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Bezos Buys WaPo, Media World Rocked

BEGIN TRANSCRIPT

RUSH:  Puuulease!  Please stop telling me that Jeff Bezos' politics are unknown.  Come on!  How stupid do they think we are out here?  The guy just held a massive event with Obama.  The guy endorses every Democrat in the state of Washington.  He's a big booster of gay marriage.  But the Drive-Bys are telling us that Jeff Bezos' politics are held close to the vest.  Actually, I read someplace yesterday that Jeff Bezos is a Libertarian.  Jeff Bezos of Amazon just bought the Washington Post, and it shocked the Drive-By world.  I mean, it shocked 'em everywhere. 

There was no leak on this, which means the Obama administration was not involved.  There was not one leak.  Bob Woodward didn't know about this before it happened.  I mean, not one Washington Post journalist was able to ferret out that their newspaper was on the market.  Folks, the mainstream media is, for all intents and purposes, dead.  The dead tree, mainstream media, is dead.  All the actors are moving to social media.  That's where they're all headed.  It's just a matter of time.  Even Bezos, I think said that in 20 years the Washington Post will not actually be published as a paper.  It's all going digital. 

BREAK TRANSCRIPT

RUSH:  I think a lot of people (I was one of them) misunderstand Jeff Bezos.  They look at Amazon and they say, "It's never shown a profit.  What the hell?  How is this guy worth $25 billion?  He never shows a profit! How come Wall Street loves Amazon and hates Apple?"  And, by the way, that is an accurate statement.  Well, this all puzzled me, folks.  Because Amazon doesn't show a profit very often, and when they do report a profit, it's really tiny.

Yet Wall Street is perennially bullish on them. I mean, the analysts from all the brokerages are always very high on Amazon, very bullish. They love Amazon, and it's just the exact opposite with Apple.  So I had to talk to some people who are expert in this because, on the surface, it doesn't make any sense.  "Why would investors love a company that doesn't show profit?" But they do.

I mean, in the real world, they do. 

BREAK TRANSCRIPT

RUSH: Jeff Bezos purchasing the Washington Post for $250 million.  Now, thinking about this, a lot of print media is in dire straits.  The New York Times just sold the Boston Globe for $70 million, after buying the Globe for over a billion.  The New York Times takes a 93% loss.  You can go back not too many years, back to the nineties, and the Washington Post company could have commanded a billion dollars.  And now it's discarded in a fire sale.  Two hundred and fifty million, purchased by a guy with a net worth estimated to be $25 billion. 

So the real question here, if you want to have fun and be serious in analyzing this, this is play money for Jeff Bezos.  Two hundred and fifty million is play money for somebody who has $25 billion.  I'm fascinated by the media all proclaiming his politics are unknown.  Might even be a Libertarian.  The guy just had a joint meeting with Obama in Chattanooga.  The guy endorses every Democrat he can run across and gives money to in the state of Washington, big proponent of gay marriage.  Donald Graham, who runs the Post, is not gonna sell that paper to anybody but a leftist.  There were other buyers.  Allen & Company went out and handled the sale, New York media investment bank.  They went out and they handled this. They put together the list of suitors. 

I guarantee you, if I had gotten a group together that wanted to buy the Post, there's no way they woulda' sold it to me. The idea that they're gonna sell that newspaper to somebody other than a full-fledged leftist is a pipe dream.  The real question for me is, is Bezos gonna run this as a toy, is this just playtime for him, or is he serious about it as a business?  Looking at all of these dead tree news publications, and every one of them -- Washington Post, New York Times, Boston Globe -- in the last two weeks, they have all written extensively about my demise. 

They've been denouncing me.  They have been predicting my imminent demise, while it is they who are fading away.  It is they who can't compete.  It is they who can't keep up.  It is they who can't sell advertising, who can't sell ad pages. It is they who are dwindling away, and at least in the dead tree portion of their businesses, it is their demise that everybody is chronicling and talking about it.  But don't be comforted by that because just because a dead tree newspaper happens to fade away or become irrelevant doesn't mean anything.  The leftists now exist and thrive in social media and on blogs. 

You know how many people get their news from Twitter every day?  Put together a Twitter news feed, and that's where they find out what's going on.  And that's simply citizen journalism.  That's just a bunch of leftists scouring other news sites and retweeting or reposting what they find interesting.  But the left owns Twitter.  That's where they're all headed.  They're abandoning Facebook because Facebook is being taken over by the elderly.  I have a story on that in the Stack.  Young people are getting all ticked off and leaving Facebook because old people are getting on there, and they don't know how to use it.  And the story that I have in the Stack cites as an example. And to the young, elderly is 50, 55 plus.  They don't know that LOL means "laugh out loud."  They think it means "lots of love."  So they're sending all these notes around with LOL after it, lots of love, and they say, "this is embarrassing.  We got these old fuddy-duddies and these gummers here on our network, and they even know what it is," and they're abandoning it and all going to Twitter. 

And Twitter, certain parts of it, have become a leftist cesspool.  So for every newspaper demise, the people that work there are gonna end up online doing the same thing that they do, and young people more and more are not watching television either.  They're doing everything online.  They're watching video TV shows. They're either buying them a day later or they're pirating them or something. But fewer and fewer people are getting media in conventional ways.  And I know some of you people are probably thinking, "Well, how are you surviving?"  Because radio, AM radio particularly, is one of the oldest.  Why is it still around, by the way?  When all of these venerable institutions of once dramatic greatness are fading away and their ultimate demise is clearly seeable, how come old Limbaugh and AM radio, which is as old as newspaper, how come it's still out there? 

And there is a simple answer to this.  And it takes me to a fascinating story.  It's a story at LinkedIn, by the way, another website.  It's by the chairman of Sequoia Capital, which I think is a hedge fund.  His name is Michael Moritz, and he's writing about Bezos and what he might mean to the Washington Post.  And let me give you a pull quote.

"It won’t come as a surprise that Bezos explains that pleasing, if not thrilling, customers is Amazon’s most important task. In his 2009 letter --" he writes letters, investment letters every year to stockholders -- "-- he provided a peek into the internals of Amazon explaining that of the company’s 452 detailed goals for the ensuing year 360 had an impact on the customer, the word ‘revenue’ was used just eight times, ‘free cash flow’ only four times," although that's a big deal to Bezos, as I have learned and I'll explain as the program unfolds.  "'net income', 'gross profit', 'margin' and operating profit were not mentioned," in an investment letter. 

Now, "Even though there is no line item on any financial statement for the intangible value associated with the trust of customers this is, by far and away, Amazon’s most important asset." His point here is that you've got a guy who is totally customer oriented.  Well, the way I would define that is: Content.  You know, the answer to the question, "Well, how come you're still around, Rush?

"When all these venerable newspapers are going by the wayside, and news publishing is losing money left and right and selling assets at pennies on the dollar, how come you're not?  They're writing of my demise, by the way, while they fade away.  And I'm not in the middle of a demise.  There is no demise going on here. (chuckles)  The EIB Network is thriving.  The EIB Network is growing.  We're not on television.  We have a digital presence. 

But we're thriving and growing. 

What is it? 

Content, folks. 

Content has always been king. 

And as you know, I do this program for one group of people and one group of people only, and that's you.  The audience is king.  Now, as we've discussed, journalists -- the mere employees -- at newspapers and television news networks don't want to have to be worried about the audience.  They view the customer with contempt more often than they view the customer with respect.  Have you ever called in a complaint to a newspaper about content?  What do you get? 

"Well, you don't know enough to know how we do our business," or, "Well, you don't know what you're talking about.  We're not biased."  You get hung up on or shouted at or what have you.  You're the customer, but you are not respected.  You're the customer, but your opinion doesn't count a hill of beans because they're a bunch of elitists, and it doesn't matter to them.  They're not owners. 

I'm talking about the rank-and-file reporters and editors.  In fact, they often ask to be exempted from the bottom-line pressure.  They don't want to be in the equation that mentions profit.  They don't want to have to worry about it! They think they've got a constitutional role, so they ought to not be encumbered by the demands of the pressure to make money.  Well, that ain't Bezos. 

See, this is why it really matters how he views this purchase and why he did it.  If this is just a media toy for him, then it's gonna continue as it is and he's gonna use it as a platform to advance his politics while being at a distance. Because he has said he's not gonna be day to day. He's not gonna move to Washington. He's not gonna run this thing day to day.  But Bezos is who he is, and Amazon is clearly devoted to the customer. 

Amazon is clearly devoted to customer satisfaction. Clearly, clearly they are all about customer service.  News people aren't.  They couldn't care less.  So it's going to be interesting to see if Bezos brings that aspect of the Amazon business to the Washington Post.  Because if he does, it's got the potential to turn the place upside down.  Because journalists, folks, they don't write for you.  They write for other journalists. 

They really do.  They write for a reaction from other journalists.  "Wow, where did he get that?  Wow! What a lead, wow!  I wish I'da thought of that.  Wow! How'd he get that source! Wow, how'd he get away with getting that piece?"  Writing for the consumer? That's a foreign concept.  In fact, journalism isn't even taught that way.  Journalism today is taught as an agenda to advance liberalism. 

If you don't get it, that's your problem. 

They're just gonna work harder and harder at pummeling you with what they think you ought to believe or what they want you to believe.  But what you want to see in the newspaper? "To hell with that!" Well, that's not how Bezos runs Amazon.  So it's gonna be fascinating to see.  We won't know for a while, but the best indication will be to watch the reaction of staff journalists at the Washington Post. 

They will be the first ones to let us know what's going on in there. If the management of the paper makes decisions that are designed to grow readership, if that's one of the primary objectives that Bezos has here? You may think this sounds strange, but that's gonna be a red flag to people in the newsroom because that to them is compromising their integrity, giving the audience what it wants, 'cause the audience bunch of idiots. 

By definition, the audience doesn't know anything 'til the journalist tells them. 

BREAK TRANSCRIPT

RUSH:  Now what's happening is a bunch of Washington Post journalists are posting suck-up tweets about Jeff Bezos.  This is what's happening out there.  I'll tell you, wait 'til the left remembers that it was Amazon... Amazon runs a massive server farm. Amazon Cloud Services provides the cloud service operation for a whole bunch of companies. It's their servers, their vast data center operation.  WikiLeaks used the Amazon data centers.  Julian Assange. 

Now, wait 'til the left remembers that Bezos pulled the plug on WikiLeaks when they first started posting their stuff.  The left is not gonna be happy about that, and there's a bunch of hackers out there that go by the name of Anonymous.  It's a group of guys, people, and they specialize in hacking people that they think deserve to be hacked because they're not doing right social justice and this kind of stuff. 

That bunch tried to shut Amazon down when they yanked WikiLeaks. 

And, you know, Amazon doesn't pay even what the Washington, DC, city council calls "a living wage" to its warehouse people. Yeah, $12.50 an hour is what they're demanding that Walmart pay, the Washington, DC, city council.  Amazon pays 11 bucks an hour.  Now, he can't get away with paying people at the Washington Post $11 an hour. 

However! However, Jeff Bezos is going to encounter something that I'm fairly certain he doesn't have to deal with at Amazon, and that is -- wait for it, dadelut dadelut dadelut dadelut! -- labor unions.

BREAK TRANSCRIPT

RUSH:  Well, I stand a little bit corrected.  Bezos does have some experience with unions, especially in Germany, and he is fighting them tooth and claw, tooth and nail. 

BREAK TRANSCRIPT

RUSH: There is no imminent demise here.  I don't care what you've read.  I mean, the latest narrative, the latest template on me is that I may not be around in three years. I may not be around in five years.  I have been a "fad" for 25 years, and I may not be around the next three or five, and it's now surfaced again. 

While all of that is being written in newspapers, the very newspapers writing this are in fact imploding, falling by the wayside, losing value faster than anyone ever believed possible.  When the New York Times bought the Boston Globe in 1993, it paid $1.1 billion.  It bought the Worcester, Massachusetts, paper for $295 million in 1999.  Now, stop and think of that. 

Just 14 years ago, the New York Times paid $295 million for a newspaper in Worcester, Massachusetts.  The Washington Post was sold yesterday for $250 million.  The entire New England Media Group that the New York Times owned that included the Boston Globe, is now worth $100 million dollars.  They bought it for $1.1 billion in 1993.  "Despite even the lower price that the Globe fetched..." Just $70 million for the Boston Globe!

Folks, $70 million for the Boston Globe. The owner of the Red Sox bought it. Craig Huber, an independent research analyst with Huber Research Partners, "called the Globe a management headache and raised concerns about its finances. ... Brian Tierney, a Philadelphia businessman, bought the Philadelphia Inquirer and its sister newspaper, The Daily News, in 2006 from the McClatchy Company for $515 million. After Mr. Tierney’s purchase, national advertising plummeted and circulation continued to tumble.

"Despite laying off 400 people to cut costs, the newspaper company ended up in bankruptcy in 2009." To show you just what has happened to newspaper value, Jeff Bezos just bought the Washington Post for only twice what Paxton Media paid for the Herald Sun in Durham, North Carolina, just eight years ago.  The Herald Sun in Durham, North Carolina, eight years ago, fetched twice what Bezos bought the Washington Post for. 

It is clear that the Graham family had given up. 

It is clear that the Graham family had no idea what to do. 

They had not the slightest clue how to grow that newspaper.  They had not the slightest idea.  And isn't it fascinating -- as I mentioned earlier -- they didn't have the slightest idea because they couldn't really, when you get down to it... I know that they'll reject this, and if they react to this, they'll say that I'm (as usual) just wrong and making it up, or whatever they say.  But you have to have total disregard for your customer base for this to happen.

I think this has been one of the fascinating aspects of the news business, 'cause it is a business.  It's also a greater calling, and it's also a business with constitutional authority and importance and so forth.  The people in it take it soooo seriously, they are so full of themselves, that the very people who you would think the paper's published for are held in contempt more often than not. 

Do you think in any editorial meeting it is ever surmised what might appeal to the public? 

"That's what the comics are for, and that's what the crossword puzzle is for, and that's what the classifieds are for.  But when it comes to the precious liberal agenda content, we're not gonna screw with that," and it's not just newspapers.  It's the same kind of thing at MSNBC. It's the same thing happening at CNN.  Left-wing news organizations simply have no concept of customer service. 

They have no concept of they're in a business that actually has an audience.  They don't look at it that way.  Whereas just to use myself as a an opposite example, day in and day out in my mind every day this program is about one group of people, and that's you.  I don't care what other radio people say about it. I don't care what the TV people say about it. I don't care what print journalist say about it. I don't care what anybody says about it. 

I care what you think about it. 

That's what "meeting and surpassing audience be expectations" is all about. Empathy, respect, not viewing you with contempt, but rather respect and understanding that you are all highly intelligent. I don't have to dumb anything down here. I don't have to write for a third grade level, as they supposedly do in newspapers and so forth. The whole thing fascinates me.  So here you have a guy who is totally focused on customer service who has bought the Washington Post. 

How is that gonna work? 

Again, as I say, if this is just a toy purchase, eh, nothing is going to change.  If Bezos is buying this thing just to play games with it and have a little fun and continue to use it to advance whatever political ideas he's got, it's not gonna change.  But if he's actually gonna look at this as an ongoing, growing, thriving business, he's gonna have to do something manifestly different with it -- and he did say it's gonna change. (laughs)

It's funny, you have Bob Woodward running around, "Well, at least this isn't Rupert Murdoch buying the Wall Street Journal!"  Translation: "Well, at least we don't have some wacko conservative buying this."  I kid you not. 

BREAK TRANSCRIPT

RUSH:  Pasadena, California.  Hi, Don.  Great to have you.  Hello.

CALLER:  Rush, wow.  A longtime listener, like 20 years.  Congratulations on 25 years.

RUSH:  Thank you.  Twenty-five years and thriving, let's point out.  Twenty-five years --

CALLER:  Absolutely.

RUSH:  -- and expanding and growing.

CALLER:  Yes, sir.  So I humbly submit a possible weakness, if you will, in your theory about Bezos and --

RUSH:  What theory?  Whoa, whoa, whoa.  First state the theory that you --

CALLER:  Okay.  As I understand it, you're positing that perhaps the WaPo will become -- it might try to tend a little bit into the conservative direction --

RUSH:  No.

CALLER:  Oh, okay. 

RUSH:  Now, this is the reason I wanted you to [state the theory].  The way people hear what I say fascinates me. 

CALLER:  Okay.

RUSH:  No, no, no, I'm not being critical.  Don't misunderstand.

CALLER:  Okay.

RUSH:  I'm fascinated to read e-mail or go home and find what I thought I have been brilliantly clear about, somebody took entirely the opposite way I intended.  I never and do not think that Bezos is gonna take this conservative.  What did I say that made you think that?  'Cause clearly something did.

CALLER:  Yeah.  Yeah.  I was inferring that -- I was hearing a possible comparison to your 25 years of tremendous success and rolling to, okay, now, Bezos has got the Washington Post.  What's he gonna do, since he's a master of marketing and building a successful company for the long term, like you, what's he going to do to make this newspaper vital.

RUSH:  Okay, stop right there.  Stop right there.  This will not take away from your time.  If I have to hold you through the break you will be able to say everything. See, I'm glad you said this, because you mistakenly -- it's my fault, but you mistakenly assumed that because I was comparing myself to way current liberal media looks at audience --

CALLER:  Yes.

RUSH:  -- that I was saying that Bezos might decide to look at it the way I do.  And that was not my intention.  I was simply trying to illustrate the difference in how I look at you in my audience and how news people look at theirs.  I was not saying that Bezos is gonna replicate me, 'cause --

CALLER:  Right.

RUSH:  -- I don't think he's going to.  But I do think the audience for the Washington Post, for the most part, is liberal.  Now, you do have northern Virginia, you got a lot of Republicans there, but the audience in their view would be mostly liberal.  I don't think they even serve that audience so much.  But, see, the illustration I was making about me was meant as an aside, and because of where I put it, you took it as my positing that Bezos might duplicate what I was.  I in no way meant to imply that or even state it 'cause I don't think at all that that's a possibility.

CALLER:  Okay.

RUSH:  Now, I've gotta take the break.  Hang on there, Don.  Be patient.  Don't go away.  We'll be back.

BREAK TRANSCRIPT

RUSH: Don in Pasadena.  Now we got that cleared up.  By the way, I want to thank you.  That's gonna help me in the future, because in no way do I think Bezos is gonna be anything other than what he is with this.  So now, continue.  I know there are other things you wanted to say.

CALLER:  Okay.  So then my layman's guess is that if Bezos is gonna, you know, market this paper, make it successful, turn it around, I would guess that he would look to the -- what's one of the most successful marketing campaigns in the last 10 years?  Well, it's Barack Obama, 2008.  And what is that?  To me, that's socialism marketed to the masses.  And so my guess would be that that would be sort of the path that Bezos would take, that this will be, you know, socialism --

RUSH:  Well, now, wait just a second.  Okay, hang on just a second.  The Washington Post already is doing that, and they're failing.  Now, remember --

CALLER:  Right.

RUSH:  -- we're talking about a dead tree newspaper here.  What you've described is an online digital marketing campaign that Obama ran.

CALLER:  Yeah.

RUSH:  The Washington Post has an online business, and it is not nearly in as bad a shape as the dead tree version of the Washington Post. 

CALLER:  Right.

RUSH:  But I don't think that Obama, just to slightly disagree, I don't think that Obama campaigned on socialism.  He woulda lost.  I think what Obama campaigned on was something that is highly seductive to young people and women, and that is, a better tomorrow, a brighter future, and I'm the guy that's gonna -- if you go back and look at the image that was concocted of Obama, he's gonna end all the acrimony. He's gonna end all the bickering, the arguing, gonna bring about love and the country's gonna be respected and everybody's gonna have a job.  He was selling utopia.  He wasn't selling socialism.  If he woulda sold socialism, he wouldn'ta won.  Socialism is what they hid.

CALLER:  Well, yeah.  (laughing) 

RUSH:  It was the Julia ad.  Now, you and I saw the Julia ad, and we --

CALLER:  Yes.

RUSH:  -- laughed ourselves silly at it.

CALLER:  Right.

RUSH:  But do you realize that ad was seductive to a lot of people who didn't look at it as socialism; they saw that as fairness. 

CALLER:  Okay.

RUSH:  Look, young people -- and we've talked about it this week -- young people particularly, but most everybody is pessimistic as they can be.  In fact, I had this as a primary discussion topic today until all this news broke.  The overwhelming pessimism that everybody in this country has about their economic future, it's bleak, particularly among young people, and particularly among the people who voted for Obama. They are the most pessimistic, and they're the ones that got us all this, and what Obama does is promise the sun and the moon and stars and flowers and light and peace and love, and he's selling this brighter future out there with no substance whatsoever.  Bunch of lies, actually, but that's what people want.  And I think the fact that it hasn't happened, I think conservatism is so automatically called for, some optimism, to tell people that this country can be what they want and they can be what they want to be. 

CALLER:  Absolutely.

RUSH:  It's made to order.

CALLER:  Yeah.  No, absolutely.  And, I mean, it would be a fantastic thing if, you know, lightning struck and Bezos went in that direction but, yeah, as you said, that's not who he is.  But again, going back to, you know, perfect illusion that you gave with the Julia ad, yeah, that was very seductive, but would it be fair to say, though, the Julia ad really it's socialism marketed very -- as you said, very seductively, so wouldn't it be possible that that would be a sort of general way that Bezos might go?  You know, I'm a total layman, so I don't know how it all works.

RUSH:  They didn't tell it as socialism.  They sold it as fairness.  They sold it as being taken care of.  They didn't sell it in the intellectual, academic sense of socialism.  They didn't go out and say, "The government should take care of you and the government will take care of you, you don't have to do anything." They went out and simply portrayed, in animated cartoon form, how wonderful your life can be with Obama.  I don't think the Julia ad was seen as socialism by the people that liked it.  They saw optimism and a brighter tomorrow, a better tomorrow.  They saw just a bunch of sweetness and light.  And it's an illusion.  But it works.  It's seductive.  Don, thanks much.  

END TRANSCRIPT

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