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Bezos Beams at BEA
John Mutter and Jim Milliot -- 6/12/00
For the most part, e-billionaire Jeff Bezos charmed a full crowd in the Grand Ballroom at the McCormick convention center, as he outlined in a FAQ format the history and goals of Amazon.com, "Earth's most customer-centric company."
Bezos said it is "legend" that the company loses money on each sale--or "sells dollar bills for 90 cents." In fact, Amazon.com receives 20 cents on every sale, and "will never have to raise prices to be profitable."
He defended what he called the company's investment in itself, saying that "what we've done is not that different from the way many companies have invested for centuries. What's unusual is that we've done it as a public company and done it on a large scale.... When you have something that's working well, the best thing is to invest more in it."
The company has continued to add products to its original line of books, because customers have requested it, he said. Besides, with "high fixed costs and low variable costs, we had to get big fast," he continued. "At the end of the day, we'll be a better bookseller than if we didn't expand." ("You can either be really big or small on the Net; it's hard in the middle.")
Bezos returned repeatedly to his mantra of customer service, saying that the company "probably has gotten more feedback from customers in five years than any big company gets." In part, this is because most contact is through e-mail. "The great thing about e-mail," he said, "is it turns off the politeness gene, even for Midwesterners."
Proud that Amazon.com accounted for some 70% of the sales of Stephen King's Riding the Bullet, Bezos predicted that e-books would become popular gradually over the next several decades.
He deflected the only hostile question--about sales taxes--by reframing the issue into one of "collecting" rather than "paying" sales taxes--since customers actually pay the tax.
At a press conference, Bezos defended Amazon's actions in protecting its patents, actions that have included suing Barnesandnoble.com over the use of one-click technology. Bezos said he has no intention of making a "unilateral move" in releasing a patent that would hurt Amazon and benefit its competitors. Bezos said one reason Amazon continues to press its lawsuit against B&N.com is because he considers the rival e-retailer to be "imitators, not innovators."
Bezos said Amazon has plans to open sites in several countries, although he declined to give specifics. He was confident about existing international operations, saying, "Bertelsmann is ahead of us only in the Netherlands, only because we haven't opened there." He claimed Amazon has no interest in buying a physical retail chain, including Borders, because he d s not see any synergy between online and offline operations.
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