November 16, 2018
With a market cap approaching $800 billion, and fresh off a well-publicized search for a second corporate headquarter that saw hundreds of cities and local governments outbid each other with billions in incentives, Amazon’s perch atop the retail/e-commerce food chain would appear eternal.
Not so, according to founder/CEO Jeff Bezos, who, when reportedly asked about the burgeoning growth of the company and its ramifications in a staff meeting at the Seattle headquarters, said Amazon would one day perish.
“Amazon is not too big to fail,” said Bezos, according to a recording of the Nov. 8 meeting obtained by CNBC. “In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”
Bold talk considering Amazon has generated more than $7 billion in profit and $160 billion in revenue in just nine months this year. The company remains one of the largest retailers of packaged and digital media.
And despite spending billions on original content, Amazon continues to promote the “free” Prime Video streaming video service largely as a loss-leader marketing tool – a strategy that unnerves Netflix co-founder/CEO Reed Hastings.
“They are so scary,” Hastings told CNBC in a separate interview last year. “Everything Amazon does is so amazing. How are they doing so many business areas so well? We are continuing to watch them and be impressed with them.”
The company has more than 600,000 employees globally, with plans to add 50,000 more between new co-headquarters in Arlington, Va., and Queens, N.Y.
Amazon is also adding 5,000 employees to a tech center in Nashville, Tenn.
But Bezos warned that failure often follows companies that become more involved with their image than the needs of their customers.
“That will be the beginning of the end,” Bezos said. “We have to try and delay that day for as long as possible.”
But as CNBC learned talking to some Amazon employees, internal image is not what concerns most staffers. Instead, government regulation and antitrust issues do.
Indeed, the European Union and Japan are separately looking into antitrust issues involving Amazon merchant data. In the United States, President Trump has long voiced concern about Amazon’s relationship with the U.S. Postal Service, taxes, impact on small retailers and other issues.
Some observers contend Trump’s apparent animus against Amazon is largely fueled by the fact that The Washington Post, which is owned by Bezos, often criticizes the president and his policies in print and online.