The phenomenal rise of Jeff Bezos - a 'mysterious' corporate titan

For nearly two decades, Bezos was adamant that the company should largely stay out of the political limelight and not make a stir in local communities. It also had a bare-bones lobbying operation

Jeff Bezos rubbed elbows last weekend with Halle Berry, Chris Hemsworth and other Hollywood celebrities at an after-party for the Golden Globes. In December, he walked the red carpet, along with Meryl Streep and Tom Hanks, at a screening of The Post in Washington.

On Friday, Bezos and his wife, MacKenzie, made public their $33 million donation to a nonprofit that provides college scholarships to so-called Dreamers, young immigrants brought to the United States illegally as children. In October, he received an award for a donation to a marriage equality campaign.

Jennifer Cast, an Amazon executive who solicited the donation from him, said at the event that they could have donated anonymously to the campaign. “But just as critical as the money was Jeff’s offer to let us publicly acknowledge their gifts,” she said. “By allowing us to take their donation public,” she added, “the world quickly knew that Jeff Bezos supported marriage equality.”

As he was shaping Amazon into one of the world’s most valuable companies, Bezos developed a reputation as a brilliant but mysterious and coldblooded corporate titan. He preferred to hunker down in Amazon’s hometown, Seattle, at least partly because he thought it was better for Amazon’s growing business, largely avoiding public causes and the black-tie circuit.

But while  Bezos — who at 53 is the world’s richest person, with a net worth of more than $100 billion — can afford virtually any luxury, obscurity is no longer among them.

Amazon, now a behemoth valued at more than $600 billion, has become one of the faces of “big tech,” along with Apple, Alphabet’s Google and Facebook. These companies are facing a backlash. Amazon is under the microscope for what critics say is its corrosive effect on jobs and competition, and Bezos has become a bête noire for President Trump, who repeatedly singles out him and Amazon for scorn on Twitter.

“People are starting to get scared of Amazon,” said Steve Case, a co-founder of America Online, who recently started an investment fund focused on start-ups in underserved areas, with Bezos among its contributors. “If Jeff continues to hang out in Seattle, he’s going to get a lot more incoming. Even for just defence reasons, he has to now play offence.”

Bezos’ portfolio of other ventures has thrust him farther into the spotlight. Four years ago, he bought The Washington Post for $250 million, jump-starting a renaissance of the paper. In 2016, Bezos bought a $23 million home in Washington, one of the city’s most expensive, which is undergoing extensive renovations to make it a suitable party spot for the city’s political class. Nearby neighbours include former President Barack Obama and his family, and Trump’s daughter Ivanka Trump and her husband, Jared Kushner.

Bezos’ space start-up, Blue Origin, is also making its efforts more public, giving him another stage. The company is trying to rescue Earth by helping to move pollution-belching heavy industries off the planet.

“He’s getting thanked at the Golden Globes and targeted by presidential tweet tantrums — not even Steve Jobs had that kind of pop-culture currency,” said Margaret O’Mara, a professor of history at the University of Washington, who curated a museum exhibit in Seattle endowed by Bezos.

In a statement, Drew Herdener, an Amazon spokesman, said, “Jeff loves what he is doing, at Amazon, Blue Origin and The Washington Post, and he enjoys sharing his enthusiasm in public as he works with the teams to build and invent.”

But interviews with more than 30 people who know Bezos revealed his awareness of the growing opposition to Amazon and his growing comfort with being in the public eye. Bezos, they said, accepts the probability of greater government scrutiny of Amazon. The chief executive has advised Amazon executives to conduct themselves so that they can pass any legal or regulatory test.

The investor Warren E Buffett, who has known Bezos since the 1990s, said the cautionary tale of Microsoft, which faced a landmark antitrust case by the government that decade, must loom in Bezos’ mind. “You’re going to get a lot of scrutiny if you’re disrupting other people’s livelihoods,” Buffett said.

Bezos has always been happy to play the role of Amazon’s chief pitchman, especially when he perceives some benefit to Amazon customers from doing so, people who have worked with him said. He submits to interviews and speaks at events when, for instance, a new company product like the Kindle electronic reader or Echo speaker needs to be explained to the world.

But for nearly two decades, he was adamant that the company should largely stay out of the political limelight and not make a stir in local communities. It also had a bare-bones lobbying operation.

Even as he was named Time magazine’s person of the year in 1999, he tried to avoid politics. He was even reluctant to do photo opportunities with politicians.

There were business benefits to staying out of the glare.

A hedge fund executive in New York who caught the internet bug early, Bezos piled into a vehicle with his wife in 1994 with the intention of finding a place to start a business selling books on the internet. He founded Amazon later that year in Seattle, in part because of the growing pool of technical talent Microsoft had brought to the area.

But putting his start-up in Washington also meant Amazon would not have to collect sales tax in the country’s most populous states, like California, Texas and New York. Retailers typically have an obligation to collect sales tax in states where they have a physical presence.

For a time, for the same reason, the company would not publicly discuss where most of its warehouses were. And Amazon employees in Seattle who planned to travel out of state for work had to submit itineraries for review to avoid triggering unwanted sales tax liabilities.

Those efforts would, in turn, give his fledgling company a further price advantage against established physical retailers like Barnes & Noble.
 

It also meant that, despite its growing legions of customers, Amazon remained almost invisible in politics.

By the end of 2012, the company had swelled to more than 88,000 employees and over $61 billion in annual sales, creating huge businesses like its Prime membership service and Amazon Web Services along the way. Yet that year the company was criticised by leaders in Seattle and the news media for being disengaged from civic life compared with stalwarts like Boeing and Starbucks.

With investors, Bezos gave just enough of a peek at Amazon’s business to win their confidence while saying as little as possible to keep competitors guessing. To this day, Amazon will not disclose exactly how many Kindles, Echoes and other devices it has sold, and for years it refused to reveal financial details about Amazon Web Services, its highly profitable cloud computing business.

Despite the paucity of details, investors have sent its stock up more than 1,100 per cent over the last decade, dazzled by its growth.

A turning point came for Bezos around 2011 when Amazon faced a public showdown with state governments.

At the time, legislators began hounding internet retailers like Amazon to collect sales tax. In California, Amazon initially campaigned to overturn a new law imposing an internet sales tax. But Bezos backed off after it became clear that Amazon’s image could be tarnished, a former employee involved in the matter said.

Instead, Amazon began to make peace. In 2011, it signed an agreement with California to collect sales tax in the state, reaching numerous similar agreements around the same time. As part of those state deals, Amazon began building warehouses across the country, which allowed Amazon to deliver orders more quickly and let local politicians trumpet the arrival of thousands of jobs.

Suddenly, a company that once refused to confirm how many employees it had at its Seattle headquarters could not stop talking about how many jobs it was creating. It now has 542,000 employees.

©2017 The New York Times News Service