On April 4, Donald E. Graham sat for a videotaped interview about how the Internet and digital technology had hammered and transformed the news business. Cradling a coffee cup emblazoned with the word “Washington,” Graham sat next to his desk, with three Herblock cartoons on the wall behind him and a photo of a young Warren Buffett on the table next to him.

Graham gave a classic performance, telling stories of bygone times in his disarming aw-shucks manner, dispensing compliments to colleagues and rivals while mixing in his sober, analytical view about the reporting-intensive newspaper business — and his failure to come up with a way to sustain it.

“One of the questions that faces places like the [New York] Times and The Post is: Is there any kind of a plus to a news organization in having really high-quality reporting and editing?” he said at one point. “I’m pretty sure the answer to that is yes, but we have not figured it out.”

He added, “If somebody said to me there’s a way out for newspapers, but you’re going to have to lose $100 million a year to get there four to five years from now, I would sign up for it in a minute.”

But no one said that to him and unbeknownst to the three veteran journalists interviewing him that day for Riptide, a journalism history project at Harvard University’s Shorenstein center, Graham was trying to figure his own way out — of the daily newspaper business. Quietly, he was shopping around for a buyer, one without a political agenda but also one with a sense of stewardship about the paper — and pockets deep enough to buy the franchise and cover losses if necessary.

The shifting fortunes of The Washington Post.

Amazon founder and chief executive Jeffrey P. Bezos ultimately agreed to buy the paper himself for $250 million, also acquiring El Tiempo, Express, the local Gazettes, and Robinson Terminal, including Robinson’s 23 acres of undeveloped land in Charles County, Md.

He wasn’t the only billionaire wooed, however, and that hadn’t been the only price discussed. Among others, Graham and the advisory firm of Allen & Co. also approached Robert Allbritton, owner of Politico and whose family once owned the Washington Star; Michael R. Bloomberg, who some people believed would want a daily print outlet in addition to his economic-driven subscriber news and data service; David Rubenstein, co-founder of the Carlyle Group and a major Washington philanthropist; and Eric Schmidt, who was chief executive of Google for 10 years.

The asking price in other negotiations reached $600 million, according to people familiar with the talks; for one prospective buyer, the price was significantly higher, according to a person whose advice was solicited by that person.

How Graham, who declined to be interviewed for this piece, arrived at this point is both a financial and personal story. For more than 20 years, there has been a growing sense of alarm among The Post’s business executives about trends in the industry that could destroy the franchise. Along the way, hard decisions have been made, some underappreciated or forgotten, some of them recent and raw.

Through much of the turmoil the paper continued to undertake noteworthy journalism and dramatically increase its online audience, but inside the company, there have been long-standing questions: Who is the target audience — and is it local or national? Or both? Should The Post have cultivated more of a national identity online? Should the paper have started Politico in-house? Should it have asked online readers to pay earlier? Should it have devoted more effort to becoming a technology as well as media company? And how big a newsroom does The Post need?

But few people have any confidence that different choices would have led to a different outcome. “I think it was inevitable,” Jack Shafer, the media critic for Reuters, said of the financial crisis at big-city dailies, noting the big write-off Rupert Murdoch’s News Corp. declared not long after buying the Wall Street Journal publisher Dow Jones and Co. and that the New York Times’s stock lost three-quarters of its value over the past decade. “They all did different things, and they’re all in the same boat today. I don’t think Don or anyone else should beat themselves up. Show me the paper that got it right.”

Now Bezos inherits not only the storied journalistic legacy of the paper, but the strategic questions that go to the heart of the business and the paper’s identity and its future. How can you take over a still formidable newsroom and make money? Bezos’s combination of technology and marketing savvy could help find the answer, and he has said he is “optimistic about its future.” His decision to invest in the paper has other publications suddenly paying close attention.


The major events that have shaped the Washington Post Co.

Before the sale was announced, few people thought that Graham, whose entire life was entwined with the newspaper, could bring himself to sell it.

“This was something no one thought Don could ever contemplate,” his niece Katharine Weymouth, publisher of The Post, said in an interview. She said selling it was one of three scenarios she described to Graham over a meal late last year at the Bombay Club on Connecticut Avenue, but one she deemed “unthinkable.” Afterward, they went for a walk and talked it over on a bench near the White House.

“He asked whether I was recommending that we sell The Post,” she said. “I said, ‘Not recommending; I don’t want to do it. But maybe there is somebody out there who could invest more than we can . . . and shepherd The Post to a new generation.’ ”

A couple of months later, Graham called former Post president and venture capital executive Alan G. Spoon, who is still a trusted adviser. “Are you sitting down?” Graham said, before telling him he was thinking the unthinkable.

“Up until the day it was announced, I had not thought that the Graham family would ever unload The Post,” said veteran newspaper industry analyst John Morton, “though I have come to sympathize about why it’s better for the newspaper that they did.”

A life in newspapers

The paper was Donald Graham’s destiny. When his grandfather Eugene Meyer bought a competing paper and merged it with The Post, he told a friend that “the real significance of this event is that it makes the paper safe for Donnie.” Graham was then 8 years old.

He had an aptitude for it as well. He worked on the high school paper at St. Albans. At Harvard, he sailed into the top job at the student daily, the Harvard Crimson. After stints in Vietnam and on the D.C. police force, he joined the reporting staff at The Post, became sports editor, and worked his way up so that when he became publisher in 1979 people felt he had earned the job, not just inherited it.

His arrival at the paper coincided with the newspaper’s fat years, with large and growing profits and a large and growing newsroom.

But in recent years, the financial pillars of the newspaper industry have crumbled. Major newspapers, including The Post, have lost lucrative classified advertising to Craigslist and other Web sites. Print advertising has fallen at alarming rates, a slide accelerated by the economic crisis; many local retailers have also given way to national chains. Even online advertising has been crimped because of massive competition and programmatic buying that automatically sends ads to leverage unfilled Web inventory, which Web sites make available at cheap rates.

Print circulation, too, has tumbled across the industry. At The Post, average weekday circulation in the first half of this year hit 447,000, down 7 percent from the same period the year before and far below the 1993 peak of 832,332. Newspaper industry revenue slid from a record $49.4 billion in 2005 to $22.3 billion at end of last year, and the pattern at The Post was the same. More problems are looming: Weymouth said one danger is that some of the coupons now in print editions could migrate to mobile devices.

Many Post executives and advisers have become pessimistic. Spoon compared the business outlook to looking down a staircase at a landing and trying to decide what condition the paper should be in to arrive there in good shape. But what if the staircase is a spiral one without any landing?

For more than a decade, the paper has been trimming the newsroom while scrambling to establish a stronghold on the Web that could lead to a more stable future. Graham has said recently that he no longer knows how to make a quality newspaper viable nor does he have the stomach for cutting the staff further. He said it was time for someone else with new skills – and more money than could be spent by what Graham called “our small public company.

Last year, Graham gave no sign of thinking that way. In July 2012 when Reuters columnist Shafer gave Graham advance word about a piece proposing the sale of the paper to Bloomberg, Graham wrote back and said: “Thank you. I will ignore your advice as usual.”

Less than a year later, his view changed. “Our revenues had declined seven years in a row,” Graham told the staff when he announced the Bezos acquisition. “We had innovated and, to my critical eye, our innovations had been quite successful in audience and in quality, but they hadn’t made up for the revenue decline. Our answer had to be cost cuts, and we knew there was a limit to that.”

Bezos could resemble Graham’s grandfather, who made a fortune in finance, bought The Post at a bankruptcy auction and sustained losses for 21 years while building the paper’s reputation and readership.

“I think it was wrenching” for the Graham family to sell, Weymouth said. “But everyone wanted to do what was best for The Post ultimately. It’s not about what’s best for the Grahams.”

Although the sale of the newspaper might be in the best interest of its journalism, it was, in fact, also in the best interest of the family fortune and shareholders. Current trends were eroding the value of The Post franchise. It was only in 2010 that The Post had sold Newsweek to 91-year-old audio equipment pioneer Sidney Harman for $1 — and later the publication folded. No one at the company wanted to repeat that.

“This also had major ramifications for preserving the wealth of the Graham family in addition to other shareholders,” said Morton, the newspaper analyst.

There is a personal dimension as well. Graham has had differences over style and strategy with his niece, who was groomed to take over the paper and will remain publisher. Unlike Graham, she declined an offer from then-executive editor Leonard Downie Jr. to work as a suburban reporter. Instead, over 17 years, she rose through the ranks of the general counsel’s office and advertising department before becoming publisher. And unlike Graham, she took charge of the paper in 2008 just as the bottom fell out of the industry and the entire economy.

Some critics have faulted Graham for not casting a wider net to find leadership to manage the crisis.

“Where I do fault the family is, at this pivotal time for the business, the industry, for our democracy . . . they went and got another member of the family,” said Alan Mutter, a veteran media executive and author of the blog Reflections of a Newsosaur. “I don’t disrespect Katharine, but is it possible that of all the people in newspapers or digital media that she was the one?”

“There’s a lot to be proud of,” Weymouth said. “Do I wish we had been more successful? Sure.”

Graham, who votes 86.6 percent of the controlling A-class shares through his own stock and that in family trusts he oversees, has a strong sense of family and an aversion to conflict and publicity. He does not criticize Weymouth. He has said she needed to make her own choices, even mistakes, without second-guessing from him. Moreover, Weymouth, daughter of Graham’s sister, Lally, had been a favorite of his mother, Katharine Graham.

One key deliberation was the imposition of fees for frequent online readers, a step taken earlier by the Wall Street Journal, the New York Times and the Financial Times. As others adopted such fees, The Post was criticized as being late.

People who have spoken to Graham and Weymouth privately say he remains skeptical about the benefits of the model, fearing that the income from digital subscriptions won’t be enough to make up for a loss in advertising if online readership falls precipitously. Weymouth and her top business executive, Stephen P. Hills, pushed for it for some time, arguing that it could generate a new, stable revenue and slow the ebb of print subscribers to the otherwise free online version of the paper. Graham was incensed when word of the plan was leaked to the Wall Street Journal in early December 2012. At that point, a news release had already been drafted; it was shelved for weeks until Graham gave final approval.

“It should be a plus for The Post if we execute it right,” Graham said later, in the April interview. “Steve Hills and Katharine Weymouth have really thought this through. . . . They’re doing it in a way that’s well suited to us. It will be successful, but I don’t think it will be a huge difference maker.”

Graham, unlike Weymouth, is absorbed by the technology-oriented work of the company’s WaPo Labs unit, which is run by a former Amazon executive Vijay Ravindran and is not being sold to Bezos. The unit is developing digital technologies that might “enhance and support” the newspaper division, luring more readers and ad dollars. Roughly 25 million people on Facebook downloaded its Social Reader, but use of the service dwindled as fast as it had caught on.

Graham also was unhappy about the open friction between Weymouth and former executive editor Marcus W. Brauchli, though he welcomed the eventual appointment of Martin Baron to the job.

Graham, by comparison, is nothing if not discreet. He even kept his efforts to sell the paper a secret from his sister Lally Weymouth, a longtime Newsweek and Washington Post contributor, until shortly before the deal was announced. His sister was very upset, acquaintances say, but her work will continue to appear in Slate and The Post’s Outlook section, though the paper will no longer pay her $300,000 salary.

Above all, however, the decision to sell The Post wasn’t just a matter of family relations, but rather the final step in a financial decline whose roots date back more than 20 years, according to interviews with current and former Post business and editorial executives, executives at other companies who have discussed strategy with Graham, and outside analysts.

Asked when he first became alarmed about the viability of the newspaper, Hills says: 1992. That’s when the realization set in “that big circulation declines were likely coming, regardless of what we did,” he says.

“Before there was an Internet, before there was an AOL, the circulation of newspapers was going down,” Graham said in the April interview, which was part of the “Riptide” project carried out by former Time Inc. editor in chief John Huey, New York Times veteran Martin Nisenhotlz, and Paul Sagan, a former new media director at Time Inc. and former CEO and now executive vice chairman of Akamai Technologies, which provides technology advice to businesses. Graham’s interview and others are posted on the Web site.

In 1992, Robert G. Kaiser, then managing editor, attended conferences in Silicon Valley and Japan about the future of digital media. It was before the explosion of the Web or laptops, and on the flight home, Kaiser wrote — longhand — a memo to Graham and other top executives.

“The world is changing with amazing speed, and we need to pay close attention to what is happening. . . . No one in our business has yet launched a really impressive or successful electronic product, but someone surely will,” Kaiser wrote. “The Post ought to be in the forefront of this — not for the adventure, but for important defensive purposes. We’ll only defeat electronic competitors by playing their game better than they can play it. And we can.”

The Post did try to act on some of Kaiser’s insights. Among other technology ventures, the paper drew up prototypes and in 1993 even launched an online product, Digital Ink, which charged for access on a proprietary AT&T platform and had about 30,000 subscribers. By late 1995 as the potential for the Web became apparent and readers turned to faster, easier-to-use Web browsers, Graham and Spoon changed gears and turned to an ad-supported Web model. As Spoon put it later, The Post was “winning the county track meet, but the Olympics lay ahead.”

Spoon, a lawyer who did his undergraduate work at the Massachusetts Institute of Technology, was anxious to keep The Post ahead. “As AOL was coming on, I’d go to the movies, there was ‘Sleepless in Seattle.’ There was the e-mail going back and forth. Everybody’s laughing. And I’m suffering,” he said in a March interview for the Riptide project.

In an interview for this article, Spoon said: “The Post was early. The board gave me and Don license to build for the Internet. We lost a lot of money on the way and thank God we did. We built a platform early.”

The Web venture brought tension with the newsroom. Graham put the Web operation in Arlington, in part to sidestep the union but mostly to let it develop outside a newsroom he felt was stuck in a different era and was antagonistic to the Web. Critics say the separation of the newsroom and Web operation impeded coordination and duplicated tasks.

One example of the difference between the immediacy of the Web and the traditions of the newsroom: During the 1998 Microsoft antitrust trial, Post reporter Rajiv Chandrasekaran was sending reports at midday and Spoon thought they should be put on the Web immediately, while Downie, then the executive editor, thought the story was incomplete and publication should wait until it was ready for the newspaper’s print edition.

The Post was also slow to hire its own technology experts and engineers. “To me, that is one of our central failures,” Graham said in the Riptide interview. As a result, much of The Post’s software was clunky or slow, frustrating people inside the company who were trying to compete in the minute-to-minute race of the Web as well as readers who, armed with high-speed broadband, wanted faster page loading times or had trouble finding articles. Each wave of new technology — most recently mobile and video — brought new challenges.

Tangled Web strategy

Nonetheless, in 2000 The Post’s Web site was up and running and the cliffhanger election between Al Gore and George W. Bush drew a surge of traffic. “After the 2000 election, a large Web audience came to The Post without a dime spent on marketing,” said then-managing editor Steve Coll, who is now dean of Columbia University’s school of journalism. “It was like a giant crowd was standing out in the street, and we were looking down on them without knowing whether we should just throw them our chicken bones or try to give them more.”

One of the defining moments in the story of The Post was the 2003 managers’ meeting at the Inn at Perry Cabin on Maryland’s Eastern Shore. Coll proposed tapping the paper’s national and international reputation and putting more resources into making The Post’s Web site into the digital world’s top news site. He believed that big-city dailies were marching like lemmings off a cliff, with the weakest going first and The Post, among the strongest, going last but still going.

“There were measurable and fairly certain risks in staying the course that would lead to the cliff’s edge and the only question was how quickly,” he said in a interview for this story. “The other course was to turn around and take a substantial risk using debt to buy things and reposition the paper and its journalism. It might fail spectacularly, but it would be noble.”

In response, Graham “dumped all over it,” said another editor who attended the session. Graham reiterated his mantra that the paper was and would remain a local business, with a still enviable local market penetration and local ads. Remember the Loudoun County fireman, he said, he’s our customer. Even if the local ads were vanishing, they were, and still are, a key revenue source for the paper. They also make up a sizable chunk of the online ads.

For a variety of reasons, Coll left the paper about a year later.

Although supporting the continued expansion of the Web site, Graham has remained committed to that local business model. While the New York Times expanded international and national bureaus, and widened its lead in online readership, The Post trimmed its foreign staff and shut down all of its domestic bureaus outside Washington. When it came to building a large national audience, the paper increasingly relied on its expertise about Washington.

To a degree, Graham associated the national ambitions of the staff with an elitism he disliked. True, his own pedigree was privileged, but he had balanced it with his stints in Vietnam and as a police officer, and a passion for improving the education of the District’s least fortunate.

“We got better and better educated, our staffs. Washington, which is a fabulously educated market, has 40 percent college graduates, but The Post newsroom is 100 percent college graduates,” he said to Huey. “We stopped being as interested, all of us, including me, in the comics, the horse racing, which used to be a big deal.”

Weymouth said, “The Times serves the 1 percent, the elite,” albeit on a national scale. By comparison, she said, Graham had decided that The Post would be “for teachers, taxi drivers, and police officers as well as the Hill.” She said, “We want to serve the real people.”

‘Don’t lose money’

At the time of the Coll debate, it looked as though cutbacks would be inevitable, but Graham and others underestimated the magnitude of the pressure to come. Coll recalls that Graham “would say in this ‘someday, my son, this will all be yours’ sort of way, that I would have to cut 2 percent a year out of newsroom for next 10 years. I thought that’s not so bad. The first five are a gimme.” So, Coll recalls: “I would say to people we have 10 or 15 years to figure this out. And I think Don thought we had 20 years. It turned out we had five years.”

In mid-2008, just after the paper won six Pulitzers for work done the year before, 231 people in the newspaper division took buyouts, creating $79.8 million in charges and contributing to the first overall operating loss since the company went public 37 years earlier.

In 2009, The Post closed a costly printing plant that had been opened only 11 years earlier.

As buyout followed buyout in the newsroom, tension rose. Hills and Weymouth absorbed a great deal of the newsroom criticism, and it didn’t help that Weymouth — and other company executives — received hefty performance bonuses that people in the newsroom felt were a reward for cutting staff. “Cutting can enforce a certain discipline. It forces you to look at what readers value,” Weymouth said. But, she added in an interview: “The mission was to cut as little as possible. The marching orders from Don and the board were ‘don’t lose money.’ ” Asked whether that was the right strategy, she deferred to her uncle.

“Don was the one pushing the budget cuts,” a onetime senior Post newsroom executive said on the condition of anonymity to protect relationships. “He always gets off easy as the avuncular figure up on the ninth floor.”

“It’s a very reasonable objective set by a very reasonable guy who just wanted to make a little money,” one senior business executive said.

Tighter budgets inflamed friction over visions of what The Post should be. How much should it generate with its own original reporting vs. piggybacking on work generated elsewhere as is done at Gawker and many other online publications? Should it aspire to be very good, or, in the words of one Post business executive, just good enough? Should it compare itself with the New York Times, a national publication, or crumbling big-city dailies whose business models were historically closer to The Post’s?

This played out in battles over newsroom budgets and control over areas such as who should control the design of applications for mobile phones. Hills tangled not only with then-executive editor Brauchli, but other senior company people, too. Hills compared The Post to the Huffington Post and the newspaper in Dayton, Ohio. He had what was supposed to be an off-the-record conversation in spring 2012 with a small group of reporters at the home of former staffer Bradley Graham, where he described a more limited vision of the paper’s ambitions and resources. The most inflammatory comments were all leaked to the publication AdWeek.

Hills believed his comments were misinterpreted, and that the newsroom needed to face the financial reality.

True, no one in the newsroom wanted to be Dayton, but even the Times offered limited comfort as a business model. It, too, has bought out some reporters as it struggles with declining revenue and a heavy debt load.

A year later, Graham was staring down The Post’s financial realities. “Don gave me numbers for the next several years’ finances,” Spoon said. “He wasn’t forecasting profits.”

The Buffett effect

Another factor in Graham’s decision: Warren Buffett. Graham repeatedly talks about his responsibility to shareholders, and there is no bigger outside shareholder than Buffett’s Berkshire Hathaway, with 27.68 percent of stock. Buffett was a director of The Post Co. for 26 years and an adviser and confidant of Don’s mother, Katharine, for even longer.

He also guided investments related to the pension fund, finding two talented managers who made it vastly overfunded — an anomaly in American business. A sizable chunk of Berkshire Hathaway stock helped. That cushion helped finance the buyouts in recent years. At the end of 2012, the fund had an excess of $605 million, more than 40 percent beyond its obligations.

Even as Graham is getting out of the business, Buffett is jumping in. Buffett continues to predict declines in ad, circulation and profits of newspapers. But over a 15-month period through March 1, he spent $344 million to buy 28 newspapers — including his hometown paper, the Omaha World-Herald. In his annual letter to shareholders, he noted that the papers were very cheap and added that while they weren’t growing they still “should be profitable for a long time to come.”

Yet Buffett’s vision of newspaper success doesn’t reflect The Post’s model. He bought mostly small newspapers from Media General, leaving behind the chain’s Tampa newspaper. He has also shut down one of the papers he did buy. In his annual report, he said that big newspapers have lost their primacy in many areas, but that they can keep that primacy in local news where people read about the mayor, taxes or high school football.

“A reader’s eyes may glaze over after they take in a couple of paragraphs about Canadian tariffs or political developments in Pakistan; a story about the reader himself or his neighbors will be read to the end,” Buffett wrote.

But The Washington Post Co. isn’t Berkshire Hathaway. If the Graham family wanted to, it could sink more money into the newspaper instead of diversifying, as it has recently, with small acquisitions in the hospice and boiler ignition businesses. After all, with two classes of stock, A and B shares, the family holds the only votes that counted.

“The whole idea of the dual stock structure was to preserve the family’s interest,” Morton said. “The only thing that would happen to the newspaper would be what the family would have wanted to happen. The theory was that if it came to it they could thumb their nose at Wall Street. And the company in early days did.”

Over the years the company had branched out into a cable provider and half a dozen broadcast television stations. Morton believes the acquisition and growth of the Kaplan education division altered that attitude even more. “The company changed when they got hold of Kaplan. As Don acknowledged, ‘We’re no longer a newspaper company but a company that happens to own a newspaper.’ ”

The erosion of the newspaper franchise has made it less important to shareholders. In 1991, the newspaper division — then as now mostly The Post itself — was 47 percent of total company revenue; now it has shriveled to about 15 percent.

“Previous management of the newspaper (that would be me) did not see clearly the drastic changes that were coming to this business,” Graham wrote in the annual report for 2009.

Wall Street and investors seem buoyant about its sale. The Friday before the sale announcement the stock, which had risen sharply earlier in the year, was selling for $559.95 a share. On Friday the stock closed at $610.99 a share.

“There’s really only one loser in this,” said a longtime Post company executive, “and that’s Don.”

Trying to fill the gaps

In his 2012 annual report, Buffett noted that for decades newspapers made money with little effort. “As long as a newspaper was the only one in its community, its profits were certain to be extraordinary; whether it was managed well or poorly made little difference,” he wrote. “As one Southern publisher famously confessed, ‘I owe my exalted position in life to two great American institutions — nepotism and monopoly.’ ”

The Post also suffered because for years ad sales people could essentially wait for the phone to ring; sales now require a more aggressive and creative strategy. A senior Post business executive acknowledged as much, albeit with a jab at the news department. “We were monopolists in the ad department,” the executive said, “and we were monopolists as journalists.”

In the 1990s, Spoon and many others thought digital ad revenue would not only fill in the gap left by declining print ads but exceed them. That didn’t turn out to be the case because advertisers could count clicks and sought to drive down the price they paid for each one. And even though The Post tried a variety of online methods to hang on to classified ads leaving the paper, the competition for such ads remained fierce.

“The problem was the newspaper was a package and you could sell that package. People would pay a quarter and while they were at it would see a tire ad or movie review,” said another former Post executive. “And you got a tremendous return on that investment. . . . The Web means you have to compete for every click.”

“I think it’s going to be challenging for broad-based, general interest news to bring together in one place, electronic or print, what used to be the bundle that was offered because of fragmentation,” Spoon said in his March interview with Huey, before he learned that Graham was going to sell the paper. What lies ahead, he says is “personalization, user-generated content, professional- and user-sourced curation.”

“When the tiles come back together, it’s not going to look like the painting with just three colors inside a given frame. It’s going to be different for every person,” he said.

Missed opportunities

Many people at The Post mourn missed opportunities, and with the benefit of hindsight there have been many. The Post sought to invest in Facebook at an early stage, an investment that would now be worth several billion dollars. The late Christopher Ma, a Post executive whose daughter knew Facebook founder Mark Zuckerberg at Harvard, helped bring together Zuckerberg and Graham, who agreed on an investment. But Zuckerberg later opted to go with a venture capital firm with more tech experience and Graham politely bowed out.

Some critics have said that The Post erred by failing to hang on to staffers John Harris and Jim VandeHei instead of letting them go to Allbritton and start Politico, which has its own ambitions to become a Washington player and stake a claim in the political reporting niche. Graham says, however, that while reporters at The Post compete with Politico, from a business point of view Politico is not a significant competitor.

Spoon has said The Post lost out by not buying more cable networks or television stations when they were far cheaper than they are now. It looked at investing in eBay, but didn’t.

One miss that isn’t mourned: The Post’s bid for the Boston Globe. It lost to the New York Times, which paid $1.1 billion in 1993. In August, the Times sold the Globe for just $70 million.

To some analysts, greater investment success — or continued big profits at the now-struggling Kaplan education unit — would have given Graham a greater ability to subsidize losses at the newspaper.

But people who know Graham say he doesn’t think that way. “It’s each business on its own bottom,” Spoon said. “That’s the way it’s always been run.”

One senior Post Co. executive says that greater investment success wouldn’t have changed Graham’s mind. “Having a lot of money in the bank is hardly a guarantee that you will solve all these problems,” he said. “The company always had enormous borrowing capacity. But Don felt what it was going to take was not something that could be easily envisioned within the confines of a public company.”

Some longtime Post business people respect Graham’s decision but don’t necessarily agree with it. As the senior executive put it, if you had called an ad company and asked what it would cost to build the kind of reputation the paper had, the answer would have been: untold millions.

That might be one reason Bezos is investing in the paper. “I knew the quality of the people would be very high,” he said on ABC’s “Good Morning America” on Wednesday. “The business challenges in the newspaper industry have nothing to do with the quality of the people. These are big industry-wide trends.”

A sense of loss

Even people who have differed with Graham tend to feel loyalty toward him. “I love Don and would step in front of a bus for him,” Coll said. Even though Graham didn’t adopt his strategy, Coll said, “I don’t feel aggrieved about any of this.”

Meanwhile, Graham isn’t completely done with the news business. Slate and Foreign Policy were not part of the Bezos purchase. Neither was WaPo Labs, whose head, Ravindran, Graham has called “the most valuable player at The Washington Post.” Graham is also a fan of a WaPo Labs software called Trove, which gave rise to Social Reader. After the sale of the paper, the company will launch a new version of Trove, a tool for creating personalized newspapers. Although Trove failed to get traction upon its first release, Social Reader has been downloaded by nearly 25 million Facebook users, whose contacts could help jump start a new marketing drive.

The remaining company will also include Social Code, a social media marketing agency, which Graham said in the most recent annual report was the fastest-growing part of the entire company, albeit from a small base. Graham wrote that its revenue “almost doubled” and that it had “set ambitious plans for 2013 and beyond.” He also noted it is run by Laura Graham O’Shaughnessy, his daughter.

But there is still a sense of loss among some on the business side who were attracted to work for the company because of the mission and prestige of working for the paper. And unlike some families, said one business executive, there was never any question among the corporate children about which child was loved most.

In the April video, the family legacy literally hangs over Graham in the set of cartoons drawn by the late Herbert Block, who went by Herblock.

“A newspaper should serve as the conscience of its community,” said Graham’s grandfather Eugene Meyer, who bought The Post out of bankruptcy in 1933. Those words were written across a flag that towered over the Capitol and Washington Monument in the first of the Herblock cartoons hanging behind Graham in his office.

The second cartoon, inscribed to Katharine Graham, shows the desk of her late husband, Phil, with a note reading: “The Post is an independent newspaper . . . fixed with a love of liberty, capable of indignation over injustice, and aware of the destiny and responsibility of America as a world leader . . . ”

In the third, done after Katharine Graham’s death, an angel with a bugle hovers above a cloud next to a figure inscribing Kay’s name in a book. Above the caption reads: “Call Horace Greeley and Joe Pulitzer and the rest, and tell them she’s here.”

What this very public figure and very private person is feeling on the eve of the sale isn’t completely clear. Graham says he’s tired of talking about it and wants to leave the talking to Bezos, Weymouth and Baron. But it’s clear he’s leaving with a mixed sense of accomplishment and regret.

At one point in the April interview, there was this exchange:

Huey: “The truth is, we haven’t found very many stupid people going around interviewing for these things.”

Graham: “Yes you have. You’ve found plenty of people who weren’t smart enough, including me.”