting and paying sales taxes on the goods that it sells, thus preserving an unfair price advantage over brick-and-mortar competitors. (For more on this, see the recent cover story in Fortune “AMAZON’S (NOT SO SECRET) WAR ON TAXES.”)

At this stage, one of the main threats to the fortunes of companies like Amazon, Google, and Facebook comes not from potential competitors but, rather, from the political authorities that are gradually awakening to their market power. Google’s search business has faced antitrust investigations in the United States and Europe. The Justice Department’s competition arm is moving to regulate Apple’s iTunes store. And Facebook and other online companies are facing questions about how they protect the privacy of their users.

So far, Amazon has gotten off easy.

Jeff Bezos’s letter to Washington Post employees

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This could be really interesting. Jeff Bezos has bought the Washington Post as a personal — not an Amazon — purchase. His letter to employees suggests that he understands what’s at stake. Sample:

The values of The Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners. We will continue to follow the truth wherever it leads, and we’ll work hard not to make mistakes. When we do, we will own up to them quickly and completely.

I won’t be leading The Washington Post day-to-day. I am happily living in “the other Washington” where I have a day job that I love. Besides that, The Post already has an excellent leadership team that knows much more about the news business than I do, and I’m extremely grateful to them for agreeing to stay on.

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. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there. I’m excited and optimistic about the opportunity for invention…

Stirring stuff. But, as my mother used to say, fine words butter no parsnips. We’ll just have to see if he means it. And if he can stand the heat in the kitchen when the going gets rough. Which, given the pathological dysfunctionality of US politics, it will.

Le Barroux

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Le Barroux, originally uploaded by jjn1.

Provence is full of interesting villages perched improbably on hilltops (and sometimes crowned by castles). This is Le Barroux near Carpentras, photographed from a friend’s balcony using a 90mm Summicron lens.

Larger size better.

American ‘justice’

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This morning’s Observer column.

Do you think that, as a society, the United States has become a basket case? Well, join the club. I’m not just thinking of the country’s dysfunctional Congress, pathological infatuation with firearms, addiction to litigation, crazy healthcare arrangements, engorged prison system, chronic inequality, 50-year-old military-industrial complex and out-of-control security services. There is also its strange irrationality about the use and abuse of computers.

Two events last week provided case studies of this…

In praise of “Le Trib”

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IHT

One of the (many) pleasures of holidaying in France is having the time to read the International Herald Tribune from cover to cover every day. (I try to look at it most days when I’m back home, but generally wind up just scanning the front page and the Op-Ed pages inside. In France, we buy it every day and savour it over breakfast.)

Le Trib (as some newsagents call it here) is an exceedingly good journalistic product. It uses its front page essentially as a content-bill for almost everything inside — which means that ever front-page snippet ends with a forward reference. So this morning’s piece headlined “Airlines Are Spending Billions in an Arms Race for Leg Room” comes to a temporary halt with “SEATS, PAGE 10” (where I learn that Business Class aircraft seats can cost over $250,000 each to make and install).

Editorially, the Trib makes a pretty good stab at bridging the cultural chasm that yawns between Europe and the US. Its coverage of European countries (especially France and Germany), though necessarily selective, is pretty informative. It’s good on cultural stuff. Yesterday’s paper, for example, had a terrific review of the latest Bayreuth production of the Ring Cycle. Earlier in the week, there was a good double-page spread on the Salzburg Festival, which had just kicked off. And the mix is leavened by ‘quirky’ pieces of the kind that foreign stringers and correspondents love to write — about the madness surrounding the royal baby in the UK, for example, or the astonishing fact that the French are eating fewer baguettes than they used to. Sacre Bleu!

The paper’s coverage is clearly slanted towards areas of the world where the US has major foreign policy interests. So there’s lots about Egypt and the Middle-East generally. And, of course, about China and Russia. In that sense, the Trib is indeed the international edition of the New York Times. And most of the OpEd pieces (Friedman, Krugman, Brooks, Cohen, et. al.) are ones from the Times that I’ve already read online. But that doesn’t matter: sometimes re-reading them in print helps.

What strikes one most, though, is the artfulness of the mixture. In the pre-Internet age, one of the great tests of a traditional newspaper was whether it was a good, satisfying read. The Trib easily meets that criteria, and perusing it over a leisurely breakfast reminds one of what good newspapers used to provide. I read a lot of stuff online, and couldn’t live without the Web. But there are some publications like the New Yorker — and the Trib — where print, despite its limitations, is still best.

How to spot a terrorist (NSA version)

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XKeyscore_slide

I’m not sure that this slide from the XKeyscore slide deck revealed by the Guardian has received the attention it deserves.

It says that one of the “anomalous” factors an NSA analyst might look for when deciding whether to drill down on someone is whether or not the person is using encryption (like PGP).

So… you can be a perfectly innocent, nay admirable, person like, say, Cory Doctorow, who encrypts his email simply to ensure that only he and the recipient can read it. But that fact alone might be sufficient to start an NSA check on all your communications.

This is one reason why the adjective “Orwellian” isn’t adequate for describing the mess we’re in. “Kafkaesque” is, if anything, even more apt.

How to spy on every American

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Simple. Just do three-hop analysis.

Deputy Director John C. Inglis told Congress last week that the agency conducts “three-hop” analysis.

Three-hop (also known as “three degree”) analysis means:

The government can look at the phone data of a suspected terrorist, plus the data of all of the contacts, then all of those peoples contacts, and all of those peoples contacts.

This means that a lot of people could be caught up in the dragnet:

If the average person calls 40 unique people, three-hop analysis could allow the government to mine the records of 2.5 million Americans when investigating one suspected terrorist.

Given that there are now approximately 875,000 people in the government database of suspected terrorists – including many thousands of Americans – every single American living on U.S. soil could easily be caught up in the dragnet.

For example, 350 million Americans divided by 2.5 million Americans caught up in dragnet for each suspected terrorist, means that a mere 140 potential terrorists could lead to spying on all Americans. There are tens of thousands of Americans listed as suspected terrorists … including just about anyone who protests anything that the government or big banks do.