Amazon boss Jeff Bezos has cornered online retail, jumped ahead in artificial intelligence with voice activated speaker, Echo, carved out a powerful spot in the media industry and is even dabbling in spaceflight. He may be just getting warmed up, writes Alexander Nazaryan.
THE clouds surrounding Amazon.com are thickening, began the Washington Post article by David Streitfeld on February 21, 2001.
In the previous year, stockholders had suddenly learned that the internet was not immune to the boom-and-bust cycles of more earthbound forms of economic endeavour, and it seemed the Seattle-based bookseller was going to go the way of Pets.com, the most infamous example of late 1990s cyber hubris.
Streitfeld noted that one detractor of Amazon “expects the Internet retailer to run out of money to adequately fund its operations later this year”. Amazon did not run out of money — nor was it subsumed into a bigger competitor like Wal-Mart — but it wasn’t until 2003 that it ended a year with a profit. That milestone led The Wall Street Journal to call it “one of the most powerful survivors on the Internet”.
Today, the question is not whether Amazon can survive but whether we can survive without Amazon. It is in the pantheon of corporations we need more than we need most state agencies. Just as you can search for updates on Drake’s romantic life on Bing instead of Google or post updates about your own romantic life on Ello instead of Facebook, you can buy designer goods on Overstock instead of Amazon. But why would you?
Entirely credible reasons exist to dislike Amazon: its treatment of workers, its alleged evasion of taxes, a tendency toward monopoly. But you can’t escape it. The company is lodged deep into popular culture, a complex creature that engenders equally complex emotions, much like turkey bacon and the Kardashians.
About 12 years after The Washington Post reported on his presumed misfortunes, Amazon founder Jeff Bezos bought that newspaper from the Graham family for $250m. Some, including many at the Post, believe the purchase was evidence of his affection for the institution, evidence too of an affection for the free press he’d long held in abeyance.
Critics think Bezos intends to use the newspaper as a public relations firm on Capitol Hill. Presumptive Republican presidential nominee Donald Trump, for one, is convinced that Bezos will deploy the Post in the service of Amazon’s tax-evasion schemes. Some people much smarter than Trump believe this too.
In buying a newspaper instead of just building a palace on Mercer Island, Bezos has made a move rare for a tech titan. These demigods tend to stay away from the public square, where they fear they will be maligned and mocked, their only sins being their supreme intelligence and crystalline vision. How much derision has Elon Musk endured for his Hyperloop? Or Peter Thiel for his floating libertarian nation scheme? Dare to dream, and you will end up a caricature on HBO’s Silicon Valley.
It’s hard to call any financial decision bold when it is made by someone worth some $60bn, yet Bezos clearly entered a terra nova by taking over the Post. Even though fewer people read newspapers than before, we nevertheless value them, vaguely aware that a free press is necessary for democracy. That’s why newspaper owners often come under greater scrutiny than the owners of supermarket chains. We know they matter, even if they don’t matter as much as they used to.
Kara Swisher, the Recode co-founder many regard as Silicon Valley’s premier journalist, has watched Bezos from the start. “He’s kind of on this kick to be a better person,” she tells me. “He realises his power —that he has power.”
Though she is critical of some Amazon practices, she admires Bezos for his recent defence of free speech and journalism. “He’s enjoying the limelight a little bit more.”
The question is what that limelight will reveal, other than the obvious, laudatory stuff. In recent years, Bezos has moved well beyond selling books and backscratchers. Amazon Web Services provides cloud computing services to the CIA, while his Blue Origin company is working on spaceflight with Nasa. Meanwhile, he is turning Amazon into a movie and television powerhouse that, in time, could do to Universal what it did to Borders. (Remember Borders?) Comparisons to William Randolph Hearst are almost too obvious. “Citizen Bezos,” The New York Review of Books once called him.
Bezos is a rich person in a country that despises rich people nearly as much as it worships them. Now 52, he is no longer the ambitious quant who thought he could roll Barnes & Noble. But what is he, exactly?
Certainly not a public philanthropist like Bill Gates, who becomes an ambassador for causes he believes in, like fixing public education in the United States or improving sanitation in developing nations. Bezos is too shy for such campaigns. Yet some sense of civic responsibility seems to be tugging at him, perhaps a yearning for a legacy beyond that of the world’s greatest retailer.
The trait most closely associated with Jeff Bezos is his laugh. I don’t think it’s especially creepy or unusual, but I am clearly in the minority here. There are many, many YouTube compilations of Bezos cracking up at his own quips, his eyes widening, his body folding slightly forward. It is, to give credit to the laugh’s large fan base, one of the few I have ever heard that actually has a “ha-ha-ha” sound, as if it were reverse-engineered from the language of text messages.
Kevin Kelly, one of the founding editors of Wired, has known Bezos for many years, and he thinks the laugh is more revealing than many have grasped. “It’s not just that he has a distinctive laugh,” Kelly tells me. “It’s that he laughs a lot.”
Kelly thinks that’s evidence of a mind focused but not blinkered, still able to achieve the distance necessary for humorous reflection. “He can laugh at himself,” Kelly says. “And see himself.”
Swisher disagrees. She thinks the
laugh is a diversionary trick that happens to make Bezos appear lighthearted and fun, although he is neither. “A lot of tech people really want to be liked,” she says. “Jeff is not like that.”
Swisher adds that Bezos used to be much more available to the media, only to recede from public view in recent years, in part to spend more time with his family. His wife, MacKenzie, is a novelist, and they live with their four children in the wealthy Seattle suburb of Medina.
He rarely gives interviews anymore, and though he has publicly announced the only email address he uses — firstname.lastname@example.org — he didn’t answer any of several inquiries for this story. (He does sometimes answer Amazon customers who send him feedback or pass on their complaints to the relevant department.)
His biography can be neatly reduced to a teleological path toward Amazon, which is probably just how he likes it: Houston, Princeton, a hedge fund in New York, a move to Seattle, an obsession with the fact that, in the early 1990s, the internet was growing at the torrid pace of 2,300% a year.
The most revealing fact in the Bezos bio is that he wanted to call his company Relentless. He eventually chose the world’s largest river for his corporate namesake, but visiting Relentless.com will take you to the Amazon home page.
Most people name their companies for what their companies will sell — or for the sellers themselves. Relentless was going to describe how all that selling was going to take place. The eventual name, which is better than the original one, alludes to a river whose flow is the very definition of might: A force primal and unstoppable. Books, Amazon’s first offerings, were just a test craft sent downriver to see how it would fare on the currents.
Despite some floundering in the early years, that first boat survived. So did nearly all those that followed: toys, music, lawn furniture. Amazon is 32 years younger than Wal-Mart, but it is valued at $120bn more (Wal-Mart still sells more goods, though). As of this writing, Amazon is worth $350bn; that valuation is higher than the gross domestic product of Hong Kong.
Amazon is “the most secret tech company,” says New York Times technology columnist Farhad Manjoo, who tells me he is frequently surprised by Bezos’s moves.
The company is about as forthcoming as the Kremlin under Stalin, so that many of even the most basic questions about its operations remain unanswered, subject to amusing but unconvincing internet speculation: How many packages does it ship a day? How many Kindle e-book readers has it sold? How much of the world’s cardboard is branded with the Amazon logo?
The company’s most profitable arm is also its most discreet: Amazon Web Services, which since 2006 has offered cloud computing to everyone from the CIA to Netflix. AWS controls a third of the cloud-computing market. If it were a stand-alone company, it would be worth about $160bn, its projected value thus exceeding IBM’s market cap. Most people, though, have no idea that AWS exists, that so much of the internet’s bedrock is a Bezos property.
Lately, though, Bezos has made an important shift in Amazon’s mission. No longer a company that merely delivers stuff, Amazon is aggressively pushing into the content-creation business. It has tried this before, with Amazon Publishing, but these new ventures are far more auspicious.
At the centre of Bezos’s strategy is Amazon Prime, the membership plan that allows for free two-day delivery. Because Prime members also have free access to Prime Music and Prime Video, Prime forms a natural “flywheel” for the company, Bezos recently said. “When we win a Golden Globe, it helps us sell more shoes, and it does that in a very direct way.” There are an estimated 54m Prime members; if only some fraction of them can be drawn away from Netflix and Spotify, he will have substantially weakened his competitors.
Last year, an original Amazon series, Transparent, earned the company its first Golden Globe, though the number of shoes sold as a result is unclear (if Amazon has the number, it isn’t sharing it).
Later in 2015, Amazon won an Emmy for Transparent, also its first. That almost certainly makes Amazon the only company in the world that has won an Emmy and can sell you an Emmy: the one Dinah Shore won in 1959 ($14,995). You can buy it with a single click; or, rather, through Amazon’s patented 1-Click technology, which has itself likely brought Amazon a fortune.
“Is Amazon out to rule the world?” Bloomberg television wondered as Amazon was announcing its foray into streaming with its Fire TV streaming technology.
One of the commentators for the segment, Shahid Khan of Mediamorph, asserted that Amazon’s objective was indeed “world domination.” He made this claim with slightly disconcerting nonchalance, as if he’d already been assured of some comfortable provincial posting in the Kingdom of Jeff. But, Khan cautioned, “you cannot dominate the world if you don’t control the living room”. Bezos didn’t need the advice.
Last year, he released the Amazon Echo, a “smart” speaker that is probably the boldest foray into consumer-facing artificial intelligence yet, one that makes a mockery of Apple’s robotic Siri while raising questions about why Google — sorry, Alphabet — took so long. Gushing over the Echo in his Times column, Manjoo called it “a gadget that has the potential to become a dominant force in the most intimate of environments: our homes”.
Alexa (the name you use to prompt your Echo) has been welcomed into 3m living rooms, according to an April estimate. With 38,494 overwhelmingly positive customer reviews as of this writing, the number is probably much greater today.
Everyone loves Alexa for all the wonderful things she/it is able to do — and she/it is quickly learning to do more and more. For now, Alexa is happy to tell you a joke or read you the news, including some from the Bezos-owned Washington Post. And did you need more sesame crackers? Alexa is happy to order those. After all, she is linked to your Amazon Prime account.
“Freedom of the press,” The New Yorker ’s AJ Liebling once wrote, “is guaranteed only to those who own one.” In 2013, The Washington Post presses in Springfield, Virginia, came under the ownership of the man many in book publishing regard as Attila the Hun, only with less hair (and an endearing laugh).
The Graham family had owned the Post since 1933, seeing it through the Watergate scandal and making it the newspaper with the second-most Pulitzer Prizes in the US.
But the 2000s were brutal to both advertising and circulation, and newspapers closed all over the globe. To cut costs, the Post decided to focus on local coverage. In 2009, it closed its national bureaus, then in 2011 many suburban ones, leaving many to wonder how it was going to do coverage of any kind. Politico, the digital startup staffed by people who never slept, was quickly becoming Capitol Hill’s first read.
Upon buying the Post, however, Bezos made it very clear that his ambitions extended well beyond reporting on the city council of Takoma Park, Maryland. He has pushed the Post to become “the new paper of record”.
He has added about 100 newsroom jobs while imbuing the paper with the same “get big fast” ethos that made Amazon the world’s largest online retailer. As Gabriel Sherman noted in his recent profile of the Post for New York magazine, it runs twice as many stories on its website daily as The New York Times, despite having only half the staff.
It took nearly a decade for Bezos to turn a profit with Amazon; with the Post, rife with legacy costs like pensions, it could take a century. Since the newspaper is no longer a publicly traded entity, it does not release financial data.
Nevertheless, Sherman says its digital revenues are $60m, “far below what the newsroom needs to function”.
Using 2012 figures, he projects current total revenue to be $350m per year, with a yearly budget of $500m. You don’t need a Wharton MBA to grasp the monstrous challenge of closing such a gap without staffing cuts or making other unpleasant concessions.
Post editor Martin Baron, though, doesn’t sound like a man who is going to lay off journalists anytime soon or make them explain the news via Garfield GIFs. To the contrary, he thinks Bezos will help the paper find the Northwest Passage of journalism: That is, a path from the print revenues of old, predicated on ad sales and subscriptions, to some web-based model that doesn’t force newspapers into a desperate reliance on lowbrow click-bait.
“Something’s going to work,” he tells me.
David Streitfeld, the reporter who wrote about Amazon during the dot-com bust, left the Post in 2001 and eventually ended up at The New York Times, where he continued to cover the culture and business of technology.
In 2015, he and a fellow reporter, Jodi Kantor, published a long article that described Amazon as a “bruising workplace” of “frequent combat”, with Bezos depicted as the data-driven emperor who laughed as, all around him, grown men and women wept over brutal hours, merciless managers and other unseemly quirks of the Amazon Way. And as the Times claimed, grown men and women frequently weep at Amazon.
Amazon issued the kind of vigorous denials you’d expect from a company that employs President Barack Obama’s former spokesman. But while it’s possible to debate the merits of certain Amazon practices — like its quasi-Stalinist reliance on colleagues criticising one another — the Times hinted at a deeper suspicion that no slickly crafted press release can quite attenuate: It’s hard to be relentless without being ruthless.
And examples of Bezos’s ruthlessness abound. If you’re the vice president of European distribution logistics making seven figures, an unpleasant run-in with Bezos might fairly be considered a part of the job.
The workers at Amazon’s distribution centres, however, seem to suffer from more profound indignities, according to many reports. In 2014, Amazon achieved a victory at the US supreme court when the justices ruled unanimously that an affiliated staffing agency did not have to pay workers for the time they spent each day undergoing anti-theft screening.
Gossip website Gawker has waged a lengthy campaign against Amazon, in part by using the first-person accounts of distribution centre employees. One of these, by a worker at an Amazon warehouse in Carlisle, Pennsylvania, referred to “Herr Bezos” and broadly described the experience of working for him as a “shit sandwich”. There are legal concerns for Amazon too.
While Trump’s accusation that Bezos bought the Post to turn it into a public relations arm of Amazon has little merit, the tangerine-coloured blowhard pointed to legitimate questions about Amazon’s payment of taxes. Some argue persuasively that Amazon achieved “an advantageous fiscal position through moving its global headquarters to the small, landlocked state of Luxembourg,” effectively treating the tiny country as a tax shelter.
Amazon will deny all of the above, and it will do so with the force of a multinational corporation that has skilled public relations professionals ready to deploy counterarguments like missiles. But others will insist that the man who founded Amazon can only ever play the piranha.
The Project to Protect Ugly
Since Bezos does not often talk to the media, his interview with Walt Mossberg of Recode earlier this year was tantamount to Kim Jong Un doing carpool karaoke with James Corden.
Their discussion, which lasted over an hour, ranged widely, from artificial intelligence to spaceflight to Amazon’s first physical bookstore, which opened in Seattle last year. Bezos also spoke about Amazon’s distribution logistics, thus confirming that he is one of the very few people on earth fascinated by distribution logistics.
Bezos discussed the Post with a disarmingly old-fashioned affection. “Our elected leaders, and all the people in DC that run most of the country, need to be examined. And [the Post is] a great paper to do that.”
He made it clear that the Post was, for him, more than the sum of its woes: “I would not have bought it if it had been a financially upside-down salty snack food company.”
It had recently been revealed that Thiel, the PayPal co-founder and early Facebook investor, was financing several legal battles against Gawker, one of whose subsidiary sites, Valleywag, had outed Thiel nearly a decade earlier.
Mossberg asked Bezos where he stood on this issue — with the billionaire who shared his desire for privacy or with the website that routinely depicts Amazon as something of an abattoir. Bezos dismissed Thiel’s outrage as costly vanity, advising public figures like him to develop a “thick skin…. Beautiful speech doesn’t need protection. It’s ugly speech that needs protection,” he said, suddenly sounding more like a constitutional lawyer than a bratty tech maverick.
This impressed Swisher, the Recode founder, who is not frequently impressed by the talk of techno-moguls. “The things he said onstage were incredibly brave,” she tells me.
“Most of Silicon Valley has its head up its butt about Peter Thiel.”
She was referring, presumably, to the likes of Sun Microsystems co-founder Vinod Khosla, who tweeted that “click bait journalists need to be taught lessons”, a disturbingly Trumpian view of the press.
Trump, for that matter, seems to harbour even more contempt for The Washington Post than he does for the rest of the nation’s media outlets. Clearly aggrieved by its coverage of his campaign, he called the newspaper a Bezos “toy” and made accusations about Amazon’s business practices that were, in true Trump fashion, roughly 3% accurate.
Onstage with Mossberg, Bezos took pleasure in somberly lecturing Trump: “We live in this amazing democracy with amazing freedom of speech. And a presidential candidate should embrace that.” Several days later, Trump banned the Post from his campaign events.
Up the River Surprise seems to be a favourite Bezos tactic. In the week that I was finishing this article, news came of Amazon Inspire, “a major foray into the education technology market for primary and secondary schools,” according to The New York Times. Then, a couple of days later, Amazon struck a deal to become the sole streaming provider of nearly all PBS Kids content. The company may soon have its warehouses fully staffed by robots, which would be a perverse but effective means of addressing worker complaints.
A frenetic, ambitious energy continues to course through Amazon in its third decade of life. The company has spent some $4bn in developing a campus in downtown Seattle, yet it also recently bought a Travelodge it is turning into a temporary homeless shelter.
“One of the problems with Jeff is that he’s super complex,” says Swisher. Of course, that is also one of his virtues. Is he mellowing into a philanthropist?
Turning into a media mogul? Will he pay Amazon’s taxes? Fix its warehouse labour practices? Does he want to leave a civic legacy, or does he simply want to build spaceships to fly rich people to Mars?
These are questions not even Alexa can answer—yet.
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