< In the Empire Business

Transcript

Friday, August 09, 2013

BOB GARFIELD:  In a letter to his new staff, Jeff Bezos wrote, quote, “There is no map and charting a path ahead will not be easy.” Yeah, Jeff, they know. The very digital revolution that made you a multibillionaire has been their ongoing revenue-erasing nightmare. The moment they left the room, they, no doubt, began researching you to see if you are likely to fulfill the faith the Grahams have in you and to hope your business acumen and digital vision can provide a rescue.

In October, a book titled, The Everything Store: Jeff Bezos and the Age of Amazon will help fill in a lot of the blanks. Author Brad Stone believes that Post employees and others with a stake in profitable newspapering have some reason for optimism.

BRAD STONE:  The first thing is he really does see opportunities for reinvention everywhere. He, he thinks of the Internet as basically a big reset button for the relationship between companies and their customers, and you see that within Amazon. And I think the Post is another expression of that optimism.

The second thing I’d say is that he, he has always loved content. He's an avid book reader. He says he reads several newspapers a day. His wife’s a novelist. And so, he does have a passion for the printed word.

BOB GARFIELD:  One thing about Amazon.com, it has gone against the grain of almost every other publicly-held company in the world, in being given permission by the markets to play the long game, to not have to deliver increased earnings every single quarter. He seems to be almost unique in his ability to be trusted by Wall Street to just take his time.

BRAD STONE:  It's true. But I would point out that he sort of has earned that credibility. There were, you know, a tremendous number of skeptics about Amazon between the years 2000 and around 2007-2008, and then in about 2009-2010 they started showing big profits. And since then, they've just been pretty good in broadcasting when they’re gonna lose money, when they’re in what they call a growth phase or in an investment cycle. And so, you know, the shareholders that he has just really believe in him and believe in his vision and the long-term stuff he talks about, and they’re in it for the long run. They think he's creating the next Walmart.

BOB GARFIELD:  Newspaper economics being what they are, a short-term play is almost certainly going to be an abject failure. Do you think he has a plan or just the patience to know that if anyone can pull this job off, it’s him?

BRAD STONE:  He says that he doesn't have a plan. I think he probably has more of an idea than he’s letting on. But he has predicted that, you know, there won’t be print newspapers in 20 years. And, frankly, who thinks there will be? And it’s sort of funny, the, the chief digital officer of the Washington Post is a former Amazon guy and actually created the Prime shipping service at Amazon. So he'll let those folks experiment and grow their business, and they’ll allow them to go and kill the, the traditional Washington Post business, and that isn’t a luxury that the public companies had.

Jeff Bezos really looks up to Warren Buffett, and, and Buffet’s been buying newspapers lately and arguing that the local newspaper has this unique relationship in a community, and that nothing can replace it. You know, I think Bezos is taking that advice, and, and is gonna go and, and give the digital guys at the Washington Post a lot of leeway to lose more money in the short term, all for the reason of kind of building a new outpost on the digital frontier. I mean, look, I mean, Washington is a – it’s a one-industry town, and there are plenty of, you know, lobbying organizations and, and other entities that, that want to reach the Post’s audience. And, and Politico has showed that, right?

And, actually, I think if you’re Politico right now, you're probably little fearful because [LAUGHS] the Washington Post has just been empowered by a guy who has unimaginable wealth, doesn't care about losing money and is gonna get serious about building something significant on the Internet.

BOB GARFIELD:  Sole proprietors get into the newspaper business for a lot of reasons, including political influence. Jeff Bezos hasn't had a whole lot of political hobbyhorses, that we know of, Do you think there's anything lurking out there that he will use the Washington Post to take on?

BRAD STONE:  It's unclear to me whether in the back of his mind he was viewing ownership of the Post as a way to increase the volume of his voice in Washington. But what's certain is that Amazon is going to have many critical issues before regulators and legislators. I mean, the, the company is increasingly monolithic in, in books and in the sale of electronics and, if Barnes & Noble or Best Buy go under, we’re all gonna be talking about its market power. So owning any newspaper gives you a form of soft power and, and influence, even if you don't use it.

But, you know, Jeff Bezos is apolitical. There's not much of a record there. He contributed to a same-sex marriage ballot initiative in Washington that won. He has contributed to a few Democratic candidates, but is sort of generally thought of as a libertarian. I, I don't assume that he'll have political influence on the Post’s editorial board.

BOB GARFIELD:  He will already have a vast influence on American life and the lives of people all over the world as the man pulling the strings at the “everything store.” Are there structural conflicts of interest that are going to inevitably arise as his retail versions evolve?

BRAD STONE:  Amazon already has issues before states and, and the United States government. You know, sales tax is the biggest one. And, and [LAUGHS] Bezos’ kind of argument, at least at first, was that, you know, you needed a federal solution and they shouldn't pay taxes in states where they didn’t have physical operations.

And, of course, they did have physical operations there. You know, they, they sneak through the same tax loopholes as Google and Apple. So he’ll have to be careful – and I'm sure they know it - when it comes to advocating for those issues and, you know, where the Post editorial board and its reporters come down on those issues.

BOB GARFIELD:  He’s a prickly guy, is he not? Do you think he can engender the kind of fealty, even love, that the Washington Post journalists have for the Grahams?

BRAD STONE:  I think, by and large, Jeff Bezos has tremendous loyalty, not total but it, it was surprising to me how many people, even who spent considerable time at Amazon, felt incredible affection for him because, you know, he’s straightforward. He means what he says. You know, he's not easy to work for. He’s, he’s sort of Steve Jobs-like with his temper and with his demands, but people generally feel like he pushes them and gives them the resources to do impressive things. And so, I – you know, I have a feeling that the journalists at the Post, you know, who, like the rest of us in the media, have kind of been, you know, stirring in this pot of pessimism for so long, you know, are gonna see Bezos a - as a little bit of a relief.

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BOB GARFIELD:  Brad, thank you very much.

BRAD STONE:  Thank you, Bob.

BOB GARFIELD:  Brad Stone is a senior writer for Bloomberg Businessweek. The book title, once again, The Everything Store: Jeff Bezos and the Age of Amazon, in bookstores in October.

 

Guests:

Brad Stone

Hosted by:

Bob Garfield