Tag Archives: L. Gordon Crovitz

What Does Warren Buffett Know That Steve Jobs Didn’t?

I thought it was interesting when Warren Buffett made a major turnaround and chose to invest in a traditional newspaper.  On November 30, Berkshire Hathaway, where Buffett is Chairman and Chief Executive Officer, purchased the Omaha World-Herald Company, publisher of six daily papers in Nebraska and Iowa.  Such a deal is counter to the flow of his investment history, and represents a shift from his position about traditional papers.  In 2009, he stated that “we would not buy them at any price.”  You can read a summary of this transaction from the Wall Street Journal by clicking here, and view expert analysis in a video by clicking here.

There is something that Warren Buffett knows that Steve Jobs did not.  Buffett is one of the richest and most successful investors in business history.

In the Wall Street Journal, L. Gordon Crovitz recalled what Jobs said about the future of newspapers in his column entitled “Steve Jobs and the Future of Newspapers” (October 9, 2011).  Jobs said, “The only problem is that the [Wall Street] Journal is a newspaper and so is printed on newsprint.”  Further, he recalled Jobs saying “Whenever I have the time to pick up the printed version of the newspaper (sic), I wish I could do this all the time, but our lives are not like that any more.”  Crovitz summarized Jobs’ position by writing “he predicted that in five years there would be no more printed newspapers.”

That conversation was in 2006, so Jobs’ deadline has passed.  Sorry – there are still newspapers printed, delivered, purchased, and read in the traditional manner.  Since then, many newspapers have disappeared and many others are in financial trouble.  Some have pushed their emphasis to online editions, and now charge for access.

One of the great supporters of the traditional newspaper remains Donald Graham, the Chairman of the Washington Post Company, who said in a corporate news column in the Wall Street Journal, published on December 3-4, 2011 (p. B3), that he would neither sell nor spinoff the flagship newspaper or any of his company’s core businesses.

There is no question that reading online content from newspaper sites, such as the Huffington Post, is trendy, popular, and convenient.

To be sure, however, there are enough advertisers and enough subscribers to keep many printed versions going.  There are still plenty of people who want to get their paper from the front lawn, get their coffee, get back under the covers, and fold the pages to explore the content.  There are still enough people who spend enough time using digital devices who refuse to carry this mode into their treasured leisure time.  They want to sit in their easy chair, hold a paper, turn it, and even clip out articles of interest to them.  I subscribe to the Dallas Morning News and Wall Street Journal print versions, as well as the Wall Street Journal online edition.  The amount of time I spend with the online edition is about 2% compared with the traditional version.

I don’t think that Warren Buffett throws money away.  Something hit him to invest money in a paper whose weekday circulation has fallen 24% since 2006.   Maybe he wanted a challenge.  Maybe it links to his childhood occupation of delivering the Washington Post to homes in weathly neighborhoods.  I don’t know.  But, I do believe that he knew something about traditional newspapers that Steve Jobs didn’t.  And, for me, I will be under the covers reading my paper and sipping my coffee.  I’ll be digital during the day soon enough.

What do you think?  Let’s talk about it really soon!