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AMAZON @ 20
July 7th, 2015 by Clark Humphrey

an early amazon home page, via onemonthrails.com

an early amazon home page, via onemonthrails.com

One month ago, I asked you to turn back your mental clocks to the summer of 1995.

It was a time when Seattle still had a men’s pro basketball team and two daily newspapers. It was a time when Seattle bands still ruled the recorded-music sales charts (and a time when people still bought recorded music).

And, as I’d mentioned last month, it was a time when the whole World Wide Web thang was new and full of possibilities. Wired magazine’s pundits (a homogenous gang of “Grateful Dead fiscal conservatives”) lauded the dawn of a new golden age for media, the arts, medicine, and business opportunities unfettered by either governments or by the physical laws of planet Earth.

Amid all this hype, many “dot com” startups began.

Many of those ventures burned out in one to five years, having run out of money before they could turn a cool domain name into a viable business model.

There are (or were) websites devoted to chronicling the demises of other websites. Many of those obituary sites are also now defunct.

One of those first-generation dot-coms, however, has continued to live, and to expand in all directions like a wild Northwest blackberry bush.

And it’s done this without turning a real profit for most of its 20 years in existence.

Amazon.com Inc. has a lot of very patient investors. That, and its famous aggressive approach to everything it does (under such internal slogans as “Get Big Fast” and “It’s Always Day One”) turned it into one of the nation’s top 10 “technology” companies.

My readers here in Seattle don’t have to be told what Amazon has done for and/or to the city.

It’s brought thousands of swaggering “Code Ninja” programmer doodz into town (often for just one or two years), who’ve reshaped the local nightlife and bar industries while threatening the longstanding civic image of “Seattle Nice.”

It’s helped to accelerate the hyper-inflation of housing prices and the replacement of so many cool low-rise buildings.

It’s reshaped the Cascade (er, “South Lake Union”) neighborhood with its office buildings, and is doing the same to Belltown.

It’s made what was already one of America’s biggest book-buying burgs into a top center of gravity for book distribution and even publishing.

In the larger world, it’s become both loved and hated, often for the same things.

Along with most tech-centric companies, it’s been chided for its low hiring of non-white and non-male employees.

It’s become a symbol of economic inequality, paying many programmers six-figure salaries while being far less generous to its warehouse staffs.

Along with previous 500-lb. gorillas of bookselling (B. Dalton, Borders, etc.), it’s feared and despised by much of the old NYC publishing elite. Like those companies did before it, Amazon has been accused of setting its terms and expecting publishers to fall into line.

With the Kindle, it finally turned e-book reader devices into a real business. It helped to generate an explosion in online self-publishing, facilitating tens of thousands of author-entrepreneurs (who get nervous every time Amazon changes its terms).

Kindle, and the privacy it affords to its users, also helped turn “women’s erotica” into a major commercial genre.

In just about every other category of e-commerce, it’s instilled fear into competitors who don’t have the luxury of doing business for years without profits.

I shouldn’t describe Amazon as completely without profit.

It’s earning healthy margins on Amazon Web Services (AWS), its computing-services division, providing Internet “cloud” servers for other companies, including Netflix (a rival to Amazon’s own streaming-video venture), Spotify, and Instagram.

AWS’s web-page serving business is so big, and some of its clients are themselves so big, that up to one-third of U.S. Internet traffic at certain times of the day comes from AWS-hosted sites.

Another part of what AWS does is a modern, broadband-enabled version of what Boeing’s Computer Services division or Ross Perot’s old EDS company did—crunch numbers and process data for organizations that need stuff done by big computers, but don’t need to own their own big computers to get them done.

That business is almost certainly here to stay.

As for all the other big and little parts of this huge outfit, it all depends.

It can continue to “Get Big Fast” in new venture after new venture, as long as its shareholders (who include a lot of its own top employees, past and present) remain patient.

If they don’t, or if a raider like Carl Ichan muscles into the scene, Amazon might one day have to sell or drop some of its costlier or newer lines of business, raise prices and “Prime” membership fees, pause some of its ginormous office-building plans, hold back on some new projects, and shed some of its 20,000 staff in the Seattle area (out of some 165,000 worldwide).

And if that happens, you could see a local recession comparable to the 1970 Boeing Bust.

You might claim you’d like to see Amazon’s influence on Seattle wane. But a crash would hurt a lot of people.


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