Don Graham on the future of the Washington Post (and Kaplan)
FORTUNE — Donald E. Graham, the chairman and CEO of the Washington Post Co. says he is “feeling good” about the company’s sale of its flagship newspaper and other publishing businesses to Amazon CEO Jeff Bezos for $250 million in cash.
“I’m obviously very sad about our company selling the Washington Post, but unlike everybody else in this building I’ve had months to think it over and prepare for it,” Graham told Fortune in an interview Tuesday morning. “I think Jeff’s the best possible owner for the Post.”
The news drove Washington Post stock Tuesday to a 52-week high. At midday, shares in the company were up about $23, or 4%, giving the company a market capitalization of $4.4 billion — an indication that investors are more bullish on the company without its publishing unit. “I didn’t know what the market reaction would be,” Graham says. “Hal Jones, our CFO, and I agreed that the stock might go up, and it might go down. Nothing would have surprised us.”
Under the terms of the deal, the Washington Post Company will change its name. (The company retains Slate magazine, TheRoot.com and Foreign Policy as well as Kaplan, an education subsidiary, and cable and broadcasting properties.) Graham says a new name hasn’t yet been determined. “We will decide it among ourselves,” he says. “We’re open to suggestions, but we will not hire a consultant.”
He remains particularly optimistic about the growth of the education business. “There’s going to be massive demand for quality education. People around the world are hungry for education.”
Graham, whose grandfather purchased the Washington Post at a bankruptcy sale in 1933, was publisher of the Post from January 1979 until September 2000 and chairman of the newspaper from September 2000 to February 2008. He says he learned valuable lessons from his time as a newspaperman that will stay with him long after the sale to Bezos is completed.
“One of the business lessons we all learn is that it’s all about the people. The first thing [previous chairman] Kay Graham did was hire Ben Bradlee as editor, and it may have been the best decision she made in business, along with bringing Warren Buffett on the board” of directors, he says.
Such a people-centric view made it “easy” to sell the publishing business to Bezos, Graham says. “Jeff is a very, very decent, thoughtful man. He is very well read, and he’s written a lot about business. His personal qualities didn’t decide it, but they made the decision easy.”
Graham says he and Bezos have probably known each other for about 15 years, during which time Graham says he would reach out to Bezos for advice and perspectives on news and technology.
When Graham and Allen & Co. banker Nancy Peretsman began considering the sale of the Post, they drew up a list of potential buyers. “We both had Jeff on our lists but I said, ‘I doubt very much that he’d be interested because he is so famously singleminded about Amazon.’ ”
Graham, no slouch in the tech department (he is on the board of directors of Facebook (FB)), says he is optimistic about the innovation and thinking Bezos will bring to Washington Post. He points to Bezos’ memo to the staff of the Post (published on the Washington Post’s website), which says: “We will need to invent, which means we will need to experiment.”
“It’s going to be a very exciting place,” Graham says.