Thursday May 05, 2011

In October 1996, 15 months into his run as founder and CEO of amazon.com, I interviewed Jeff Bezos for The Seattle Times. It was all new to me: both the Internet and interviewing people. I was actually singularly wrong for the role. I went in ready to talk about literature, about which, it turns out, Bezos didnt know much, and we wound up talking about technology and business issues, about which I knew even less. The resulting Q&A still feels valuable from an historical perspective. Part I can be read here.

How do you get your list of books together?

We get the bulk of our data from book wholesalers who have computerized inventory data bases of their own, which they use to manage their warehouse operations. We get data from the Library of Congress. And we get data directly from publishers. Any publisher can come to our website and one of the links at the bottom of the home pagethere is one that says “Is there an author in the house?” and there's another one that says Calling all publishers. A tiny fraction of the data we actually enter by hand.

Which books are the big sellers?

We sell everything, but we are probably disproportionately strong in literary fiction, science fiction, and computer books, Internet books, things you would expect. But we also sell a huge amount of romance novels. We sell a disproportionately small number of romance novels, but romance is such a huge category. It's a small piece of a huge pie.

Do you have a favorite book?

It used to be Dune. I'm sort of a techno-geek, propeller-head, science-fiction type, but my wife got me to read Remains of the Day and I liked that a lot. I also like the Penguin edition of Sir Richard Francis Burton's biography

Bugs in the system?

There aren't any bugs per se but there are things we want to do better; and there are whole new things that we want to do.

Such as?

We want to increase the amount of customer-to-customer interaction that we have, and increase the amount of customer-to-author interaction. We want to set the store up so we can redecorate the store for each individual who walks in; so you can set up a series of preferences and say, “I never read romance; don't ever show me any romances.”

What do you mean?

The whole page would be personally designed for you. So if you said, “I really love literary fiction”...etc., well, here's a great science ficton novel that we actually think you'd like based on your preferences in literary fiction. Stuff like that. In case you want to broaden out.

It would all be done automatically. It would have to be. The way it might work is you might come in and we present you with a list of 100 books that are in a particular genre, like literary fiction, let's say, and you would rate the ones you liked the most and disliked the most, and based on what you liked and disliked the computer would be able to form a profile of your particular tastes, and it might try to match you up with people of similar tastes. You call that your affinity group. What are things you haven't read that people in your affinity group love? And then it would recommend those things to you.

Are there other on-line booksellers?

There are more than a thousand on-line booksellers. We are by far the largest and best-known and the one doing the best job of customer service. Theres Book Stacks Unlimited in Ohio--they only offer about 400,000 titles. We discount our prices and they don't. We discount the top 300,000 bestsellers from 10 percent to 30 percent. Again, that's almost twice as many titles as the largest physical bookstores even carry.

We can afford to do that because we have such a lower cost structure. Our desks are made of doors. We spend money on things that matter to customers. We have the world's best serverswe use digital alpha servers64-byte machines with a gigabyte of RAM and all this stuff. We hire only the most talented computer programmers.

How will all of this affect physical bookstores?

I think you'll see a continuation of the trend that's already in place, which is that physical bookstores are going to compete by becoming better places to be. They'll have better lattes, better sofas, all this stuff. More comfortable environments. I still buy about half of my books from physical bookstores and one of the big reasons is I like being in bookstores. It's just like TV didn't put the movies out of businesspeople still like to go to the movie theater, they like to mingle with their fellow humansand that's going to continue to be the case. Good physical bookstores are like the community centers of the late 20th century. Good physical bookstores have great authors come in and you can meet them and shake their hands, and that's a different thing. You can't duplicate that on-line.

Now there's a whole series of stuff that we're going to do on-line that you could never do in a physical bookstore; and we're doing some of that now. Any customer, any browser, anyone in the world, can come to amazon.com and review any book on our bookshelves; you can't do that in a physical bookstore. What are you going to do--put yellow 3M post-its on the spine?

How do you police that?

On a daily basis we have people who read through all the submissions and weed out the ones that are frivilous; but it's an incredibly small number of people who actually do that. We had God review the Bible. We had J.D. Salinger review Catcher in the Rye. It was very funny. The person who did that one actually had a terrific sense of humor. But we just get rid of it.

But if you want to trash a book, that's fine with us. If you want to come in and say “I thought this was John Grisham's worst book ever; he should be embarrassed by foisting this on us. It's not as good as Time to a Kill, blah blah blah,” that helps people make purchasing decisions; and that's fine with us.

Our whole editorial department gets together the third Tuesday of every month--or something like that--at one of their houses, and they sit and read through all of these and make the decisions. [There are] eight people in the department.

Why call it amazon?

The amazon is the earth's biggest river and were the earth's biggest bookstore.

How many employees do you have now?

Just over 100. We opened the store almost fifteen months ago, July 16th, 1995, and we've been growing at 34 percent a month, which is basically unheard of. That annualizes to more than 3000 percent a year. We've been in four different offices in the last fourteen months, always moving because we don't have enough spaceboth in terms of our staff and our warehouse space. We're about to move our warehouse again. We've shipped books now to over 95 different countries.

Anything new on the horizon?

We've made it possible for any website on the entire Internet to have their own bookstore in association with amazon.com. No matter how small or big your website, you can add a bookstore to it. And we pay you 8 percent of revenues for any order you send us through your bookstore. It costs nothing up front. All you have to do is come to our homepage and fill out an on-line application form; we give you a special ID number and you encode in the URL that you use to point to the books in our catalogue. That special ID number allows us to track where the books came from.

We've had this open now for just over two months. Its called the Associates Program, and we already have over a thousand websites. There's one Associate who has a website that sells meteorites. This guy knows everything about meteorites but you could never set up in the physical world a store that just sold books on meteorites. It would never make any money.

I came up with the idea by trying to figure out "How can amazon.com become experts on all 300,000 Library of Congress narrow niche subject categories? There's just no way. But there are such experts out there. And they already have websites. Let them do it.

--October 1996