Amazon Wants to Ship Your Package Before You Buy It

In a newly filed patent, Amazon wants to ship a package to your door before you click “buy.” The Wall Street Journal has the scoop:

In deciding what to ship, Amazon said it may consider previous orders, product searches, wish lists, shopping-cart contents, returns and even how long an Internet user’s cursor hovers over an item.

Today, Amazon receives an order, then labels packages with addresses at its warehouses and loads them onto waiting UPS, USPS or other trucks, which may take them directly to customers’ homes or load them onto other trucks for final delivery.

It has been working to cut delivery times, expanding its warehouse network to begin overnight and same-day deliveries. Last year, Amazon said it is working on unmanned flying vehicles that could take small packages to homes directly from its warehouses.

In the patent, Amazon does not estimate how much the technique will reduce delivery times.

As for me, I’m looking forward to Amazon drones delivering my packages that I didn’t even order.

On Reviewing Brad Stone’s Book about Amazon and Jeff Bezos

I really enjoyed reading Brad Stone’s piece in Business Week about Jeff Bezos last month in advance of his book, The Everything Store: Jeff Bezos and the Age of Amazon, hitting the shelves. The book has received positive acclaim in the press, and it has a 4.5 star rating on Amazon as of this writing.

So it was a bit startling to read a review of Stone’s book by MacKenzie Bezos, wife of Jeff Bezos. She doesn’t mince words and leaves a 1-star review, on where, else, Amazon:

In the first chapter, the book sets the stage for Bezos’s decision to leave his job and build an Internet bookstore. “At the time Bezos was thinking about what to do next, he had recently finished the novel Remains of the Day, by Kazuo Ishiguro, about a butler who wistfully recalls his personal and professional choices during a career in service in wartime Great Britain. So looking back on life’s important junctures was on Bezos’s mind when he came up with what he calls ‘the regret-minimization framework’ to decide the next step to take at this juncture in his career.” It’s a good beginning, and it weaves in nicely with what’s to come. But it’s not true. Jeff didn’t read Remains of the Day until a year after he started Amazon.

If this were an isolated example, it might not matter, but it’s not. Everywhere I can fact check from personal knowledge, I find way too many inaccuracies, and unfortunately that casts doubt over every episode in the book. Like two other reviewers here, Jonathan Leblang and Rick Dalzell, I have firsthand knowledge of many of the events. I worked for Jeff at D. E. Shaw, I was there when he wrote the business plan, and I worked with him and many others represented in the converted garage, the basement warehouse closet, the barbecue-scented offices, the Christmas-rush distribution centers, and the door-desk filled conference rooms in the early years of Amazon’s history. Jeff and I have been married for 20 years.

While numerous factual inaccuracies are certainly troubling in a book being promoted to readers as a meticulously researched definitive history, they are not the biggest problem here. The book is also full of techniques which stretch the boundaries of non-fiction, and the result is a lopsided and misleading portrait of the people and culture at Amazon. An author writing about any large organization will encounter people who recall moments of tension out of tens of thousands of hours of meetings and characterize them in their own way, and including those is legitimate. But I would caution readers to take note of the weak rhetorical devices used to make it sound like these quotes reflect daily life at Amazon or the majority viewpoint about working there.

For example, when the author does include people whose accounts of a supportive and inspiring culture contradict his thesis, he refers to them dismissively throughout the book as robots. In an archive of the thousands of thank you messages written to Jeff over the years, a small sampling includes “I just wanted to thank you for giving my husband the opportunity to work for your company so many years ago and let you know that he always spoke kindly and enthusiastically of the distribution center, the people and you.” “Having finished my shift I thought I would send you a short email to say thank you. There is a fantastic team based here and we have super support. Our mentors are true Amazon angels providing guidance and showing great patience.” “I cried as I read the Career Choice announcement on Amazon today. What Amazon is doing to help its employees is affecting lives in the most meaningful way I can think of. It restores my faith in humanity.” It seems like unbalanced reporting to avoid including the point of view of more people like these (and to use narrative tricks to discredit those who are included), given how plentiful they are.

In light of the focus in many of the reviews here and elsewhere on what the book “reveals” about Jeff’s motives, I will also point out that the passage about what was on his mind when he decided to start Amazon is far from the only place where the book passes off speculation about his thoughts and intentions as fact. “Bezos felt…” “Bezos believed….” “Bezos wanted….” “Bezos fixated…” “Bezos worried….” “Bezos was frustrated…” “Bezos was consumed…” “In the circuitry of Bezos’s brain, something flipped…” When reading phrases like these, which are used in the book routinely, readers should remember that Jeff was never interviewed for this book, and should also take note of how seldom these guesses about his feelings and motives are marked with a footnote indicating there is any other source to substantiate them.

One of the biggest challenges in non-fiction writing is the risk that a truthfully balanced narration of the facts will be boring, and this presents an author with some difficult choices. It may be that another telling of the Amazon story—for example, that people at Amazon have no secret agenda they’ve been able to keep hidden for 19 years, really do believe in the mission they keep repeating, and are working hard and of their own free will to realize it —would strike readers as less exciting than the version offered here. I sympathize with this challenge. But when an author plans to market a book as non-fiction, he is obliged to find a suspenseful story arc that doesn’t rely on mischaracterizing or avoiding important parts of the truth. I am grateful this is the era of the Internet, when characters in non-fiction can step out of books, as Jonathan Leblang and Rick Dalzell have done, and speak for themselves. Ideally, authors are careful to ensure people know whether what they are reading is history or an entertaining fictionalization. Hollywood often uses a more honest label: “a story based on true events.” If authors won’t admit they’ve crossed this important line, their characters can do it for them.

Brad Stone responds here:

Bezos said that he married MacKenzie after searching for someone tenacious enough to break him out of a Third World prison. By that standard, I got off easy. Mrs. Bezos mostly took me to task for what she perceived were subtle biases in my story. I’ll own up to that, though my slant is hardly political or personal. Nor is it particularly unique.

No matter how hard we strive for objectivity, writers are biased toward tension—those moments in which character is forged and revealed. I set out to tell the incredible story of how Amazon grew from three people in a garage to a company that employs 100,000 people around the world. It wasn’t an easy journey for the company, and for many Amazon employees, it wasn’t always enjoyable. It’s precisely that tension—between sacrifice and success—that makes Amazon and Bezos so compelling. Like any company, there were countless moments of dull harmony, and who knows how many hours of unremarkable meetings along the way. You could argue that many of those define Bezos and the company more than the strategic risks and moments of friction. MacKenzie Bezos does. I happen to disagree.

Still, I’m not so high on my own authority to ignore the obvious: there are details of this story that only Jeff and MacKenzie Bezos can know. If they point to errors, I’ll gladly correct them. But I’d also proudly note that no one has taken issue with the major revelations in my book, such as Bezos’s Amazon.Love memo, the Cheetah and Gazelle negotiations with book publishers, the MilliRavi press release, the fight with Diapers.com and LoveFilm, and on and on.

The book is on my to-read list, but probably in 2014.

Jeff Bezos Purchases The Washington Post

Wow. Talk about a changing market in journalism. The huge news today is that Jeff Bezos, founder of Amazon.com, is plunking $250 million in cash to buy The Washington Post. Here is more:

Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.

Seattle-based Amazon will have no role in the purchase; Bezos himself will buy the news organization and become its sole owner when the sale is completed, probably within 60 days. The Post Co. will change to a new, still-undecided name and continue as a publicly traded company without The Post thereafter.

The sale to Bezos involves The Post and its website (washingtonpost.com), along with the Express newspaper, the Gazette Newspapers and Southern Maryland Newspapers in suburban Washington, the Fairfax County Times, the Spanish-language El Tiempo Latino newspaper, and the Robinson Terminal production plant in Springfield. Bezos will also purchase the Comprint printing operation in Gaithersburg, which publishes several military publications.

The deal does not include the company’s headquarters on 15th St. NW in Washington (the building has been for sale since February), or Foreign Policy magazine, Slate.com, the Root.com, the WaPo Labs digital-development operation or Post-owned land along the Potomac River in Alexandria.

Bezos’s purchase is a great addition to the history of The Washington Post:

The Post, founded in 1877, has been controlled since 1933 by the heirs of Eugene Meyer, a Wall Street financier and former Federal Reserve official. Meyer bought the paper for $825,000 at a bankruptcy auction during the depth of the Depression.

After years of financial struggle, Meyer and his successor as publisher of The Post, son-in-law Philip L. Graham, steered the paper into a leading position among Washington’s morning newspapers. They began enlarging the company, notably by acquiring TV stations and Newsweek magazine in 1963 (the company sold the magazine for a nominal fee to the late billionaire Sidney Harman in 2010 after years of losses). In later years, the company added cable TV systems and the Kaplan educational division, currently the company’s largest by revenue.

UPDATE (8/5/13):

Here is Jeff Bezos’s letter to The Washington Post employees, in which he alludes to the changing nature of journalism and what’s to come for the paper:

There will of course be change at The Post over the coming years. That’s essential and would have happened with or without new ownership. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there. I’m excited and optimistic about the opportunity for invention.

Amazon To Go into Grocery Business

An interesting scoop from Reuters on Amazon quietly testing/developing a grocery delivery business:

Amazon is now planning to expand its grocery business outside Seattle for the first time, starting with Los Angeles as early as this week and the San Francisco Bay Area later this year, according to the two people who were not authorized to speak publicly.

If those new locations go well, the company may launch AmazonFresh in 20 other urban areas in 2014, including some outside the United States, said one of the people.

Bill Bishop, a prominent supermarket analyst and consultant, said the company was targeting as many as 40 markets, without divulging how he knew of Amazon’s plans.

I already spend hundreds, if not thousands, of dollars on Amazon every year. I purchase household items on a regular basis from the site. It would make sense that there would be ecstatic consumers who would want to buy fresh groceries from Amazon as well. I know I would.

Why Amazon Acquired Goodreads

According to an industry research group Codex, about 19 percent of Americans do 79 percent of all our (non-required) book reading. This post at The Atlantic, then, summarizes why Amazon acquired Goodreads:

And the way those avid readers find their books is changing. According to Codex’s quarterly survey (in 2012, the company interviewed some 30,000 readers total), far fewer people are finding their reading material at brick and mortar bookstores than two years ago. Instead, they’re relying more on online media (including social networks and author websites) and personal recommendations from people they know (which tend to happen in person, but can also include some social network chatting). What they’re not relying on much more heavily are recommendation engines from online booksellers, like Amazon.

I actually reasoned the numbers would be further skewed, something like 5% of Americans do 95% of our non-required reading. I would like to see more than one source for this statistic.

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(Hat tip: Tim O’Reilly)

Goodreads is Now Part of Amazon.com

This is an interesting move from Amazon.com: the company is buying the excellent online books social network and information portal Goodreads. I’ve used Goodreads sparingly in the past, but I know a lot of people who love the service and the recommendations. Here is the press release:

“Amazon and Goodreads share a passion for reinventing reading,” said Russ Grandinetti, Amazon Vice President, Kindle Content. “Goodreads has helped change how we discover and discuss books and, with Kindle, Amazon has helped expand reading around the world. In addition, both Amazon and Goodreads have helped thousands of authors reach a wider audience and make a better living at their craft. Together we intend to build many new ways to delight readers and authors alike.”

“Books – and the stories and ideas captured inside them – are part of our social fabric,” said Otis Chandler, Goodreads CEO and co-founder. “People love to talk about ideas and share their passion for the stories they read. I’m incredibly excited about the opportunity to partner with Amazon and Kindle. We’re now going to be able to move faster in bringing the Goodreads experience to millions of readers around the world. We’re looking forward to inspiring greater literary discussion and helping more readers find great books, whether they read in print or digitally.”

“I just found out my two favorite people are getting married,” said Hugh Howey, best-selling author of WOOL. “The best place to discuss books is joining up with the best place to buy books – To Be Read piles everywhere must be groaning in anticipation.”

Following the acquisition, Goodreads’s headquarters will remain in San Francisco, CA. Founded in 2007, Goodreads now has more than 16 million members and there are more than 30,000 books clubs on the Goodreads site. Over just the past 90 days, Goodreads members have added more than four books per second to the “want to read” shelves on Goodreads.

Terms of the deal weren’t disclosed.

Here’s what the folks at Goodreads wrote about the acquisition:

1. With the reach and resources of Amazon, Goodreads can introduce more readers to our vibrant community of book lovers and create an even better experience for our members. 
2. Our members have been asking us to bring the Goodreads experience to an e-reader for a long time. Now we’re looking forward to bringing Goodreads to the most popular e-reader in the world, Kindle, and further reinventing what reading can be. 
3. Amazon supports us continuing to grow our vision as an independent entity, under the Goodreads brand and with our unique culture.

Sounds like a great fit.

Amazon as a Charitable Organization

Following the dismal 4th quarter earnings announcements by Amazon, detailed below, Amazon’s share price shot up by more than 10%.

  • Q4 revenue of $21.27 billion missed expectations of $22.23 billion
  • Q1 EPS of $0.21 missed expectations of $0.27;
  • The firm guided top-line lower, seeing Q1 sales of $15-$16 billion, below the estimate of $16.5 billion
  • The firm guided operating income much lower, seeing Q1 op income of ($285)-$65 Million on expectations of $261.4 MM
  • The firm said the its physical books sales had the lowest growth in 17 years
  • Total employees grew by 7,000 in the quarter and 32,200 Y/Y to a record 88,400
  • Worldwide net sales Y/Y growth was the slowest in years at 23%, down from 30% in Q3 and 34% a year ago
  • And, last and certainly least, LTM Net Income is now officially negative, or ($49) meaning as of this moment the firm with the idiotically high PE has an even more idiotic N/M PE.

The question is why? Matthew Yglesias has a great thought: Amazon is a charitable organization. To wit:

The company’s shares are down a bit today, but the company’s stock is taking a much less catastrophic plunge in already-meager profits than Apple, whose stock plunged simply because its Q4 profits increased at an unexpectedly slow rate. That’s because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.

It’s a truly remarkable American success story. But if you own a competing firm, you should be terrified. Competition is always scary, but competition against a juggernaut that seems to have permission from its shareholders to not turn any profits is really frightening.

Sometimes (often) the markets are a fool’s game.