The world’s second richest man is retiring from Amazon…kind of
Lesson summary
Hi there, thanks for joining us at Plain English this Thursday. I’m Jeff; JR is the producer; and this full lesson can be found at PlainEnglish.com/343. We are already in March of 2021, time flies. Looking forward to some nicer weather in Chicago; we had a really cold and snowy February. Glad to put that behind us.
Coming up on today’s lesson: Jeff Bezos founded Amazon.com from his home in Seattle in 1994; that business made him the world’s richest man. Now he has decided to semi-retire from Amazon; I’ll explain what, exactly, I mean by that. The phrasal verb today is “step back from” and JR has a song of the week.
New CEO for Amazon
Jeff Bezos, the world’s second-richest man, announced that he will step back from his duties as Chief Executive Officer of Amazon, the e-commerce behemoth he founded at his home in 1994. The company announced last month that the 57-year-old Bezos would transition to executive chairman. As such , he will remain involved in the strategic decision-making of the company, more so than other members of the Board of Directors, but he won’t be in charge of day-to-day operations as CEO.
That role will fall to 53-year-old Andy Jassy. He’s currently the head of Amazon’s cloud computing division, which currently represents over half of Amazon’s profits. Jassy will take over a sprawling empire of businesses that serves both consumers and other companies.
Amazon started selling books online at a time when online shopping was new. It soon branched out into music and movies, then delivered on CD’s and DVD’s. It now sells household goods, electronics, groceries, video games, and any assortment of other business or household items. It pioneered the concept of free shipping for online orders. Its e-book reader, the Kindle, established a functioning market for electronic books, thanks to its software that prevents piracy.
Later, it became a leader in voice assistants and has sold millions of its Alexa smart devices; the software is now enabled on third-party speakers, too. Its Prime membership started as a way for consumers to get free shipping; today, it’s a multi-media streaming service, complete with streaming music, movies, and TV shows. As a movie studio, Amazon produces some of its own shows just for Prime members, but it rents and sells electronic access to mainstream movies and shows, too.
Amazon is popular in the US, Germany, UK, Japan, Mexico, and dozens of other markets. As an e-commerce platform, it does well in markets with shopping cultures similar to the US. It failed in, and eventually pulled out of, China; it has struggled in India; it only started selling merchandise in Brazil in 2017 and has struggled against a local competitor.
Besides its consumer business, Amazon has a powerful business-to-business presence as well. Amazon built its own cloud computing infrastructure to serve its own business in the early days; it turned around and sold access to that cloud computing engine to other companies. Today, Amazon Web Services is one of the leaders in cloud computing, alongside Microsoft.
Amazon also lets businesses sell on its platform. In the early days, Amazon itself sold everything that appeared on its site. Today, third-party sellers can create an online store using Amazon’s infrastructure. Amazon will even store and ship goods for small businesspeople—for a fee.
Amazon is also dabbling in so-called “moon-shot” projects—businesses that seem far-fetched now, but could be revolutionary in the future. Its drone delivery project is an example of that; it’s said to be working on a cure for the common cold.
Amazon and Bezos have steadily amassed power and market share and have largely avoided controversy and missteps. Only two exceptions to that rule come to mind: Bezos’s divorce and the HQ2 debacle.
A few years ago, Amazon announced it would build a second headquarters somewhere in the United States, and invited cities to compete for the privilege of hosting its second headquarters, or “HQ2.” It was a public relations disaster. Mayors around the US bowed before Amazon and begged it to come to their cities. They spent millions of dollars on proposals and offered Amazon billions of dollars in special tax breaks. In the end, Amazon punted and chose two cities: New York and the suburbs of Washington, DC. It then backed out of its commitment to New York after the city threatened to reduce some of the tax benefits it had offered. It was a blow to the company’s reputation.
Bezos himself took a backseat role during the HQ2 fiasco, but he was the center of the other notable Amazon controversy of recent years: a very public divorce from his well-liked wife, Mackenzie, who helped in Amazon’s early days. The controversy also included an affair, a model, tabloid magazines, threats of blackmail, and explicit photos.
The company survived both those embarrassments. Amazon has largely avoided the high-profile controversies that have plagued other fast-growing companies. It had no governance scandals like WeWork; no Me-Too moments like Uber; no privacy fiascos like Facebook; no associations with bad actors like YouTube; no founders left, as at Instagram and WhatsApp.
That’s not to say everyone loves Amazon: far from it. It fought hard with book publishers over pricing of its e-books. Amazon relented over e-book pricing, but publishers still don’t trust it. Advocates for small business often protest that Amazon is destroying Main Street by putting small shops out of business. Indeed many brick-and-mortar businesses have suffered from Amazon’s deep discounts and free shipping. Workers have complained about the low wages at its warehouses and the creepy way that the company monitors worker performance.
Bezos is stepping back from his duties at a tense moment for the tech industry. Lawmakers in Europe and the US are belatedly coming to grips with the power of big technology companies. In June, Bezos himself testified before an American Congressional committee investigating whether or not his company is abusing its market power. One Congressman said Amazon was operating its own “private government.” Jassy, who has been with the company almost since its founding, will have to contend with political challenges on both sides of the Atlantic.
As for Bezos, he’ll have plenty to keep him busy. He is also the founder of Blue Origin, a spaceship company, and he owns The Washington Post, an influential American newspaper. He’ll also get to work on spending all the money he’s made. A few days after Amazon announced his retirement as CEO, the founder was spotted with his girlfriend on a luxury yacht off Cabo San Lucas, Mexico.
The many benefits of Amazon
Amazon is just so convenient. I’m running low on coffee filters; it was probably only three taps on my phone and I had ordered more. Free shipping, low price; they’ll be here tomorrow. I’ve been buying a lot of used books lately, too. These are books that libraries don’t need anymore or that people donate or sell. You can get used books for just a few dollars and they’re just as interesting and entertaining as the new ones, and you can save a lot of money.
Not everyone likes them, but it’s sure useful to me.
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