When The Washington Post First Met Jeff Bezos
The announcement that Amazon's Jeff Bezos would buy the Washington Post completed a cycle begun in late 1996, when Bezos first appeared on the paper's radar screen. Seventeen years later, Bezos added the Post for his portfolio.
The announcement that Amazon's Jeff Bezos would buy The Washington Post completed a cycle begun in late 1996, when Bezos first appeared on the paper's radar screen. At that point, Amazon was a curiosity, just another one of these websites that made it into the paper's pages. Within a decade, the future paths of the two companies would be clear. Seventeen years later, Bezos' Amazon fortune was many times what he would need to pick up the Post for his portfolio.
Below are snippets from the Post's first five years of coverage of Jeff Bezon, watching with curiosity as his Amazon.com became the norm in the online world. (Emphasis added below.)
The Post learns about online shopping
- October 19, 1996. "AT&T Adds On-Line Card Protection; Firm Joins AOL in Effort to Overcome User Fear of Credit Fraud"
"This is strictly a perception issue," said Jeff Bezos, founder and chief executive of Amazon.Com, an Internet-based bookstore that handles thousands of sales a day.
"It's so much easier to go through a trash can or dumpster and get credit card numbers than it is to break the encryption schemes that are used on the Internet."
- July 29, 1997. "A New Economy Is Still Subject to the Wrinkles of the Old One"
The biggest trend in the U.S. economy for the past 20 years has been the decline of manufacturing and a corresponding shift to high-technology, retailing, finance and entertainment. Transforming the primary source of wealth from the business of making things to the business of thinking up things has meant a drastic reduction in how long it takes to get rich. It took Andrew Carnegie three decades to become a centimillionaire by making steel. It took Jeff Bezos three years by starting Amazon.com.
- August 7, 1997. "The Novelist Angle on Bookselling; Shoppers Compete Online to Add to Updike Story"
The point of a collaborative venture, said Jeff Bezos, president of Amazon, was to add an element of fun to online shopping. "People don't just go to bookstores to buy books," he said. "There are a lot of people who just like to spend a couple of hours browsing on a Sunday. The challenge for online shopping is to make it as fun as going to a bookstore."
The newspaper considers the business proposition
- July 10, 1998. "Booking the Future; Does Amazon.com Show That Publishing Clicks on the Internet?"
For the first time, nearly any book is only a mouse click and a few days away from any reader in the country. And that is changing the way publishers publish and readers read.
Only a few years ago, futurists were predicting that the digital age would be the death of conventional publishing. Text would be downloaded from a central source. Interactivity would give readers the power to customize their own plots. Anyone could be a publisher.
Instead, the hottest business on the burgeoning Internet is selling old-fashioned books -- and not just bestsellers but poetry and weighty academic tomes and forgotten treasures of years gone by.
Since Amazon is virtual, it doesn't have many of the fixed costs for real estate and employees that real-world bookstores do. It also takes advantage of its medium to allow its customers to post their own book reviews online -- which costs nothing, yet bonds its readers into a community.
But while Bezos makes all the expected noises about customers' privacy, buried away on the Web site is the "Amazon.com Bill of Rights," which notes: "We do not now sell or rent information about our customers. If you would like to make sure we never sell or rent information about you to third parties, just send a blank e-mail message to neveramazon.com."
You don't have to opt in; you have to opt out.
Amazon starts branching out
- November 8, 1998. "Looking Beyond Books; Amazon's Bezos Sees Personalization as Key to Cyber-Stores' Future"
In a wide-ranging interview with Washington Post reporters and editors last week, Bezos outlined his vision for the future of online shopping. The man who pioneered large-scale Internet shops sees bricks-and-mortar stores remaining strong for a long time, while virtual ones become smarter, more helpful and more fun.
He paints a rosy view of electronic retailing, likening it to the days before the Industrial Revolution ushered in mass production and mass merchandising, when all clothes were custom-made and small-town merchants knew what their customers liked. The Internet can bring the personal touch back to commerce, Bezos contends, only this time on a mass scale.
Amazon's home page already greets customers by name. Bezos says the page will steadily grow more personal. If you buy many bestsellers, for example, a bestseller list might appear at the top of your home page; if you never buy hardcovers, your personal recommendation list might only list paperbacks.
There will even be a "serendipity" knob you can adjust on a scale of 1 to 10 to control the amount of randomness injected into recommendations the computer makes for you. "Crank it all the way to the right, and we can show you books you are guaranteed to hate," Bezos says.
Bezos compares Amazon's efforts to collect and share personal information with the efforts of doctors who swap case histories -- all for what he calls "a common good."
- March 30, 1999. "Amazon To Offer Auctions"
"We have a large community of online shoppers and they will all be cross-registered," said Amazon's chief executive, Jeff Bezos, in an interview. Bezos said Amazon's online auction has been in the works for several months. One of the first items up for bid will be a 1964 Corvette, he said.
- September 30, 1999. "Amazon Opens Site to Merchants; For Monthly Fee, Retailers Can Join ZShops Online Mall"
"What's different about this service is the selection is all organized, and there is a uniform way of buying everything," Amazon chief executive Jeff Bezos said in a telephone interview. "We have asked our customers what they want, and one thing people said is they want one single place they can come to get the biggest selection on Earth."
Profitability questions arise
- September 24, 1999. "Amazon's Growing Pains; Web Retailing's Future Blurs as Industry Evolves"
Amazon's market capitalization -- the number of shares outstanding times the price per share -- is $ 21 billion. That's five times what it was a year ago, when a Merrill Lynch & Co. analyst wrote that Amazon would lose only $ 88 million in 1999 and be well on its way to profitability. Instead, it will likely lose three times that, with profitability nowhere in sight.
Amazon chief executive Jeff Bezos wasn't available for comment, but he's said many times that "it would be a mistake to be profitable now."
- October 10, 1999. "Buying Net Stocks In a Bundle"
At a recent meeting of Internet executives in California, Amazon.com Inc. founder Jeff Bezos took the stage waving a thick printout of the names of hundreds of companies from the 1920s. Most had the word "motor" in their names, all were caught up in the car craze, and of the lot of them, only two or three exist today.
If you had invested a dollar in each one, Bezos calculated, you'd still be in the red. That's what's going to happen to the Internet economy, he predicted, only faster. Of the hundreds of Internet companies now, 10, 20 maybe, will survive.
- November 22, 1999. "At Amazon.com, Service Workers Without a Smile"
While technology has helped eliminate the tedium in many fields, most of the jobs created in the New Economy are low paying, low skilled and monotonous. "The attention paid to 28-year-old tech tycoons has created the illusion that they're ubiquitous," said David Smith, the director of policy for the AFL-CIO. …
The top of the hourglass comprises the celebrated Internet magnates, splashed weekly on magazine covers, and typified by Amazon founder Jeff Bezos, who owns more than $ 4 billion in Amazon stock. The middle level, meanwhile, has thinned steadily in the last two decades. The lower level includes the group that a front-line Amazonian calls "us digital peons," the troubleshooters who answer e-mail from customers.
- February 3, 2000. "Amazon's Losses Grew Last Quarter; But Customer Base, Sales Increased"
Amazon.com yesterday reported record losses for the last quarter of 1999 but said that both sales and the number of new customers soared. The company predicted it would move toward profitability this year.
"As we exit 1999, we believe we have reached a tipping point in this business," chief executive Jeff Bezos said.
- February 6, 2000. "Venerable Amazon As a Model"
For a while, Wall Street thought Amazon's founder, Jeff Bezos, had a bit too much courage. The company's revenue growth was staggering. But so were its losses, thanks in part to thermoses. And profits were a distant shore.
So the stock stagnated for months until last week's Amazon results announcement, where Bezos's forced confession--that he really is aiming for a profit next year--was the highlight.
- June 3, 2000. "At BookExpo, Reading Between The Onlines"
He added, "The physical world is still the best medium ever invented." In the next couple of decades, Bezos said, "The prospect for bookstores is good."
But with the coming of e-books--paperless books read in electronic fashion--what will happen to bookstores? Bezos took a breath. "I'm not sure what the prospects are," he said.
- June 28, 2000. "Amazon's Hottest Product: Skepticism; Online Retailing Model Questioned"
By last December, less than five years after former Wall Street executive Jeff Bezos launched his Web site, he was Time magazine's "Person of the Year." Bezos was widely viewed as someone who would ultimately be recognized, as one analyst told Time, as the developer of "one of the smartest strategies in business history."
Six months later, that halo is gone. Amazon stock has fallen by more than two-thirds, and some observers even question whether it will survive without a shotgun marriage to a deep-pockets partner. It's not a profitable company, won't be one any time soon and has $ 72 in debt for every active customer.
Even Bezos concedes that this territory is unknown, and maybe even unknowable. "We were hoping to build a small, profitable company, and, of course, what we've done is build a large, unprofitable company," he said in a recent interview.
The view that Amazon is not getting it right the first time received a major boost last week, when Lehman Brothers bond analyst Ravi Suria issued a devastating report. Amazon, he said, has a "weak balance sheet, poor working capital management, and massive negative operating cash flow--the financial characteristics that have driven innumerable retailers to disaster throughout history."
- June 29, 2000. "Amazon CEO Defends Strategy"
Amazon.com's chief executive fought back today against criticism that the Internet superstore's business was in trouble, saying the company can easily raise cash and some of its divisions would be profitable this year.
He declined to say when the company as a whole would make money.
Eighteen months later, it did. Today, that guy bought this paper.