July 27, 2017

Bezos just became richer than Gates.

He's now the richest person in the world, the NYT reports.
Forbes now estimates the wealth of Mr. Bezos, currently Amazon’s chief executive, at about $90.6 billion, compared with $90 billion for Mr. Gates.

Mr. Bezos has added tens of billions of dollars in wealth — at least on paper — over the last year as Amazon shares surged more than 40 percent during that time period....

According to a filing with securities regulators in April, Mr. Bezos holds nearly 81 million shares of Amazon — almost 17 percent of the company. Forbes also estimates the value of his other investments — including his ownership of The Washington Post and the rocket company Blue Origin — and cash from the sale of securities as part of its wealth calculations....
In this light, what explains the pay wall at The Washington Post? Isn't owning that, for him, something to do to influence what people think? Why make it harder to read? Ah, if I understood stuff like that, I'd be wealthier myself. I'm going to assume he's one of those people who are excited about money as money and love bigness as bigness. How big can it get? It's an orientation.

UPDATE, later the same day: Gates pulled back ahead of Bezos.

94 comments:

brylun said...

Scrooge McDuck...

Sebastian said...

"How big can it get?" Though scaling up obviously matters, I doubt bigness as such drives Bezos. It is the bonus for doing some things distinctively better. He's thinking hard about transforming whole industries. In some ways he seems to be transforming the idea of a business, by not maximizing profit. Free access to WaPo would fit his MO, but I doubt it's high on his agenda.

brylun said...

Scrooge McDuck

Seeing Red said...

Yup? He should walk his talk, but he won't. Time to bust Amazon up.

Nonapod said...

Bezos is more and more like a Bond villian every day.

I'm going to assume he's one of those people who are excited about money as money and love bigness as bigness. How big can it get? It's an orientation.

Yeah, personalities like that are probably rare. There's some point when you're so far beyond so called "FU money" even with an absurdly high standard of living expectation, some point where money is like a score in a video game, where the actual motivation for continued accumulation of it is purely an exercise in pride.

Seeing Red said...

Bezos has a phone and a pen. What's to think about? It's a binary decision.

brylun said...

Trump's proposal to tax the wealthy (>$5M/yr) 44%.

bagoh20 said...

Not know who he is and you wouldn't let him buy you a drink. Find out who he is, and the "ladies" start throwing punches to win the right to felate him in the toilet. "It's good to be the king."

Ignorance is Bliss said...

I'm going to assume he's one of those people who are excited about money as money and love bigness as bigness. How big can it get?

Yuge

iowan2 said...

"Time to bust Amazon up"

Having a hard time understanding what market monopoly Amazon owns? Wal-Mart is number two, The had a monopoly until Amazon.

The point is, competition exists.

I'm so old I remember when the sage experts advised not to invest in Amazon, as they had never turned a profit.

Second point. Amazon's success came with the proportional probability of failure.

Nonapod said...

Wal-Mart is number two, The had a monopoly until Amazon.

Technically Alibaba is currently number one.

David said...

Part of the secret of getting and staying rich is to focus on the stuff that enriches you. Whether or not Wapo has a pay wall is nowhere in his list of priorities, I suspect.

tcrosse said...

The Guardian makes do without a paywall, which would defeat its purpose: "...we want to keep our journalism as open as we can". They do solicit donations.

David said...

"Having a hard time understanding what market monopoly Amazon owns?"

No monopoly. But they are dominant in internet retail. The key to antitrust is determining what the market is. I am grossly oversimplifying but a clever lawyer can make a good case.

They are making the most money in web services, or at least have the most growth. That is a competitive market, at least so far.

David said...

44% over $5 million per year? Stupid. It will distort business planning and decisions, and mostly penalize the people who have a one time windfall. The really endlessly rich will sail along above it all.

Sebastian said...

"as they had never turned a profit." But now they have! 8 straight quarters! Imagine that! (Thanks to, you guessed it, cloud computing.)

Forbes: "The Amazon Era: No Profits, No Problem. There is a new calculus in corporate boardrooms. Profits are so yesterday. Now it’s all about vision and great storytelling."

Which isn't to say that future monopoly rents are out of the question. Clearly, some investors are hoping for it.

Left Bank of the Charles said...

Gates retired and Bezos kept working.

California Snow said...

I do think at a certain point you've made enough money.

Luke Lea said...
This comment has been removed by the author.
Luke Lea said...
This comment has been removed by the author.
Luke Lea said...

And to think it was all made possible by a patent on one-click ordering. Freedom from state and local sales taxes and federal subsidies on packages delivered by the U.S. Post Office have also helped.

Paddy O said...

"Isn't owning that, for him, something to do to influence what people think?"

What people? Or rather, which people?

That's the key bit. He's doesn't have to influence all the people by owning the Washington Post. It's targeted and if that's the goal, then no reason not to make extra money here and there.

Amazon is one of the best examples of knowing how to ride current trends and technology. Easy to use website, and excellent customer service that grew step by step over the last couple of decades rather than starting too big.

Paddy O said...

"Freedom from state and local sales taxes"

This is only the case in states where Amazon doesn't have a distribution center or other kind of presence. Used to be the case in California, which was a big reason I got to using Amazon, but not the only reason. No longer the case, and I still use them.

narciso said...

How about that 600 million contract with the via, a bit of a conflict of interest

Rusty said...

Wealthier.

wwww said...



Isn't owning that, for him, something to do to influence what people think? Why make it harder to read?


He doesn't care what you think as long as you use amazon and/or amazon products.

Rusty said...

brylun.
An economic falacy.

Unknown said...

I thought Fox News & Breibart News are the foundational material for this blog. Why would Trump followers need to waste time reading WaPo and NYT and watching MSNBC and CNN. Some weird behavior on this blog.

Oh, I get it. Trump'ers need to understand what the enemy is thinking, post about it on the blog, comment about it and laugh at all those idiot liberals, lefties, progressives.

Simple but ok.

buwaya said...

I've thought for a long time now that Mr. Trump should have a chat with Mr. Bezos. Ask him what he actually wants, or fears.
Why has he set his dogs to barking?

Neither is clear to me. Perhaps that is why I am not as rich as Bezos.

David53 said...

"What explains the pay wall at The Washington Post?"

People are willing to pay for it, so why not? Amazon stock doesn't pay dividends either, why should it? People keep buying it anyway. I bought some last month, glad I did. If you had bought some AMZN in 2016 you would have about doubled your investment.

R.J. Chatt said...

Making the WAPO free, because Bezos wants to influence more people, and since he is so rich so he could afford it, would be too obvious. The Washington Post has to have at least the semblance of being a legitimate news organization, or it loses all credibility. However, looking at the front page on the web here's a sample headline: "How Trump’s delusions of voter fraud will turn election results into fake news" Laughable really.

exiledonmainstreet said...

Unknown said...
I thought Fox News & Breibart News are the foundational material for this blog."

You thought wrong. As usual.

You are now reduced to standing up in your high chair, screaming "Mommy, Mommy, look at ME!!"

tcrosse said...

Sure, Bezos has a lot of money, but he doesn't have all of it.

stlcdr said...

If you have to pay for it, then it must be worth something?

Unknown said...

Started in 1993, son of single mom @17, step-dad Cuban immigrant climbed the ladder in Exxon as a PE.

He's super smart, gets it right away, thinks different. Invented the Cloud.

I'd posit he is motivated by changing the world: building the future rather than keeping score.

FullMoon said...

Whenever WalMart wants to open a new store, union and leftist protesters delay it as long as possible with the same arguments, wages too low, undercuts and eliminates local business. etc. Never mind that WM caters to people who need to get the most value per dollar. Like me, most commenting here will spend extra for convenience rather than drive across town to save a few bucks.

Amazon has done more damage to small local business, as well as large retailers, than WM will do. Lefists protesting WM are shopping online and contributing to the demise of locals with no sense of guilt at all.

The "compassionate" commenters here shop online for savings and convenience without a second thought, perhaps rationalizing that doing so helps to destroy the "evil WalMart"

Also, the "compassionate" here seem to suffer a lack of compassion for the evil right commenters who are too ignorant to understand the correct point of view.

Phil 3:14 said...

"what explains the pay wall at The Washington Post?"

Capitalism 101.

buwaya said...

What Bezos wants out of Washington is perhaps a better way to put it.

Protection from anti-trust?
Protection from regulatory entrepreneurialism? (people do go hunting for regulatory opportunities, it makes careers and whole industries catering to the new rules)
Something(s) else?

All the above is not clear, it is speculation, but there is obviously purpose.

It all seems an opportunity to make a deal.

Sebastian said...

WaPo investment is protection money.

Just in case some prog comes along and tells Jeff, "You didn't build that." Or, "Shame if somebody would propose a 10% federal tax on your transactions."

Karen said...

A good friend whose opinion I trust recently told me that Jeff Bezos is the best leader he has ever seen. My friend has worked for Amazon for a number of years and has seen the business through different filters according to the division that he's been working in. He seems to feel that Bezos is working towards goals that will make life better for all. Of course I realize that sounds a bit utopian, but it would certainly be nice if it were true.

Karen said...

And, of course, I should mention the number of people with you on the Amazon shopping has made it possible for many poor people who live in out-of-the-way places to have a much better Life because more goods are available to them at a lower cost and without shipping fees.

johns said...

Seeing Red said "Time to bust Amazon up."

Possession of market power (monopoly power) is not illegal if the market power was not obtained through anticompetitive means. Now that Amazon has market power, mergers can be denied if they would increase market share significantly.
I wonder if an antitrust case could be made against Amazon. Maybe the one-click ordering patent could be argued to be an anticompetitive exclusionary tactic. Maybe they could go after the contracts Amazon has with some of its suppliers, especially if they are exclusive the way Microsoft's are.
These seem too weak at the moment, but if Amazon grows still more dominant, the pressure to go after them will be pretty high.

Unknown said...

Paywalls

Fernandinande said...

brylun said...
Scrooge McDuck


Hank Scorpio
"I'm having a little trouble with the government."

grackle said...

In this light, what explains the pay wall at The Washington Post? Isn't owning that, for him, something to do to influence what people think? Why make it harder to read?

Alternate scenario: Bezos buys Post, immediately kills the pay wall. Not good for the competition. The newspaper industry, already declining, is made to decline even more, as they get fewer and fewer online subscribers. Bezos is hailed as the most influential newspaper publisher in America, adding another achievement to his list.

But if I were Bezos and wanted to use the Post to help bring Trump down I might not want to attract too much attention. I would want readers to see the usual Post with the usual pay wall, which is ubiquitous in the industry. And if I really wanted to harm Trump I might not want to damage the main organs, the newspapers, which are the source for most anti-Trump fake news, irregardless that they are competition.

CNN, MSNBC, etc., rarely originate their political “news.” They depend heavily on material first published by newspapers. And the print journofucks yearn for face-time on the flat-screen. That’s one of the reasons a camera-free Whitehouse press briefing causes such consternation. The sound-bites are important to them. They need images of their numbskull talking heads and print journofucks looking like real journalists. And personifying The Resistance for their liberal viewer-bases and readerships. The pinnacle of success for both talking whore and journofuck is membership on one of the Sunday morning panels.

This incestuous relationship creates a bubble of befuddlement. Neither the largely uninformed liberal base nor the MSM can figure it out. How come Trump is still there? They’ve huffed and they’ve puffed and Trump won’t blow away …

Sam's Hideout said...

An old aerospace business joke:

Q: How do you make a small fortune in aerospace?

A: Start with a large fortune.

I suspect someone approached Bezos to buy the Washington Post to keep it going, there haven't been major changes to it since because improving it is really low on his priority list. He's got a lot of businesses percolating under the Amazon banner, not the least of which is the Whole Foods acquisition.

Big Mike said...

“I want to be clear, we're not trying to push financial reform because we begrudge success that's fairly earned. I mean, I do think at a certain point you've made enough money."

Said a man Bezos supported (and apparently still supports).

Bruce Hayden said...

"And to think it was all made possible by a patent on one-click ordering. Freedom from state and local sales taxes and federal subsidies on packages delivered by the U.S. Post Office have also helped."

A lot of it though is due to the network effect. They get the business because they are the biggest, which means that they just get more of it, and get even bigger. Anymore, I go there first, because that means less shopping, and just look for the best price that has the Prime symbol, for the free shipping. I could check other sites for better prices, but why bother? I rarely find better prices elsewhere, which means that Amazon just gets bigger and bigger.

What competitors need, to compete with Amazon, is some place where they can show an advantage. Not easy to do - but I think that the quality is slipping a bit. For example, I seem to routinely now finding myself with essentially fraudulent delivery dates. Sure, you get 2 day delivery with Prime shipping - but that only counts after the product is actually shipped, which seems to mean a week or so later. Had one order go most of a month last year. Before being shipped - but it was delivered, on schedule, two days later. I have to think that there are a lot of Amazon Affiliates there practicing JIT (Just In Time) inventory control, or worse, possibly not even purchasing the products they are selling until they get purchasers for such. So, I am on the way to the Post Office to pick up a rubber rake (for pine needles on my roof) that I ordered a week and a half ago. I just factor in the slow shipping to my purchase decisions.

buwaya said...

"They get the business because they are the biggest, which means that they just get more of it, and get even bigger. "

Their competition will only come from something as large or bigger.

Ali Baba maybe.
Their international consumer site -
http://www.aliexpress.com/

Note, in a very Bezos-like move, they bought the South China Morning Post two years ago.

rcocean said...

I always find it humorous the way average people sympathize and identify with Billionaire lefties like Bezor or Soros.

No one's mentioned that Amazon warehouse's are terrible places to work or that Bezos' supports importing H-1B labor. When criticized for it, Bezos has said the workers can quit anytime they want - in other words - fuck you.

Evidently, despite having $80 Billion, he's willing to screw his workers over if he can increase his wealth by .0000001 percent.

And that's OK with everyone.

Bruce Hayden said...

"Possession of market power (monopoly power) is not illegal if the market power was not obtained through anticompetitive means. Now that Amazon has market power, mergers can be denied if they would increase market share significantly.
I wonder if an antitrust case could be made against Amazon. Maybe the one-click ordering patent could be argued to be an anticompetitive exclusionary tactic. Maybe they could go after the contracts Amazon has with some of its suppliers, especially if they are exclusive the way Microsoft's are.
These seem too weak at the moment, but if Amazon grows still more dominant, the pressure to go after them will be pretty high."

It isnt just creation of a monopoly through anticompetitive means that is illegal, but also maintenance of such through anticompetitive means that is too. And that is really usually more of an issue.

Here is an example - almost 20 years ago, I interviewed with a major software company for a job as a patent atty. During the interview, they showed me their latest shrink wrap license, and asked what I thought of it. It had a mandatory patent licensing provision in it, that I pointed out was very likely a Sherman Antitrust Act Monopolization violation (if you used their, ubiquitous, software, you granted them a paid up, royalty free, license to your patent portfolio). They seemed to think that I was crazy there, and I didn't get the job. Shortly thereafter, the Feds took notice, and that provision was quickly withdrawn (but they were still sued for antitrust by the DoJ later). What struck me was that their attys were not getting any antitrust training, which at that time was mandatory for ALL new IBM attys (I was working with some of such at the time in a joint venture). I chalked it up to the difference between a new monopoly and an old one.

John said...

But he only pays taxes on less than $4mm of annual income.

Sweet! $1.5million in htaxes on $90 billion of wealth.

That's the American way.

God bless Jeff bezos.

John Henry

Joaquin said...

He didn't build that!!!!

David said...

Carl Qunitinella has posted Twitter today that Bezos' Amazon stock has appreciated about $60 million per day over the past two years. Also says that at the low today (Amazon is selling off with other high fliers) he had lost about $2.9 billion today.

The value of scale.

On the other hand, the stock is at about 200x current earnings. More room down than up by any historically conventional measure.

Bezos got rich by not being historically conventional.

David said...

Some estimates are that Putin has $200 billion that he has skimmed from the Russian economy.

Bezos, you piker!

David said...

"How big can it get?"

The very question Adam and Eve were asking.

They got their answer more rapidly.

Kevin said...

So the richest man in the world controls a media corporation in direct opposition to the legally-elected democratic government of the country...

...and the Democrats cheer.

exiledonmainstreet said...
This comment has been removed by the author.
Nonapod said...

In order for Alibaba to compete with Amazon in the West they'd have to build up a massive distribution system over here that's on par with Amazon and focus much more on a site that's B2C. Their current sites are too B2B focused which many western consumers find confusing (how come I have to by 100 of these things? Why can't I just get 1?). In essence, they'd have to out-Amazon Amazon. If anyone could do that, Jack Ma probably could, but it'd require a massive risky investment on their part.

exiledonmainstreet said...

"No one's mentioned that Amazon warehouse's are terrible places to work or that Bezos' supports importing H-1B labor. When criticized for it, Bezos has said the workers can quit anytime they want - in other words - fuck you."

He is a "progressive" who owns the WaPo, so his workers could be laboring in 19th century sweatshops and the left wouldn't care.

Unlike 19th century robber barons, today's billionaires have figured out that the way to get leftists to leave you alone is support Dem political candidates and causes like global warming and own a leftist media outlet. Quite smart of them, actually.

FullMoon said...

Karen said...

And, of course, I should mention the number of people with you on the Amazon shopping has made it possible for many poor people who live in out-of-the-way places to have a much better Life because more goods are available to them at a lower cost and without shipping fees.

7/27/17, 12:00 PM


Definitely a plus. And for elderly who have a hard time getting around. Online shopping is the future, no doubt. I have had stuff delivered on Sundays. Amazon, paypal, debit cards,self driving electric vehicles, solar and wind power are like the early 1900's with automobiles and electricity. Some resist and say it will never happen, while it is happening.
My personal battle was with using debit card for local small purchases. Finally gave in after taking last several hundred dollars in change to the bank.

John said...

Blogger brylun said...

Trump's proposal to tax the wealthy (>$5M/yr) 44%.

That's not taxing the wealthy. That is taxing the high income. There are plent of people with high income who are not wealthy.

There are also plenty of people, like Bezos and Buffett, who are very wealthy but have relatively low incomes. Low relative to the wealth, that is.

President Trump's proposal will not touch Bezos.

John Henry



7/27/17, 9:41 AM

buwaya said...

"solar and wind power "

No, these are the same-old. You plug your stuff into the wall. The only thing these change is what tech is putting electricity into the grid. And there are already a large number of generation technologies in use.

John said...


Blogger Sebastian said...

"as they had never turned a profit." But now they have! 8 straight quarters! Imagine that! (Thanks to, you guessed it, cloud computing.)

Profits are taxable. Far better to grow non-taxably than to make a profit and pay taxes.

John Henry

David said...

"President Trump's proposal will not touch Bezos."

It hit's the one time payoff person most. Those who sell a business or a farm, and don't have tax advantaged investments.

Buffett has one of the best personal tax shelters ever devised. Trump's proposal will greatly benefit him. His Populist Hero posture is a sham.

David said...

"Profits are taxable. Far better to grow non-taxably than to make a profit and pay taxes."

Lotsa loss carry forwards at AMZN. They are still not paying.

I actually do not mind that. His take losses and add value scenario is very hard to copy.

John said...

Blogger rcocean said...


No one's mentioned that Amazon warehouse's are terrible places to work

Ever been in a fulfillment warehouse, RC? Or a distribution center or any other kind of warehouse? They are all terrible places to work. At least looking at them from our lofty perches.

Looking at them from the standpoint of people who have no skills, they are pretty good jobs. I've never been in an Amazon WH but I understand that as these things go, they are better than most.

And Bezos is working hard to eliminate all these terrible jobs with robots. "No man, no problem" I am sure you remember who said that. Right?


John Henry

David said...

"And, of course, I should mention the number of people with you on the Amazon shopping has made it possible for many poor people who live in out-of-the-way places to have a much better Life because more goods are available to them at a lower cost and without shipping fees."

The poor are using Amazon Prime? Not likely. In fact the really poor can't use Amazon because they lack credit cards.

Crazy Jane said...

Here are a couple monopolistic policies.

1)Control of almost 50 percent of online sales in the US. That crowds out a lot of potential upstarts. Prime helps because it keeps buyers loyal to Amazon.

2)Running virtually all the bookstores out of business and then introducing Kindle, which allows you to buy books for that single device but no other and which does not accept online book purchases by competitor B&N's Nook. THEN introducing his own bookstore with lower prices for Prime subscribers than other buyers.

In addition, Amazon is so rich that it can tap investor money to do anything -- buy out all the grocery stores, buy its own fleet of delivery planes (challenging USPS, UPS and FedEx), get into the film production game.

Its spread is so wide that it has Nike coming begging for distribution. It has Eddie Lampert choosing Amazon to distribute Sears' appliances instead of teaming with also-sagging J.C. Penney or the relatively well-run Best Buy.

Bezos himself can buy one of the two most politically influential newspapers in the country for pocket change, and he did. If you thought Carlos Slim as the largest NYT shareholder was bad, isn't this worse?

Yes, Bezos is smart and yes, American business has benefitted from his new thinking. But also yes, there need to be limits.

buwaya said...

Aliexpress (not the Ali Baba wholesale site) is intended to be mainly b2c, depending on the very cheap postage direct from China (distribution centers are there I guess).

The big problem with this system is slow delivery.
You will find a lot of the same aliexpress vendors on ebay, using the same direct shipment.

Its not perfect.

buwaya said...

True, the very poor are also locked out of Paypal, ebay(mainly), etc.

FullMoon said...

buwaya said...

"solar and wind power "

No, these are the same-old. You plug your stuff into the wall. The only thing these change is what tech is putting electricity into the grid. And there are already a large number of generation technologies in use.

7/27/17, 1:07 PM


May not live to see it, but I envision backyard power plants, somehow, someday.
Meanwhile, when the solar salesmen show up every nine days or so,, I turn them down, point to the neighbors house, and say "That guy was just talking yesterday about getting solar". Small amusements make life worthwhile sometimes.

David said...

"No one's mentioned that Amazon warehouse's are terrible places to work."

So you say. But people stand in line to apply. It appears that starting wages are about $12-13/ hour in warehouses. Could not find data for all warehouse employees on average, but numerous sources say that Was-Mart hourly fulfillment employees average about $19/hour. Can't imagine Amazon gets away with much less.

It's very attractive to people who want part time work. Not so much for people who want full time and are only offered part time.

Benefits look decent for those who qualify. https://www.amazon.jobs/en/benefits It's not in Amazon's interest to have high turnover, so probably more qualify than you would think.

FullMoon said...

The poor are using Amazon Prime? Not likely. In fact the really poor can't use Amazon because they lack credit cards.

7/27/17, 1:14 PM


Correct. And, no bank account connected to a debit card.

David said...

Aliexpress (not the Ali Baba wholesale site) is intended to be mainly b2c, depending on the very cheap postage direct from China (distribution centers are there I guess).

The big problem with this system is slow delivery.


And trust. I will not buy online from outside the USA. Especially Alibaba which lacks track record.

buwaya said...

"I envision backyard power plants, somehow, someday."

You can get them now. The diesel generator is ubiquitous in third-world (and US) off-the-grid situations.
As is the solar power system (also for those off the grid situations).
Both have been available for a very long time.

FullMoon said...

So you say. But people stand in line to apply. It appears that starting wages are about $12-13/ hour in warehouses. Could not find data for all warehouse employees on average, but numerous sources say that Was-Mart hourly fulfillment employees average about $19/hour. Can't imagine Amazon gets away with much less.

It's very attractive to people who want part time work. Not so much for people who want full time and are only offered part time.

Benefits look decent for those who qualify. https://www.amazon.jobs/en/benefits It's not in Amazon's interest to have high turnover, so probably more qualify than you would think.


Would be more inclined to think Amazon decent to work for than any sort of sweat shop. Hypocrisy of left, in my opinion, is Amazon killing local jobs, and that Amazon will run huge distribution centers with minimal human involvement. The guy on the forklift pulling merchandise will be replaced by a robot.

buwaya said...

" I will not buy online from outside the USA"

I do, all the time. Ebay mostly, but the sellers of new goods are pretty much the same people as Ali Baba. And Ali Baba has a long international track record.

David said...

"Yes, Bezos is smart and yes, American business has benefitted from his new thinking. But also yes, there need to be limits."

Ah yes, limits. Set by government which is going to be in thrall to his competitors.

We all love limits, especially when we get to limit others who are too successful for our tastes.

David said...

buwaya said...
" I will not buy online from outside the USA"

I do, all the time.


Let me put it differently. I do not need to buy from outside the USA, so why take the risk? My limited transactions through Ebay have not been stellar.

Plus no Althouse Portal.

Left Bank of the Charles said...

From a business point of view, Bezos would need to calculate:

(A) Fees collected from the pay wall.
(B) Additional ad revenue from increased traffic if pay wall is taken down.
(C) Value of additional people reading and being influenced by content that is now behind the pay wall.

The rational decision is that if (A) < (B) + (C), then Bezos should take down the pay wall. The fact that he has not implies that (A) > (B) + (C).

Note that A is known while B and C are conjectural. A is the hard number.

In the old media world, paid subscriptions commanded much higher ad rates than free subscriptions. My brother once had a temporary job for an audit firm following homeless people around Denver to check if they charged for the newspapers they were given free to distribute so long as the sold them, which the newspaper wanted to count as paid sales. In general, the homeless people did sell or trade them, they were effectively getting a 100% commission. If that principle carried over to the pricing of web ads, B may be negative, as ad revenue might go down were the pay wall to be removed.

It might seem that C is strictly vanity value, but GE bought NBC back in the 1980s in part on the basis of value in the C category - that's how Tim Russert became an important corporate asset to GE. Also, C might have a higher value if the U.S. had a Democratic administration. It tells us something that, for all the complaints about the liberal bias of the mainstream media, conservatives don't seem to put enough value on C to invest in more conservative media outlets.

I would also think that most of the C value is locked up in a small portion of the content, such as the editorial columns, so Bezos could let that through the paywall for free while still charging for other content. But what if that is the content people are willing to pay for?

David said...

In January 2017 Amazon announced that it planned to hire 100,000 full time equivalent positions in the USA by mid 2018. Total employment was over 250,000 at the time of the announcement, and was recently announced to exceed 315,000. They are on their way to in excess of 400,000 employees.

This is just the direct employment, Tens or hundreds of thousands more are building their warehouses, providing technical services, delivering their packages, designing Bezos' spaceships etc etc.

This is by any measure a positive development. And you can not outsource many of these jobs. They have to be near the customers and suppliers.

Envy and fear overwhelm reason when a dynamic force like this comes along.

David said...

From a business point of view, Bezos would need to calculate:

(A) Fees collected from the pay wall.
(B) Additional ad revenue from increased traffic if pay wall is taken down.
(C) Value of additional people reading and being influenced by content that is now behind the pay wall.


Do you really think he is paying personal attention to this? Someone is, but they are going to take initiative and report to Bezos, not take direction from him at the micromanagement level. This is micromanagement.

Gahrie said...

The guy on the forklift pulling merchandise will be replaced by a robot.

Already has.

https://youtu.be/cLVCGEmkJs0

FullMoon said...

David said...

In January 2017 Amazon announced that it planned to hire 100,000 full time equivalent positions in the USA by mid 2018. Total employment was over 250,000 at the time of the announcement, and was recently announced to exceed 315,000. They are on their way to in excess of 400,000 employees.


That is a good thing. It is the future. I would like to see these futuristic employers provide jobs for average people like the old assembly line or factory jobs where a high school drop=out or graduate could start entry level and work up to being middle class simply by being competent and putting in the time.

Crazy Jane said...

David said:

We all love limits, especially when we get to limit others who are too successful for our tastes.


Yes, government is too willing to accommodate donors and cronies and too subject to regulatory capture, but consider this: When Amazon controls more than, say, 75 percent of all on-line sales, what is to stop it from tripling fees to invisible AWS participants who have no other way to reach their markets -- or from acquiring those companies outright at very low prices? Will (Does) Amazon's lowest possible shipping rates from UPS, FedEx and its own delivery systems not create a pricing advantage that no other online retailer can match? Will there be any incentive for Amazon to maintain customer service when no other company can raise enough capital to compete for even a sliver of its business?

Think about the post office, but with those smile boxes. Do you want more of that?

Rockport Conservative said...

I kick myself everyday for subscribing to the WaPo. I usually count the anti-Trump screeds as my excuse for continuing to subscribe. It is a real piece of trash in its present form. But for only $9.99 per month I can subscribe and pay through Bezo's Amazon. How dumb am I? Pretty damn dumb.

Jim at said...

"Oh, I get it. Trump'ers need to understand what the enemy is thinking, post about it on the blog, comment about it and laugh at all those idiot liberals, lefties, progressives."

Once again, you're finally starting to get it.
Knowing what my sworn enemy is thinking and doing.

Took you long enough.

Jim at said...

"Whenever WalMart wants to open a new store, union and leftist protesters delay it as long as possible with the same arguments, wages too low, undercuts and eliminates local business. etc"

They hate Wal*Mart for one reason and one reason only:

It refuses to unionize.

That's it. Nothing more.

SukieTawdry said...

Does Bezos know he didn't build that? And where would his business be without all those roads and highways we chose to build together?

Progressives blather incessantly about the wealthy needing to pay their fair share, but they always fall short of calling for a wealth tax. Why is that?

I'm a good Amazon customer and have an Amazon Card and they treat me like a queen. What's not to like? They do need to work on their packaging, though. I get a lot of small items in oversized boxes. It's very wasteful in a number of ways (and, yes, I do recycle the boxes).

I wish I had a viable business plan for brick and mortar retailers because they're still very necessary, but I don't. I also don't have a viable business plan for the WaPo and the rest of the print media. But, apparently, neither does Bezos.

There's an enormous Amazon distribution center (excuse me, fulfillment center) in Patterson, CA, that you can see from I-5. I can't imagine how many loading docks it must have. The funny thing is that no matter what time of day or night I've driven past, there's never been even one truck backed up to one dock. When the heck do they do their distributing (excuse me, fulfilling)?

John said...

Jim,

It is not Walmart that refuses to unionize.

It is the Walmart employees who refuse to unionize.

Rvery time the vote on whether yo join a union, they vote no.

John Henry

Rusty said...

"May not live to see it, but I envision backyard power plants, somehow, someday."

I think the name of the company is Ballard Power Systems. They have a strong presence in Europe. Instead of hydrogen they have developed a methane based fuel cell.basically turning methane into electricity through a catalyst. No moving parts.

I Have Misplaced My Pants said...

I'd posit he is motivated by changing the world: building the future rather than keeping score.

Bezos has said before, paraphrase: "You know how in the Jetsons you want something and it just comes, with no concern for brand or whatnot? That's what we're going to do." Something that folks may or may not have noticed is the encroachment of the Amazon Basics items. They will identify a particular widget, target it, and drive other manufacturers out of business. They are killing brands. The medium-term goal is, you tell Alexa "send me paper towels" and Amazon Basics paper towels show up by drone an hour or two later. You're not comparing coupons between Bounty and Brawny or deciding which commercial shows better soaking action. This is going to reinvent retail. Search something like lightbulbs or batteries or USB cables in your Amazon search bar and you'll see what I mean. For the brands that do remain, Bezos wants a piece of it. Sure, go ahead and buy Fruit of the Loom underwear if you insist, but you're not going to buy them from the Sears at the mall (because that will be long gone) and you're not going to buy it from fruitoftheloom.com because no one does that. You're going to get it through Amazon. You'll get everything through Amazon.

He seems to feel that Bezos is working towards goals that will make life better for all. Of course I realize that sounds a bit utopian, but it would certainly be nice if it were true.

It is utopian. Bezos has his own particular goals, some of which are pretty weird, but maybe they will be a good thing. I dunno. Asteroid mining is one of them.

And, of course, I should mention the number of people with you on the Amazon shopping has made it possible for many poor people who live in out-of-the-way places to have a much better Life because more goods are available to them at a lower cost and without shipping fees.

Yes and no. He's destroying competition, and when he completely takes over your access to goods, what is his incentive to offer lower costs and cheap shipping? Sure your Amazon Basics sheets are reliable and cheap, but we saw with Wal-Mart twenty years ago that they would dominate a vertical by shutting everyone else down, and then prices went up and quality went in the shitter.

I Have Misplaced My Pants said...

No one's mentioned that Amazon warehouse's are terrible places to work or that Bezos' supports importing H-1B labor. When criticized for it, Bezos has said the workers can quit anytime they want - in other words - fuck you.
Evidently, despite having $80 Billion, he's willing to screw his workers over if he can increase his wealth by .0000001 percent.


Not just warehouses. Corporate is horrible too. Those stories about people being punished for not answering emails from dying relatives' bedsides are all true. My husband was disciplined for not answering his phone graveside when he was burying his father at Arlington. He'd been there for just under three years when, using the internal 'old fart' tool that shows your relative seniority, he'd been around longer than 91% of employees. That's partly due to rapid expansion, but also partly due to the fact that they reel you in with huge stock grants (salaries are capped and a huge amount of compensation is grants) which they then hold over your head and find reasons not to give you. You get 'stack ranked' poorly against other employees and they freeze your grants. You get put on a performance improvement plan because of some bullshit politics and they freeze your grants. They entice you to work 80, 90 hours a week for months at a time trying to make sure you get your grants, then make sure you get rotated out by not promoting you before you start getting the big money. Most people get ground up and spit out in 3-4 years, tops.

And Bezos is working hard to eliminate all these terrible jobs with robots. "No man, no problem" I am sure you remember who said that. Right?

Those warehouse workers, as well as retail cashiers, will all be out of work in 5-8 years, replaced with robots. How are those people going to pay their bills? Also, robots don't pay taxes. No one is talking about what this will mean.