One could argue that the acquisition or merger of social media giants and traditional news conglomerates will save obsolete news houses that are destined to disappear.
For example, in September, Marc Benioff, head of Salesforce, bought Time magazine for 160 million euros. A month later, Craig Newmark, the millionaire founder of Craigslist, used a tenth of this amount in launching The Markup, which proclaims itself to be a non-profit means to analyze the behavior of great technology.
He also contributed more than two million to found a digital media about news in New York and donated another 17 million to the Faculty of Journalism at the University of the City of New York.
In 2013, Jeff Bezos, the head of Amazon, and the richest man in the world, bought The Washington Post for 190 million euros.
That same year, the founder of eBay, Pierre Omidyar, showed his interest in founding a non-profit medium with a similar investment. His ad took the form of First Look Media, a news organization focused on independent journalism.
Some of the editors left the publication shortly afterwards accusing her of boasting of intentions that were far from materializing in practice.
Three years earlier, telecommunications mogul Xavier Niel had invested a large sum of money to take control of the French newspaper Le Monde.
We could continue listing similar cases if we were not assaulted by an inevitable question:
What does this trend respond to?
If we analyze the purchase of The Washington Post from an exclusively financial point of view, we must admit that the publication was not going through its best days.
Bezos himself admitted then that it was not the most prosperous business of his life. The opportunity came hand in hand with the entry of technology into the changing landscape of the press, as in so many other sectors.
The multinational can take advantage of the acquisition of the header to explore new opportunities to generate value. However, Amazon Prime already integrates newspaper content and presents them as a service rather than a product.
The media is affected by any technological changes. They are a very peculiar sector and can become the great laboratory of digital transformation. This is where failing corporate media conglomerates may find a lifeline.
An opinion shared by Miquel Pellicer, communication director of the Lavinia group, explains that “the degree of influence of Amazon in our lives has more to do with Amazon than with what is published in the Post, although it is a very relevant medium,” he says.
“Amazon is a company that is very good at taking care of the user experience and that vision brings a lot of value to the transformation of a newspaper.”
The vision of the digital environment is just one of the reasons that move technological moguls to enter the industry.
The investments of Benioff or Newmark, to name a two, present notable differences with that of Bezos.
In the US there is a certain idealized vision of the figure of the editor and does not rule out that this phenomenon is repeated by the hand of a strong philanthropic motivation.
Socially, directing a medium is something that has a lot of value, an ego component moved by the vocation to transcend. No wonder it’s attractive to the traditional American millionaire.
On the other hand, Julia Cagé, author of the book Saving the media, refuses to define the majority of these technological millionaires as philanthropists.
He prefers to talk about them as the new owners of newspapers.
“A large part of these magnates seems to care a lot about regulation or, more specifically, the guarantee of absence of regulation, particularly in the case of electronic commerce and the telecommunications sector,” criticizes the French economist.
“The acquisition of a means of communication can be for many of them a way to get access to politicians.”
Cagé includes ProPublica in the category of philanthropic initiatives. It is a non-profit news agency founded by the billionaires Herbert and Marion Sandler, but refers to the case of Bezos or Benioff as a model of sponsorship.
In addition, he denies that these technological referents understand better than other shareholders what the business model of the press should look like in the future.
“Making money thanks to technology in a specific sector does not make you an expert in the operation of the media industry,” he says. “I do not think they are doing it worse from the knowledge point of view, but they are not doing it better either.”
The economist also points out the differences in the management that these magnates make of their new companies. The founder of Amazon has invested heavily in The Washington Post, Xavier Niel has done the same in Le Monde and its templates have grown accordingly.
But Patrick Drahi – a French-Israeli technology entrepreneur who controls various media around the world – has halved the size of the newsrooms of the companies he bought, which has a negative effect on the quantity and quality of the news and the information it produces.
One conclusion is clear, no social media or technology mogul invests millions or billions of his or her money just to brag about owning a mass medium.
Investments of this caliber are well though out and they all have a very clear and specific goal. In the case of Bezos, for example, is control of the news market and retail sales online.
Media control provides influence, influence provides access and access provides power. In the end, it is not necessarily about the money, but about the influence, the access and the power.