#5172 – Jeff Bezos, Amazon, and True Facts that Sound False

Edited by Dustin LindenSmith

George Packer is one of the world’s greatest columnists and writers, and this extremely thought-provoking, long-form piece on Jeff Bezos and Amazon in a recent issue of The New Yorker is an excellent example of his careful and considered work:

http://www.newyorker.com/reporting/2014/02/17/140217fa_fact_packer

It wasn’t a love of books that led him to start an online bookstore. “It was totally based on the property of books as a product,” Shel Kaphan, Bezos’s former deputy, says. Books are easy to ship and hard to break, and there was a major distribution warehouse in Oregon. Crucially, there are far too many books, in and out of print, to sell even a fraction of them at a physical store. The vast selection made possible by the Internet gave Amazon its initial advantage, and a wedge into selling everything else. For Bezos to have seen a bookstore as a means to world domination at the beginning of the Internet age, when there was already a crisis of confidence in the publishing world, in a country not known for its book-crazy public, was a stroke of business genius.

In 1995, in Chicago, Bezos manned an Amazon booth at the annual conclave of the publishing industry, which is now called BookExpo America. Roger Doeren, from a Kansas City store called Rainy Day Books, was stopped short by Amazon’s sign: “Earth’s Biggest Bookstore.” Approaching Bezos, he asked, “Where is Earth’s biggest bookstore?”

“Cyberspace,” Bezos replied.

“We started a Web site last year. Who are your suppliers?”

“Ingram, and Baker & Taylor.”

“Ours, too. What’s your database?”

“ ‘Books in Print.’ ”

“Ours, too. So what makes you Earth’s biggest?”

“We have the most affiliate links”—a form of online advertising.

Doeren considered this, then asked, “What’s your business model?”

Bezos said that Amazon intended to sell books as a way of gathering data on affluent, educated shoppers. The books would be priced close to cost, in order to increase sales volume. After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet. (Amazon says that its original business plan “contemplated only books.”)

Afterward, Doeren told his partner at Rainy Day Books, Vivien Jennings, “I just met the world’s biggest snake-oil salesman. It’s going to be really bad for books.

Before Google, and long before Facebook, Bezos had realized that the greatest value of an online company lay in the consumer data it collected. Two decades later, Amazon sells a bewildering array of products: lawnmowers, iPods, art work, toys, diapers, dildos, shoes, bike racks, gun safes, 3-D printers. Amazon’s code of corporate secrecy is extreme—it won’t confirm how many Seattle employees it has, or how many Kindle e-readers have been sold—so it’s impossible to know for sure, but, according to one publisher’s estimate, book sales in the U.S. now make up no more than seven per cent of the company’s roughly seventy-five billion dollars in annual revenue.

I happened to come across that piece after listening to this enlightening Radiolab piece on the deplorable working conditions inside Amazon’s fulfillment centres:

http://www.radiolab.org/story/brown-box/

Bezos, whose personal net worth is over $30 billion and who personally purchased The Washington Post newspaper in 2013 for $250 million, is a data-driven control freak with a sweepingly grand vision for commerce. I must admit to getting a tiny little sick feeling in my stomach when I consider what far-reaching effects he has on our lives (the Internet wouldn’t be what it is today without him), and what long-lasting, possibly permanent effects he is likely to have on book publishing and the dissemination of information in general, in the future.Here’s a photo gallery of the inside of one of Amazon’s 1.2 million-square-foot warehouses:

http://allthingsd.com/20131223/this-is-what-it-looks-like-inside-an-amazon-warehouse-slideshow/

Some of the facts I learned in the preceding pieces sound as unbelievable as this list of true facts that sound false I learned about from Jason Kottke:

http://kottke.org/14/02/true-facts-that-sound-false

When you get a kidney transplant, they usually just leave your original kidneys in your body and put the 3rd kidney in your pelvis.

IPv6 would allow every atom on the surface of the earth to have its own IP address, with enough spare to do Earth 100+ times.

The Ottoman Empire still existed the last time the Cubs won the World Series.

If you melted down the Eiffel Tower, the pool of iron would be less than 3 inches deep (in a square area the same dimensions as the tower base).

John Tyler, who became president in 1841, has 2 living grandchildren.

Mammoths were alive when the Great Pyramid was being built.

If an atom was the size of our solar system, a neutrino would be the size of a golfball, to scale.

Humans share 50% of their DNA with… bananas.

Dustin

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