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The complicated legacy of Jeff Bezos

Amazon founder Jeff Bezos expressed his shock at the company's success in a 1999 interview with CNN. At the time, Amazon was still using paper for window blinds and an old hospital as it headquarters.

Posted: Feb 4, 2021 8:01 AM
Updated: Feb 4, 2021 8:01 AM

In 1997, the year Amazon became a publicly traded company, CEO Jeff Bezos promised investors they would be in for a journey. Amazon would not chase short-term profits, he warned in a letter to shareholders. It would focus "relentlessly" on customers. It would act with urgency but prioritize long-term investments. And it would run a lean culture that minimized costs and cut waste.

A quarter-century later, Bezos's approach has made Amazon a global behemoth that employs more than a million people and touches almost every aspect of modern life, a fact that's become even more apparent during the pandemic.

Bezos, the world's richest person until recently, has gone from selling books out of his garage to running a company that makes consumer electronics, produces award-winning films and TV shows, offers organic groceries and hosts some of the world's biggest websites. His company's ambitions include delivering packages to households using flying drones and spreading facial recognition technology to virtually every consumer's front doorstep.

With each new innovation, Bezos and Amazon have offered the promise of making life easier, more convenient and enriching for customers. But these services also became testaments to Amazon's ever-expanding power, influence and self-interest, inspiring fierce criticism from the company's opponents: that Amazon kills brick and mortar businesses; that it bullies workers; that it uses the data from its massive online storefront to maintain a monopoly; that its partnerships with law enforcement have made it an accessory to discriminatory policing.

"The guy was just obsessed with the end user. They were the highest priority," said James Bailey, a professor of leadership development at George Washington University's business school. "It's one of those situations where your biggest asset is also your biggest liability."

Now, as he prepares to step down as CEO of the $1.7 trillion business he built and take on the role of executive chair, Bezos leaves behind a company that's created immense value for consumers, investors and many small businesses, but which has also triggered a national reckoning over the costs it may have created for everyone else.

A model for building online companies

Bezos's ambitions were large from the start: He launched Amazon at a time when few people knew what the internet was and chose the name, he later told journalist Brad Stone, in part because the Amazon river is "not only the largest river in the world — it's many times larger than the next biggest river. It blows all other rivers away."

To achieve his vision, Bezos frustrated some shareholders by investing heavily in the business. It wasn't until the end of 2001 that Amazon had its first profitable quarter, and its first profitable year didn't occur until 2003. Amazon would continually flirt with profitability for the next decade. This approach would become a model for many others in Silicon Valley, and perhaps even something of an excuse for cash-hungry startups that seemingly burned through money without a pathway to profit.

"Bezos created the blueprint for building internet businesses, being hyper customer-centric, and scaling disruptive innovation," tweeted Aaron Levie, the CEO of enterprise cloud company Box.com.

No other innovation symbolized Bezos's appetite for losses like Amazon Prime, which was launched as a $79-a-year subscription plan and introduced what became the company's most recognizable offering: free two-day shipping.

On the surface, Amazon Prime stood to lose money. The cost of its benefits — which came to encompass not just fast shipping but streaming media, digital photo storage and discounts on groceries — outweighed what the company made in subscription fees. But it was another example of Bezos's long-term plan to lure new customers into Amazon's orbit and persuade them to become mega-spenders on the platform, thereby allowing Amazon to lower its costs even further to attract yet more customers, creating a virtuous cycle, or what Bezos called a "flywheel effect." The company last year announced it has more than 150 million Prime subscribers worldwide.

Relentless, or ruthless?

As Amazon became a bigger player in retail, it inevitably came into conflict with others, both big and small. In some cases, it effectively drove them out of business.

The bookseller Barnes and Noble announced in 2019 it was going private after a decade of trying to keep pace with Amazon. Toys"R"Us has blamed Amazon's aggressive pricing for crushing the quintessentially American toy store. Rightly or wrongly, Amazon is often listed as a contributing factor behind the so-called retail apocalypse. And these days, the mere mention of Bezos's interest in a new service is enough to send an entire industry's stocks into a downward spiral.

Like Walmart before it, Amazon has come to be viewed as "the new big bully, at least in the internet retail space," said Bailey.

Amazon famously clashed with book publishers over who controlled e-book pricing. It deliberately lost money selling diapers in order to thwart Diapers.com — then, according to a landmark antitrust investigation by US lawmakers, it acquired the company before raising diaper prices. (Bezos has said he does not recall giving an order to raise prices.) Amazon's growing clout has allegedly given it immense leverage to squeeze its suppliers and to use third-party sellers' own sales data against them to gain an anti-competitive edge.

Bezos has argued that Amazon prospers not at others' expense, but rather when it helps grow the whole pie. "Amazon's success depends overwhelmingly on the success of the thousands of small and medium-sized businesses that also sell their products in Amazon's stores," he told Congress.

Bezos also ruffled feathers when he held a highly publicized contest for the privilege of hosting Amazon's newest headquarters. The so-called "HQ2" was pitched as an engine for local job creation and economic growth, particularly to small and mid-sized cities seeking development. For months, dozens of city leaders jockeyed for Amazon's favor with offers of tax breaks and real estate. Ultimately, though, Amazon opted for Northern Virginia — just outside of Washington, D.C. — and New York, two of the nation's wealthiest and most obvious metro areas, leaving many onlookers perplexed. (It later withdrew from New York after facing backlash from members of the community.) The entire episode was a bizarre flex of Amazon's power and influence.

To some critics, the good that Bezos has created does not negate the alleged harms. On the 2020 campaign trail, figures like Sen. Elizabeth Warren called for Amazon to be broken up, and regulators are circling.

"The US and Europe are coming for Big Tech, and I don't think the lawsuits against Facebook and Google are the end of it," said Paul Gallant, an industry analyst at Cowen & Co.

What's good for customers isn't necessarily good for workers

Just as Bezos's growing empire raised questions about whether it was good for other businesses, it also raised questions about whether it was good for workers.

Rising automation, complaints about working conditions and a tough stance against unions all contributed to years of employee walkouts, petitions and, in some cases, lawsuits. Many of the company's white-collar workers have also protested Amazon's impact on the environment, calling on Bezos to make stepped-up commitments on climate change. (Amazon and Bezos later pledged to do more, with Bezos committing an initial $10 billion of his own money to fight climate change.)

Early on in the pandemic, Amazon faced a warehouse worker revolt over a lack of hand sanitizer, masks and other protective gear. After one New York-based employee organized a protest over the issue, Amazon fired him for violating the company's Covid quarantine policy. Amazon has since said it's put in place temperature checks at fulfillment centers, ramped up its cleaning regimen, and established some 150 "process changes" to keep workers safe.

Amazon has won plaudits for increasing its minimum wage to $15 an hour, but only after intense pressure from labor groups and some US lawmakers, including Sen. Bernie Sanders. And the same day that Bezos announced his plans to step down as CEO, the Federal Trade Commission said Amazon would pay more than $60 million to settle allegations that it withheld tips from its contract delivery drivers.

In the coming weeks, Amazon workers in Alabama will vote on whether to form the company's first US union. In response, Amazon has pushed for in-person voting despite the ongoing pandemic and launched a campaign to discourage unionization.

"Jeff Bezos built his multibillion-dollar empire on exploitative practices including wage theft and surveillance tactics designed to bully workers into silence and prevent them from organizing," said Rashad Robinson, president of the civil rights group Color Of Change.

A tech icon whose reputation reflects his industry's

Despite the criticisms, Bezos will undoubtedly be remembered in the business world as a brilliant strategist and a disciplined entrepreneur.

Bill Gurley, a prominent venture capitalist, called Bezos's tenure at Amazon "the most spectacular CEO run of my lifetime."

In many ways, Bezos's story with Amazon mirrors that of Silicon Valley. He began with a small idea in his garage that would change the world. He was lauded for innovating his way to success, putting in hard work and taking calculated risks. But those same choices also led to claims that his company had grown too powerful for its own good, and for the good of society.

Now as allegations about Amazon's power and approach to competition may be leading to a showdown with Washington, the billionaire CEO is tapping out.

In a letter to employees this week, Bezos said he plans to spend more time on his newspaper, The Washington Post, and his spaceflight company, Blue Origin. He also plans to get more involved with his philanthropic initiatives, perhaps following in the footsteps of another transformational tech CEO — Microsoft's Bill Gates.

"Bezos wants to go out on top," said Gallant.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 515504

Reported Deaths: 10296
CountyCasesDeaths
Harrison34999558
DeSoto33360432
Hinds32743643
Jackson24906392
Rankin22565405
Lee16455245
Madison14954283
Jones14158248
Forrest13834260
Lauderdale12311323
Lowndes11357193
Lamar10693140
Pearl River9748244
Lafayette8868143
Hancock7849132
Washington7559169
Oktibbeha7229138
Monroe7068179
Pontotoc7033110
Warren6885178
Panola6791135
Neshoba6744210
Marshall6707142
Bolivar6468151
Union643598
Pike5942157
Alcorn5921107
Lincoln5540136
George510680
Prentiss508285
Tippah495683
Itawamba4884107
Scott478999
Tate4777117
Adams4776125
Leflore4749144
Copiah458195
Yazoo458092
Simpson4566117
Wayne443472
Covington434895
Sunflower4319106
Marion4295112
Coahoma4244110
Leake414191
Newton396182
Tishomingo386894
Grenada3789109
Stone366166
Jasper341266
Attala340490
Chickasaw318367
Winston318392
Clay312978
Clarke301695
Calhoun286850
Holmes272889
Smith270552
Yalobusha244947
Tallahatchie232353
Greene225149
Walthall222166
Lawrence220242
Perry214556
Amite210357
Webster206548
Noxubee188843
Montgomery182157
Carroll175441
Jefferson Davis174343
Tunica163539
Benton153139
Kemper145441
Choctaw137027
Claiborne134839
Humphreys132239
Franklin126530
Quitman107828
Wilkinson106139
Jefferson97134
Sharkey65321
Issaquena1957
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Alabama Coronavirus Cases

Cases: 847659

Reported Deaths: 16172
CountyCasesDeaths
Jefferson1163752005
Mobile743371381
Madison53434738
Shelby38413371
Baldwin38171589
Tuscaloosa36131643
Montgomery34571782
Lee25664264
Calhoun22622519
Morgan22527408
Etowah20059520
Marshall18821318
Houston17769426
St. Clair16946359
Limestone16192220
Cullman16140305
Elmore15948295
Lauderdale15055307
Talladega14244302
DeKalb13061271
Walker12138380
Blount10765193
Autauga10545157
Jackson10204195
Coffee9435192
Colbert9363210
Dale9038192
Tallapoosa7283202
Russell710165
Chilton7078170
Covington6967197
Escambia6962144
Franklin6364108
Chambers5795142
Marion5435130
Dallas5302210
Pike5128109
Clarke485686
Lawrence4845130
Winston4785110
Geneva4650136
Bibb435495
Barbour370180
Butler3444101
Marengo342793
Monroe338366
Randolph337767
Pickens334790
Fayette331485
Henry321066
Cherokee319964
Hale318889
Crenshaw261678
Washington256852
Cleburne255460
Lamar253555
Clay252069
Macon245767
Conecuh193562
Coosa185847
Wilcox178338
Lowndes178268
Bullock152745
Perry141840
Sumter139741
Greene130345
Choctaw94328
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