Citizen Kushner: Millionaire, 25, is New York's Youngest Media Mogul

A 25-year-old New York law student has become Manhattan's youngest media mogul, buying the newspaper best known for the Sex and the City columns that inspired the celebrated television series.

Despite not yet having completed his degree at New York University, Jared Kushner, the son of a wealthy real-estate developer, bought the New York Observer for a reported $10m (£5.4m).

The Observer, launched in 1987 by the investment banker and sculptor Arthur Carter, and printed on pink paper, has developed a reputation for gossipy coverage of New York's elites, especially the arts, city politics, media and real estate.

But with a circulation of only 50,000 and annual losses of $2m, the reputation of the weekly - which styles itself "New York's smalltown paper" - has outstripped its commercial success. Mr Carter had been looking for a buyer for months, and seemed on the verge of a deal with an investment firm founded by Robert De Niro, until it fell through days ago.

Mr Kushner has promised to guarantee the Observer's absolute editorial independence - a pledge that carries some significance given that the paper has been forthright in covering the scandal surrounding his father, Charles Kushner. Mr Kushner Sr is living in a halfway house in New Jersey, having been sentenced to two years in prison for tax evasion, witness tampering and illegal donations to the campaigns of James McGreevey, New Jersey's former Democratic governor.

In one of the most lurid aspects of the case - the kind of detail on which the Observer thrives - Kushner Sr admitted punishing his sister for cooperating with authorities by hiring a prostitute to seduce his brother-in-law, her husband. Mr Kushner had the incident videotaped, and sent a copy to his sister.

"Charlie Kushner has always believed that when an honourable person does something wrong, he steps up to the plate and accepts responsibility for it, and that's what he did today," one of his lawyers said when he pleaded guilty.

Jared Kushner said he loved his father, but insisted that the Observer deal was "about me. It is not about my father". He had been building his own fortune, he explained, since the age of 19, when his relatives put up half the money for him to buy several buildings in Massachussetts. Since then, he said in an interview with the New York Times, "I have worked to develop a separate and distinct identity in different projects I have worked on".

Peter Kaplan, the Observer's editor, welcomed Mr Kushner. "Orson Welles was 26 when he made Citizen Kane," he told the Guardian. "I think newspapers in the US are in big trouble because they're being run by old-media sensibilities and middle-aged executives who are carrying around a lot of baggage. The idea of having a 25-year-old publisher who's not slogging through the debris of the old world is a wonderful thing."

The Observer has long attempted to straddle the old and new media worlds: its typography and design consciously evoke the golden age of American newspapers, while seeking to promote what Mr Carter has called its "edgy sensibility". That sensibility may have been best captured by Candace Bushnell, who in 1994 began writing her Sex and the City column, chronicling the lives of affluent single women in Manhattan and delivering a wintry weekly judgment on the emotional lives of New Yorkers. "There's still plenty of sex in Manhattan but the kind of sex that results in friendship and business deals, not romance," Ms Bushnell once wrote. "These days, everyone has friends and colleagues; no one really has lovers - even if they have slept together."

Mr Kushner revealed little about his plans for the Observer, though he said he intended to increase traffic to its website. "We find ourselves at a crossroads in the newspaper business," he told staff in an email on Sunday. "The balance of printed and online content is undergoing an unprecedented adjustment, and the way we deliver our product - first-rate journalism - continues to evolve ... At 25 and with only non-publishing related business experience, I am now equipped with two of the finest tools that a publisher could ever have; this fine staff, and the inquisitive energy to tackle convention."

Something else about the budding tycoon appealed to Mr Kaplan, too - the kind of thing that would probably also appeal to the Observer's archetypal reader, who is equally comfortable conducting multimillion dollar property deals, contemplating a fine-art purchase at Sotheby's, or spending the evening at the Metropolitan Opera. "He understands real estate," Mr Kaplan said. "And if you understand real estate in New York, you understand everything about New York."