What's Behind the Recent News Acquisitions?

It came as a surprise to me when I learned this summer at Jeff Bezos, owner of Amazon, was purchasing the Washington Post for $250M. Why would such a savvy, successful entrepreneur be spending that sum of money to enter a business that others have been fleeing like rats from a sinking ship? I really dislike any thought of those critters but it is a reasonably good analogy for this situation. So, as you'd imagine it came as more of a surprise to me when I learned Pierre Omidyar, founder of eBay, was also jumping on the news bandwagon a few ago. And then there's Laurene Powell Jobs's investment in Ozy Media, and all the other recent money headed towards the less traditional news channels like Buzzfeed and Vox Media. Was there something that these Silicon Valley behemoths were seeing in the newspaper business that so many others were missing?

News revenue has been drying up over the last decade as sources of news proliferate via online channels (reducing subscription volume) and ad revenue moves to higher ROI, usually digital, channel. There have been attempts to plug the hole and/or reverse the trend via online paywalls, creative advertising strategy, and reorganizations, but they have proven more or less ineffective. So, it begs the question, what do these digital media mavens have in mind? A recent article by David Carr offers some plausible hypotheses. Carr mentions the tech world's obsession with making the world a better place; and suggests that perhaps communicating with a broader audience via news offers them another way to fulfill their underlying aim.

One speculation I have is that these tech geniuses may have see potential in digital advertising revenue specifically via Native Advertising / Sponsored Content. As I have alluded to in my recent posts, Native Advertising is one of the hottest trends in online advertising. With higher click through rates and some evidence of higher ROI through sales conversions, many brands are looking at sponsored content as a better destination for their spend. Publishers are reacting in kind; with more and more offering sponsorship of content in addition, or even in lieu of the longstanding banner and skyscrapers internet eyeballs have begun ignoring.