Book Review: Brad Stone. The Everything Store: Jeff Bezos and the Age of Amazon
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Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon. New York: Little Brown, 2013. $28 Cloth.
With The Everything Store: Jeff Bezos and the Age of Amazon, technology journalist Brad Stone set out to write the “seminal” book about Amazon. Although Bezos did not consent to being interviewed for the book, he approved interviews with other Amazon executives, as well as friends and family, making The Everything Store the first book about Amazon to have the authorization of its subject. The result, based on 300 interviews, as well as Stone’s fifteen years of reporting for Newsweek, the New York Times, and Businessweek, is a deftly crafted biography of both Amazon, the company, and Jeff Bezos, the man. Much of Amazon’s (and Bezos’s) story has been told before, either in the business press or in a few books about Bezos and Amazon’s early years: Robert Spector’s Amazon.com: Get Big Fast (2000); James Marcus’s Amazonia: Five Years at the Epicenter of the Dot.com Juggernaut (2004); or in Mark Liebovich’s The New Materialists (2000). But no significant book about Amazon has been published in ten years, which makes Stone’s book all the more welcome. He not only takes the story forward but he enriches what is known with new details and testimony, weaving together an immense amount of material into a readable, compelling account of a complex, dynamic company and its driven founder.
That said, covering the twenty-year history of a company and the fifty-year life of its founder in just 384 pages means that The Everything Store cannot, in fact, give us everything. Amazon is so many things at once—a rapidly expanding global mega-retailer operating in more than a dozen countries, a Web services provider, a publisher with eleven imprints, a hardware manufacturer (of Kindles and soon, Stone speculates, a phone), a video-streaming service, a constant e-commerce innovator, and much more—that those readers hoping to find a detailed treatment of any one part of the company might well come away disappointed.
The Everything Store book belongs firmly in the business book category. It follows the company’s humble beginnings in a garage, its spectacular success during the dot.com bubble, its survival and recovery from the great challenge of the dot.com bust, and its continued growth and expansion amidst obstacles and challenges. Unsurprisingly, the focus stays closely on the internal culture of the firm, its financial performance, competitive tactics, organizational structure (such as it is), and the many personalities who have come and gone.
These generic requirements limit Stone’s ability to focus on what might interest the readers of the Journal of Electronic Publishing the most: Amazon’s outsized influence on the book publishing business and its continued deep and intimate involvement with books and their turbulent ecosystem. Nonetheless, Stone does unearth new information. His chapter on the development of the Kindle, in particular, should interest even those most aware of Amazon’s involvement with books. That chapter (entitled “Fiona,” the Kindle’s codename in development) shows how fully the Kindle was Bezos’s project, and provides perhaps the best example, after the initial conception and launch of the online bookseller in 1995, of Bezos’s tenacity in following through on a bold and, to some, improbable plan. It is the fullest treatment I’ve read of the Kindle’s pre-history, and it proves how important books have been not only to Amazon’s growth as an e-retailer but also to its emergence as a multi-faceted company operating across various industries.
In Stone’s telling, two different roads inside Amazon led to the Kindle. The first was Bezos’s early interest in the Rocketbook, an e-reader device developed by Martin Eberhard and Marc Tarpenning. In 1997, Eberhard and Tarpenning visited Bezos hoping to convince him to invest in their company, NuvoMedia. They almost persuaded him but when Bezos, a shrewd investor, demanded exclusivity and veto power over future investors, they went elsewhere (to Barnes and Noble and Bertelsmann). The Rocketbook had some modest success but then fizzled after Eberhard and Tarpenning unwisely sold NuvoMedia to the now-defunct Gemstar, a company that, as it turned out, had little interest in the product. The Rocketbook was off the market by 2003. Meanwhile, Bezos watched from the sidelines, still interested in the idea of an e-reading device.
The second route to the Kindle was the opening of the iTunes digital music service in 2003, after which Apple quickly became the top music retailer. This development both stunned and impressed Bezos and convinced him that Amazon needed its own digital strategy. After trying and failing to come up with a digital music store that could compete with Apple’s, Bezos settled on developing a digital strategy for books that would, like the iPod and iTunes, “control the customer experience.” If they didn’t come up with a digital bookstore, he was certain that Apple would and, in so doing, take away Amazon’s core business. The irony, of course, is that, by this logic, Amazon would be taking away its own core business, pre-empting the competition by competing with itself. With urgency, in 2004, Bezos set up a secretive research and design group, called Lab126, in Palo Alto, with orders to develop an e-reader as soon as possible. He re-assigned Steve Kessel, who had run the physical book category, to oversee the Kindle project. With insight gained from Clayton Christensen’s The Innovator’s Dilemma, Bezos insisted the Kindle be handled entirely separately from the printed books group. Otherwise, Kessel would not be able to ruthlessly compete against Amazon’s established print book selling business. Bezos told Kessel: “I want you to proceed as if your goal is to put everyone selling physical books out of a job” (234). Believing that they were riding the crest of a digital transition, media type by media type, Bezos and his team urgently set out to develop both an iPod equivalent for reading books and an iTunes store equivalent for buying them.
While hardware and software designers worked on the e-reading device in Palo Alto and, later, Cupertino, the Seattle office set to building the other crucial component of the Kindle—the catalog of books that would be for sale through the device. Bezos decided the Kindle store would need 100,000 titles at the start to be successful, and yet, by their calculation, publishers had at that time converted only 20,000 into digital form. The Seattle-based Kindle group set out with a mission to persuade publishers to supply another 80,000. It is here that the Kindle story takes on a darker character.
At this point in the Kindle story, Stone turns back to survey the industry’s now-soured relationship with Amazon—a story that will be familiar, if simplistic, to those who participated firsthand. According to Stone, the relationship between Amazon and book publishers was in the beginning “uncomplicated and largely symbiotic” (240). Publishers had welcomed Amazon as a counterweight to the large chains and big-box warehouses that had been expanding rapidly in the 1990s and increasingly demanding steeper discounts. Amazon, with its much larger catalog, had also opened up new revenue streams from publisher’s deep backlists, the so-called “long tail.” Although there were some “occasional skirmishes”—e.g., some publishers didn’t like Amazon allowing customers to write negative reviews; the Authors Guild didn’t like Amazon allowing third-party sellers to sell used books next to new books—they were “insignificant” compared to what was to come later. After surviving the dot.com bust and with an ever-growing share of the bookselling market, Amazon had displaced the big chains to become an even larger force to be reckoned with. Focusing more and more on growth and profitability, Bezos wanted more from book publishers in exchange for the special benefits Amazon had brought the industry: a selection many, many times larger than any of its competitors; the revival of the “long tail”; and a very low return rate of unsold books. Amazon was becoming more and more like its bricks-and-mortar rival Wal-Mart, demanding greater and greater concessions from its suppliers who were, in a vicious cycle, becoming more and more dependent on Amazon.
One Amazon practice that Stone digs up will likely make publishers cringe. In what Amazon’s book team called the Gazelle Project, small publishers were singled out for a special bullying tactic. If they were not willing to capitulate to demands for better terms, Amazon retaliated by turning off its recommendation engine and other automated systems that make a publisher’s books more visible to shoppers. Small publishers, who perhaps unwittingly had become dependent on Amazon’s ability to move their back catalogs, would eventually feel the pain and come groveling back. The Gazelle Project got its name after Bezos had suggested that his staff “negotiate” with small publishers “the way a cheetah pursues a sickly gazelle” (243). When Amazon’s legal team got wind of the name, they demanded it be changed to the “Small Publisher Negotiation Program.”
Relations grew even worse in the frenetic run-up to the Kindle in 2006. With the Kindle still top secret, Amazon had a very hard time motivating publishers to convert books to a new format. Bezos had whipped his executives into a Kindle frenzy—they felt that they were either about to make the future or have it snatched away by one of their competitors—but the publishers were not falling for what Stone calls Bezos’s “fever dreams.” They didn’t see the urgency and had no reason to believe that suddenly e-books would take off when interest had so far been tepid. Unlike the music business, which was facing massive on-line piracy, book publishers didn’t see the problem that Amazon was claiming it would solve. This difference in perspective left Amazon with little leverage and provoked a nastiness from the company. “Book publishers feared no similar bogeyman [as the music labels],” Stone explains, “So Bezos finally had to turn Amazon into one” (250). Amazon executives—one of whom had acquired the nickname “the battering ram”—sent “contemptuous and incendiary” emails; screamed at publishers when they didn’t get what they wanted; and even had the nerve to go straight to authors, hoping that would make the e-books appear faster, which only angered publishers further. One Amazon executive in the Kindle group was ordered to reopen an already completed contract with Oxford University Press for the use of one of its dictionaries in the Kindle. After he refused to do so, arguing that it would be bad business practice, a tussle arose with “the battering ram,” and he was fired. Another executive in the book group, who left around the same time, told Stone that after leaving Amazon he suffered from post-traumatic stress disorder. Only after Bezos revealed the secret Kindle to publishers and, especially, once he’d shown them a prototype with functional wireless, did they come around. By the fall of 2007 Bezos had 90,000 books for the Kindle, which was close enough to his goal. And when the launch finally came around that November, the publishers joined in the celebration.
But the greater offense to the publishers was yet to come. Throughout their tense negotiations, Bezos had deliberately withheld the Kindle e-book pricing strategy. Making a “gut call,” Bezos had decided to sell the most popular books at $9.99, a price fashioned after Apple’s $.99 price for a single in the iTunes store. Amazon would be taking a loss but that willingness to defer profits is yet another example of Bezos’s strategy of “long-term thinking” or his ultra-competitiveness—or both, depending on how you choose to look at it. The book publishers would eventually come around, he believed, but, in the time being, he knew that publishers did not want e-books to be priced so low they would compete with their more expensive hardcover editions. However, in his continued effort to gain publishers’ cooperation, Bezos instructed the Kindle team to say only that they hadn’t yet decided on their pricing strategy. At the launch, when the $9.99 price was revealed, publishers were taken aback. Initially confused, they soon realized that they’d been outmaneuvered. (Readers will find more detail about Amazon muscling publishers in George Packer’s hard-hitting analysis of Amazon’s effect on the book business in The New Yorker [“Cheap Words,” February 17 & 24, 2014)], an excellent complement to Stone’s book.)
The bitterness left over from the bullying and the deception around the Kindle e-book pricing strategy would fester into the price-fixing debacle of 2010–12, when Amazon out-foxed the publishers yet again. Stone provides less detail on this more recent episode (for that, I recommend Andrew Albanese’s The Battle of $9.99—notably a Kindle Single). From Stone’s point of view, the importance of the Kindle—especially after the February 2009 release of the Kindle2—is that it represents a turning point in the story of Amazon. With the successful conception, design, and execution of the Kindle, Amazon had entered the league of the most exciting companies around: “For the first time,” Stone writes, “Amazon was spoken in the same breath as Google and Apple—not as an afterthought but as an equal” (285). It proved that Amazon was a widely diversified company; that it wasn’t afraid to compete with its own core businesses; that it was much more than a retailer; and that it had successfully grown out of its image as a dot.com survivor. At the same time, the company had also gone from being perceived as an underdog to a bullying behemoth that seemed to think it could set rules not only for itself but also for everyone else. Stone takes up this new image of a black-hatted Amazon, post-Kindle, in the final third of the book, where, over three chapters, he pursues the question of whether Amazon is missionary (as it claims) or mercenary (as it appears to critics).
Others, however, might look to the story of the Kindle not for insight into Amazon itself but for a glimpse into the future of reading, publishing, and bookselling. Toward this end, I wish that Stone had had the space to explore Amazon’s extensive involvement in the book ecosystem more fully. Beyond his chapter on the development of the Kindle, publishing figures into the book mainly as one especially vivid example of Amazon’s aggressive business practices. He describes briefly the bookseller boycott against Amazon’s trade imprint headed by Larry Kirshbaum (who has since left Amazon), but he has little to say about the wide range of Amazon’s other publishing activities and its growing number of imprints. Nor does he consider Amazon’s extraordinary success with self-publishing through CreateSpace and KindleDirect. The new communities that have grown around the Kindle—buyers, readers, authors, publishers, and booksellers—are nowhere to be seen. And he provides no analysis of the various responses to Amazon’s dominance in the form of publishing start-ups, publisher strategies to sell directly to customers, or the entire debate about DRM, which is central to the success of the Kindle. It is in these proliferating developments in and around Amazon that one might glimpse a more subtle sense of the future of books and publishing than that provided by Stone’s rather narrow focus on the soured partnership between book publishers and Amazon.
One especially important aspect of Amazon as an Internet company is its gradual accumulation of a virtual data empire. By virtue of having the largest book catalog in the world, as well as a vast network of third-party sellers of new and used books, Amazon has developed a staggering amount of expertise about the business, very little of which it shares. It sits atop an immense trove of information about books, bookselling, consumer preferences and reading behavior, and it has gobbled up many smaller companies—Abebooks, Goodreads, Lexcycle, Audible.com, The Book Depository, Shelfari, Bookfinder.com, and its 40% stake in LibraryThing—acquisitions that, it can be surmised, serve to enrich this targeted expertise. Stone makes no mention of the massive amount of data Amazon stores about its customers, nor does he question how it safeguards customer privacy or how it responds to inquiries from the government about its customers.
Because Amazon is one of biggest and most data-centric technology companies, I wish Stone had taken an interest in these issues around civil liberties, government surveillance, personal privacy, and more general questions about information policy in the wake of the Internet. He, for instance, makes no mention of the controversy around Amazon’s remote deletion of George Orwell’s 1984 from some customers’ Kindles after it was determined that the publisher who had offered them for sale didn’t have the right to do so (a story Stone himself reported in the New York Times in 2009). Nor does he mention Amazon’s controversial decision to quit hosting Wikileaks, possibly under political pressure from Washington. Although Stone briefly mentions that Amazon is a “savvy navigator of the law,” he gives very short shrift to Amazon’s sophisticated lobbying and legal tactics. Indeed, the best evidence of the company’s “savvy navigation” is that its behind-the-scenes maneuverings rarely come to light, unlike those of competitors Google, Apple, and Microsoft. Stone briefly mentions a white paper that Amazon sent to the FTC with regard to the publishers’ price-fixing arrangement with Apple, but certainly there is more to the story of Amazon’s involvement in the DOJ investigation. Stone is certainly skilled enough to investigate the more political work that Amazon engages in as it pursues its expansive agenda of growth.
As a company Amazon is, literally, all over the place, and its twenty-year history has been dramatic. To his credit, Stone has impressively wrestled that history into brisk narrative form without taming it too much and without ironing over all the creases and wrinkles. Still, I can’t help feel that he has found himself in the constrained posture of seeing the world primarily from the perspective of his subject. Near the end, he sums up: “When you have fit yourself snugly into Jeff Bezos’s worldview and then evaluate both the successes and failures of Amazon over the past two decades, the future of the company becomes easy to predict. The answer to almost every conceivable question is yes” (339). Such awe-struck insularity may be the fate of all books that can’t be fully researched without the authorization of their subjects—indicating the perils of what has been called “access journalism”—or of an author who spends a long time immersed in a compelling and outsized story that revolves around a complicated and charismatic figure. Nonetheless, it is reasonable for a reader to want and expect more. After all, during his book tour, Stone himself told an interviewer at the Commonwealth Club: “These [tech] giants are changing the world in all kinds of ways ... [and] it is our job to get underneath their skin a little bit and describe what is going on.”
When Bezos gave his blessing to Stone’s book, he also told him that he thought it was “too early” to be reflective about Amazon. (In the late 1990s, Bezos told Robert Spector, author of one of the early Amazon books noted above, the same thing.) Given Bezos’s futurist bent—his famous “long-term thinking”—it is hard to know when, if ever, reflection can properly occur. That’s the trick of futurism: it defers judgment. Stone is thus to be commended for not taking Bezos’s advice, and for plowing into the unfulfilled present, providing his readers with careful, detailed reporting and astute observation.
I finished The Everything Store with the hope that other talented reporters will pick up the ball right where Stone has left it.
Mary Murrell is Andrew H. Mellon Postdoctoral Fellow at the University of Wisconsin, Madison.