Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: YouTube search Bloomberg Global News. Well, Jeff Bezos, the household
Speaker 1: CEO name, do you want to game stop thing again? Oh? Yeah,
Speaker 1: I do, Thank you. So earlier we were talking to
Speaker 1: Dave Wilson and I said that game Stop stock had
Speaker 1: fallen into THEO had been in the single digits just
Speaker 1: a few weeks ago. I got was getting it confused
Speaker 1: with a MC, so I want to correct myself. It
Speaker 1: had fallen to you know, it had come from just
Speaker 1: about eighteen dollars a free weeks ago. Alright, so good
Speaker 1: to clarify. Since we've been watching the moves We've also
Speaker 1: been watching the moves at Amazon in terms of changing
Speaker 1: the CEO job. Jeff us us a household see you name,
Speaker 1: and I'm guessing now, Tim, that will become true for
Speaker 1: the new Amazon CEO who's taking on the top leadership
Speaker 1: job at the world's largest online retailer. We're talking about
Speaker 1: Andy Jasse. Let's get more about Jasse. Bloomberg News technology
Speaker 1: reporter Matt Day joining us on the phone from Seattle. Matt,
Speaker 1: great to have you here with us. Um, what do
Speaker 1: we need to know about Andy Jasse? A few things.
Speaker 1: He's as Amazon lifer. He joined in at a Harvard
Speaker 1: business school, so he's been you know, invasis his shadow
Speaker 1: for for quite a while. He's actually the first sort
Speaker 1: of chief of staff to Bezos. When they first established
Speaker 1: that role at Amazon, it was very much in the
Speaker 1: mold of the executive he's been following for for quite
Speaker 1: some time there. And what about when it comes to
Speaker 1: his role with Amazon Web Services. I mean, Amazon Web
Speaker 1: Services is by far the most profitable segment when it
Speaker 1: comes to Amazon, but it's by no means the biggest,
Speaker 1: that's right, Um, you know, and I think people were surprised,
Speaker 1: you know, it's just five six years ago now, when
Speaker 1: Amazon first broke out the revenue for Amazon Web Services,
Speaker 1: Andy jase A s into inception, Um, it is the
Speaker 1: biggest profit driver for the company. It's really reshaped how
Speaker 1: corporations of all sizes by their own technology. You know,
Speaker 1: they're far away the leading cloud computing company. I think
Speaker 1: it's his promotion really underlines the value of you know,
Speaker 1: this wonky tech business to a lot of people think
Speaker 1: of it as a primarily retail company. Matt, I love
Speaker 1: your story and you really get into who this guy is,
Speaker 1: and I'm curious. You know, it sounds like Jassy understood
Speaker 1: the potential for something like Amazon Web Services way before
Speaker 1: anyone else. I always talked about the time years ago
Speaker 1: when the Bloomberg story came out and was like, if
Speaker 1: you were streaming X y Z last night, you probably
Speaker 1: were doing it through an Amazon Web server. And we
Speaker 1: were like, what, wait, what is this business that Amazon's into?
Speaker 1: What was it that Jesse saw and that enabled him
Speaker 1: to kind of just get out there and in many
Speaker 1: ways own this market. Sub Jensing and Bezos and a
Speaker 1: few other Amazon executives fifteen years ago now, they looked
Speaker 1: at the way that companies eye technology, run technology and
Speaker 1: realized it was all, you know, kind of cumbersome and
Speaker 1: complicated a string together, so they worked to simplify it
Speaker 1: to its simplest parts, right, And that's that's really what
Speaker 1: they launched with. Here's an online storage service, here's an
Speaker 1: online you know, the equivalent of of processing power, raw
Speaker 1: raw computer chips for rent essentially, and by kind of
Speaker 1: breaking it down into its simplest parts, they made a
Speaker 1: really really simple case that you know, maybe customers wanted
Speaker 1: to string all this together themselves, and they were They
Speaker 1: were proved right by that. You know, folks did want
Speaker 1: that kind of simplicity and ease of use. Um, and
Speaker 1: it's really really shaped thing. What about when it comes
Speaker 1: to Jeff Bezos management style? Um, you know you said
Speaker 1: that Jasse has been at Amazon for as a lifer.
Speaker 1: I what does it mean in terms of how he's
Speaker 1: going to lead Amazon similarly or or different than Jeff
Speaker 1: Bezos has led it. He's definitely in the basos mods
Speaker 1: in terms of how these structures his team. Right. There's
Speaker 1: these these legendary weekly meetings will have where they dive
Speaker 1: into data and try to pick out trends and kind
Speaker 1: of lead with the customer and lead with the numbers.
Speaker 1: That's very Bezocene in the way that he structured it.
Speaker 1: I think it's too soon to tell how he's going
Speaker 1: to bring um what changed in my frame rather to
Speaker 1: the retail side of the business. And he's been diving
Speaker 1: into cloud for for a very long time. And though
Speaker 1: he's been in all the all the top meetings, you know,
Speaker 1: you haven't been running day to day operations for the
Speaker 1: company's sprawling other divisions. UM. I think we expectation is
Speaker 1: for a similar style to Bezos, and maybe something different
Speaker 1: as it gets his hands into the other elements of
Speaker 1: the company. Well, that's what I want to ask you,
Speaker 1: because you said very much in the mold of Jeff Bezos,
Speaker 1: which could be an incredible thing and certainly be calming
Speaker 1: to investors right now. But at the same time, you know, what,
Speaker 1: do what does Amazon need in a CEO going forward,
Speaker 1: especially then you still have the safety net of Jeff
Speaker 1: Bezos being around. I think Bezos which would probably say
Speaker 1: that Amazon still needs to make big bets. Um. You
Speaker 1: know they are. They are a giant company, and I
Speaker 1: think big it's the reputation for sort of winning in
Speaker 1: every market they enter Amazon doesn't be it that way.
Speaker 1: They look around and they see fierce competitors in in
Speaker 1: every area in which they play, whether it's Walmart, retail,
Speaker 1: Microsoft clouds, you know, there's plenty of others down the line.
Speaker 1: And so I think that the marching orders for him coming,
Speaker 1: and certainly, as Beatos would would rejected to keep making
Speaker 1: those kind of large bets that can move the needle
Speaker 1: for you know, it's already a one point seven trillion
Speaker 1: dollar company. Hey, Matt, what does this mean for Amazon
Speaker 1: Web Services now? Because look, since Amazon established a WUS
Speaker 1: years ago, there's so much more competition, and there's also
Speaker 1: pricing pressure for sure, and that's it's been a little
Speaker 1: bit of debate in the national analyst community. You know,
Speaker 1: what threat do uh Microsoft and Google, who are very
Speaker 1: much you know, following the ass playbook, what threat they
Speaker 1: present to Amazon's cash cow? You know, I think this
Speaker 1: this elevation certainly answers the you know, does Amazon want
Speaker 1: to cleave off Amazon Web Services conversation? It's been a
Speaker 1: long point of debate about whether it be worthwhile to
Speaker 1: spin off that unit, just because of the obvious differences
Speaker 1: from the retail business. Jazz think the top role probably
Speaker 1: cools that for for a little bit anyway, right, because
Speaker 1: do they in some ways it provides them a bit
Speaker 1: of a cushion to have that UH company part of
Speaker 1: you know, the Amazon umbrella at this point. Oh absolutely. Um,
Speaker 1: but I think there's just been some drag from the
Speaker 1: UH if you're sitting in the US side anyway, just
Speaker 1: all of the sort of political entanglements that Amazon has
Speaker 1: found itself in thanks to its market power and retail
Speaker 1: and some of the personal feuds between you know, foreign
Speaker 1: President Trump and Jeff Bezos. I think if if Andy
Speaker 1: were being a little candidate to Jesse, you might admit that,
Speaker 1: you know, being related to Amazon is maybe hurt a
Speaker 1: WUS and some sales conversations over the years with a
Speaker 1: Turkey political line to navigate for. And it's interesting too
Speaker 1: that you say, while they are similar creatures. Um, and
Speaker 1: he's very much into philanthropy, which is something that's how
Speaker 1: to Jeff Bezos. Yeah, and Amazon. I think overall, I
Speaker 1: would say, um, so great story. Um, Matt really appreciate it.
Speaker 1: Matt Day, tech reporter at bloom News. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Bloomberg Quick Takes Tim
Speaker 1: Stinovic from Bloomberg Radio. So, just a few days ago,
Speaker 1: the Associated Press came out with an analysis of seventeen
Speaker 1: U S States and two cities, and they found that
Speaker 1: black people inoculated with the COVID nineteen vaccine TIM at
Speaker 1: this disproportionately low level. So once again we see these inequities.
Speaker 1: It's not just happening nationwide, but here in New York
Speaker 1: City as well. Yeah, we'll definitely see that. So let's
Speaker 1: see what Bishop T. D. Jake's has to say about that,
Speaker 1: Chairman of td Jake's Foundation. He's on the phone once
Speaker 1: again with us from Dallas. Bishop Jake's good to have
Speaker 1: you here with us, and I know this is something
Speaker 1: that has been front and center for you. You all
Speaker 1: recently hosted an event that included Dr Anthony Fauci to
Speaker 1: get a better understanding of the COVID nineteen vaccine. Talked
Speaker 1: to us about that event and what the takeaways were
Speaker 1: from Dr Fauci. First of all, it's played you to
Speaker 1: be with you til today. Uh. We did conversation with America,
Speaker 1: which anybody can go see on two d j's YouTube channel. Uh,
Speaker 1: and we did an extensive conversation with Dr Kisomikia Corbid
Speaker 1: and dogg from your university, and she's from the Institute
Speaker 1: of Biology and Infectious Diseasus, And of course Dr Fauci,
Speaker 1: just to aggregate information and ask some questions that would
Speaker 1: help to alleviate some concerns or address some of the
Speaker 1: concerns that are prevalent in the African American community. Do
Speaker 1: you think those concerns Bishop Jake's are are being addressed?
Speaker 1: Are are you hearing that those concerns are are shifting
Speaker 1: as we learn more and more about the vaccines. I
Speaker 1: think that they are gradually shifting in certain pockets. Of course,
Speaker 1: African American community is not a monolith, and so depending
Speaker 1: on your age and who you congregate or coalesce with, UH,
Speaker 1: your perception of the situation might be varied according to
Speaker 1: your age group of how closely associated you are with
Speaker 1: a tremendous amount of deaths that we are saying. Being
Speaker 1: a pastor, also, I'm abundantly aware of how many funerals
Speaker 1: were conducting and really have a front row seat on
Speaker 1: the families behind the numbers. So it's very apparent to
Speaker 1: me that we are definitely losing lives that a much
Speaker 1: larger rate than our white counterparts, and I thought it
Speaker 1: was really important to maybe use our platform to level
Speaker 1: the plane for and get out adequate and accurate information
Speaker 1: so that people can make their own determination right. The
Speaker 1: CDC did come out and they've talked about Black, Hispanic
Speaker 1: and Native American people dying from COVID nanteen it almost
Speaker 1: three times the rate of white people. So, Bishop Jakes,
Speaker 1: do you feel like things are improving, that there's more
Speaker 1: information out there, maybe education to put the Black community
Speaker 1: maybe more at ease so that they will up in
Speaker 1: terms of their numbers for getting the vaccine. My biggest
Speaker 1: concern is that even where the attitude is improving, the
Speaker 1: access is not. But we're only having about penetration and
Speaker 1: into the black community where it is accessible, particularly to
Speaker 1: our older citizens, where they can easily get into one
Speaker 1: and then come back and get the second fascination that's
Speaker 1: necessary to uh secure some relative safety from from being infected,
Speaker 1: and so that that is a problem. Accessibility is a problem,
Speaker 1: and then dispelling risk continues to be a challenge. I
Speaker 1: think it's something that we're going to be working on
Speaker 1: all through first and second quarter of the year, probably
Speaker 1: into the third quarter, getting them comfortable just due to
Speaker 1: the fact that we've had so many historical discouraging UH
Speaker 1: incidents that have occurred between health professionals, the government officials,
Speaker 1: and the Black community that have continued to call for
Speaker 1: and angstent and anxiety amongst people of color and trust
Speaker 1: associated with taking the vacination right. I think it's important
Speaker 1: to keep in mind there is historical context and lots
Speaker 1: of reason for people to be skeptical, especially in the
Speaker 1: Black community, about this UM very brief so, you are
Speaker 1: a great communicator. You have more than four million Twitter followers,
Speaker 1: You've built up a huge following. What is the right
Speaker 1: way for the Biden administration or even local officials to
Speaker 1: communicate in communities throughout the United States that this is
Speaker 1: a vaccine that is safe and that people need to
Speaker 1: get I think that the community most trust its own leadership.
Speaker 1: That there are various leaders on the Baith community is
Speaker 1: one aspect of it, but also personalities of interests that
Speaker 1: also have coalesce huge following the people UH that they
Speaker 1: trust their motives. I think that's one aspect of the
Speaker 1: I think people, every day, people off the street influence
Speaker 1: people more than even personalities too, so I think they
Speaker 1: have to use a multiple approach in order to miss
Speaker 1: film miss and unfortunately you're also fighting the onslaught of
Speaker 1: social media and wrong information being pratentuated through all those vehicles. Well,
Speaker 1: and I think everyone hopes too, that is people see
Speaker 1: more and more people get the vaccine, and as time
Speaker 1: goes on and hopefully with a safe outcomes that more
Speaker 1: people will step up and take it. Um. Bishop Jake's
Speaker 1: always good to check in with you, be well, Chairman
Speaker 1: of the T. D. Jake's Foundation. On the phone from Dallas.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovich from Bloomberg Radio. Well, I gotta say, Tim,
Speaker 1: I've lost count how many COVID related cover stories Bob
Speaker 1: Lingrith has done for Business Week. He's covered Guilliad from Desevie,
Speaker 1: He's covered the White House COVID outbreak. It has been
Speaker 1: so many different stories and we've learned so much from him. Yeah,
Speaker 1: we certainly have. And this one is the cover story
Speaker 1: and the cover of Bloomberg Business Week this week is
Speaker 1: ready for the next one. And it features a large
Speaker 1: picture of a bat. Yes it does. So it's really
Speaker 1: kind of warning us. Here's what we've got to do
Speaker 1: to be ready for the next one. Let's get into
Speaker 1: it with Bob. He is healthcare reporter at Bloomberg News
Speaker 1: on the phone in New Jersey, along with Bloomberg Business
Speaker 1: Week editor Joel Webber on the access line in Brooklyn.
Speaker 1: It's a reminder, joll, there will be more pandemics and
Speaker 1: epidemiological crisises. Um, we've got a plan for it. Well,
Speaker 1: we need a plan for it. And you know that
Speaker 1: the cover line they're ready for the next one. It
Speaker 1: ends with the question mark like ready for the next one,
Speaker 1: and right now we are not. And UM. What Bob did,
Speaker 1: um and reported out here, and I've lost track of
Speaker 1: how many cover stories Bob's done over the course of
Speaker 1: the last year for us, it's been truly amazing. Um.
Speaker 1: But what he really maps out here is the five
Speaker 1: point plan. And if we were to get on it
Speaker 1: and you know, jump all over this five point plan,
Speaker 1: we might find ourselves, um, in a pretty decent place,
Speaker 1: certainly a better one than we found ourselves in a
Speaker 1: year ago. Right about now, um, and Bob, along the way,
Speaker 1: you also got some exclusive reporting about you know, how
Speaker 1: close we were to actually maybe having a leg up
Speaker 1: on on viruses like this. Um, so walk us through
Speaker 1: what what you learned, um as you reported out your
Speaker 1: cover story. Yeah, so it turns out that as I did,
Speaker 1: they're supporting you know that there were a lot of
Speaker 1: people thinking about this and interested. You know, year didn't
Speaker 1: know it was going to be a coronavirus, but everyone
Speaker 1: knew something was coming eventually, the infectious dis these experts
Speaker 1: did and there weren't people that were thinking about how
Speaker 1: to prepare, on how to do things. But uh, there
Speaker 1: just wasn't the WheelPower and energy to get it done.
Speaker 1: And one company, Glastow Smith Client I found out the
Speaker 1: very reporting actually proposed a whole uh kind of epidemic
Speaker 1: preparedness vaccine research center. They proposed this to the US
Speaker 1: government to BARDA, which is what's funding a lot of
Speaker 1: the vaccines now at a small agency funding a lot
Speaker 1: of the vaccines now. And they proposed a research center
Speaker 1: that would have looked in specifically into Messenger RNA vaccine
Speaker 1: that's one of the successful vaccines, and Anno virus space
Speaker 1: saccine that's the other type of vaccine has been successful
Speaker 1: in The idea was they would have taken like everything, uh,
Speaker 1: that you know, looked worrisome and gotten prototype vaccines into
Speaker 1: early trials so they could be ready to go and
Speaker 1: invent the next epidemic. But it just didn't happen. So
Speaker 1: we weren't quite as a here, you know, as we
Speaker 1: should have been right, and we should have been right,
Speaker 1: we could have been That's the whole point. And the
Speaker 1: cost of this thing, Yeah, it would have been five
Speaker 1: million over ten years, which I guess sounded like a lot,
Speaker 1: you know, three or four years ago, but compared to
Speaker 1: the costs he's had to bear now through this pandemic. Uh,
Speaker 1: you know, it's just you know, nothing like that. Now
Speaker 1: people are kind of dusting off versions of the proposal
Speaker 1: and saying, let's do it again, let's do something similar,
Speaker 1: And then some of these ideas are out there is
Speaker 1: what you know, we need is the willpower to do it.
Speaker 1: Another idea that's out there is to form me. And
Speaker 1: one of the problems they had is is good you know,
Speaker 1: data on the right these key moments when epidemics are
Speaker 1: starting to emerge. You know, it's sort of like a
Speaker 1: early in a forest fire. You got to identify it
Speaker 1: and identify the threats really soon and act and for that,
Speaker 1: you need really really good surveillance and really really really
Speaker 1: good data. And one of the ideas that's out there
Speaker 1: is to form a sort of a national weather uh
Speaker 1: service style agency that would model uh you know, upcoming
Speaker 1: emerging virus is a pandemics that come up with forecasts
Speaker 1: or more reliable uh you know, to tell to warn people,
Speaker 1: tell them you know what's coming or what might be coming,
Speaker 1: and they give politicians kind of the fortitude and cover
Speaker 1: to act. What about when you find amustriction was looking
Speaker 1: into what about when it comes to international cooperation and
Speaker 1: making sure there is international cooperation for the next pandemic.
Speaker 1: One of the key themes that you highlight is repairing
Speaker 1: and augmenting the w h O. Yeah, and this is
Speaker 1: probably you know, this is an area that people are
Speaker 1: talking about, and it's probably the twickiest, most difficult area
Speaker 1: to to to fix or improving reformed, because the basic
Speaker 1: problem we have is, you know that the viruses they
Speaker 1: cross borders. They don't care about you know, countries, and
Speaker 1: isn't not the national borders or you know, which political
Speaker 1: regime is in power, They go everywhere. And that's what
Speaker 1: we found, uh And yet uh so we want companies
Speaker 1: countries to cooperate as much as possible in reporting the
Speaker 1: early stages of pandemic. But the problem is no one
Speaker 1: really has the authority to do that too. And and
Speaker 1: and if countries that don't report on times, if they
Speaker 1: don't want to admit the scope of the problem, that
Speaker 1: might hurt their economy, etcetera. And we've seen this again again,
Speaker 1: then the world is a step behind. And the w
Speaker 1: H o uh, you know, it doesn't have a lot
Speaker 1: of teeth. That's just the way structured. So there's there's
Speaker 1: rumblings and discussions of what else can we do? You know,
Speaker 1: what can can we give a w H and more teeth?
Speaker 1: But we can can we add to it to give
Speaker 1: some other groups uh sort of a it's called like
Speaker 1: a you know, a NATO furbridging emerging viruses, your biological
Speaker 1: NATO have you know a little more power maybe a
Speaker 1: group of like minded nations to prepare there. So that's
Speaker 1: that's kind of ideas out there that people are trying
Speaker 1: to formula and try to figure out what to do.
Speaker 1: But that's probably a single most difficult area. But but
Speaker 1: another thing that um you talk about in the story
Speaker 1: is effectively how blind we're flying right now, especially as
Speaker 1: these variants start to come at us. And and really
Speaker 1: the solution there is genetic sequencing. How can we improve
Speaker 1: our genetic sequencing which is almost like a non existing
Speaker 1: at this point in the US. Yeah, I mean that
Speaker 1: should be one of the uh simpler areas to fix.
Speaker 1: I mean, you know, we have become of the technology
Speaker 1: is there, We have the technology, we just kind of
Speaker 1: haven't applied this in a national scale and made it
Speaker 1: a priority. And then you know which you know some
Speaker 1: other countries have done. They're far ahead of us on this.
Speaker 1: I think we sequence about three out of a thousand
Speaker 1: uh cases of the virus, so we just get a tiny,
Speaker 1: tiny sampling, and some other countries like England are doing
Speaker 1: five percent, some smaller countries or even doing more. So
Speaker 1: we're kind of way way behind. And this is something
Speaker 1: just basically a national effort, uh and making a national
Speaker 1: priority of that would just make a big difference. And
Speaker 1: the other thing that needs to be done is it
Speaker 1: needs to be an effort to kind of push more
Speaker 1: the sequencing expertise. Because we're a federal system, a lot
Speaker 1: of things are in states and local public health labs
Speaker 1: that we need an effort to push a lot of
Speaker 1: the expertise out into state and local public health labs.
Speaker 1: They're doing the contract tracing. But this is fixable. Someone
Speaker 1: just needs to make it a priority. Yeah, it's really logical.
Speaker 1: And you have four and five, you stay developing more
Speaker 1: vaccines faster for those uh kind of worse and virus
Speaker 1: classes that are out there, like let's go, let's start
Speaker 1: working on them now. And also a big one which
Speaker 1: we know has been a problem, ironing out distribution and logistics.
Speaker 1: It's the cover story of the US Bloomberg Business Week
Speaker 1: and we'll put that out on Twitter. But it's a
Speaker 1: great kind of five point list of things that we
Speaker 1: need to do. Um, Bob, thank you so much, really appreciated.
Speaker 1: Bob lane grath He his healthcare reporter at Bloomberg News.
Speaker 1: All of his reporting and COVID has been incredible. Our
Speaker 1: thanks to the Business Week. Get it or Jill Webber
Speaker 1: on the Access line in Brooklyn. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic
Speaker 1: on Bloomberg Radio. So it's the story that brooke late yesterday,
Speaker 1: the business story heard around the globe. Safe to say right,
Speaker 1: I don't know what you're talking about, Carol. Jeff Bezos, Haye,
Speaker 1: Tim stepping down a CEO. Yeah. Look, when you think
Speaker 1: of Amazon, you think of Jeff Bezos. Started in his
Speaker 1: garage in the nineties, took a public a couple of
Speaker 1: years after starting it. The guy has been running it
Speaker 1: since then. Yeah. And as our Bradstone rights, the move
Speaker 1: seemed like, uh, despite being a surprise, seemed like the
Speaker 1: natural next step and opens up really a new age
Speaker 1: for the world's largest online retailer. So let's get into
Speaker 1: it with our go to voice on Everything Amazon. He's Bradstone,
Speaker 1: Senior Executive editor of Global Technology, author of The Everything Store,
Speaker 1: Jeff Bezos and the Age of Amazon. And Brad's got
Speaker 1: a new book coming out to that's on Amazon called
Speaker 1: Amazon on Bound. And Brad joins us on the phone
Speaker 1: in San Francisco. That book comes out in May, available
Speaker 1: for pre order. So you are such are Amazon insider,
Speaker 1: Amazon veteran. But you were surprised by this news, right, Carol.
Speaker 1: I was telling Tim actually earlier today, but I think I, uh,
Speaker 1: you uttered a loud expletive when I saw the news. Um.
Speaker 1: In some in some ways it is it does feel
Speaker 1: like a natural progression and the formulation of the formalization
Speaker 1: of the status quo at Amazon. Were he certainly been
Speaker 1: working on new things and allowing his deputies to run
Speaker 1: the bigger businesses. But it's also surprising. I mean, you know,
Speaker 1: he someone who know micromanaged his businesses, whose identity is
Speaker 1: wrapped up in Amazon, who obviously took and deserves, you know,
Speaker 1: a lot of credit for the remarkable rise of this
Speaker 1: company over the past twenty five years one point seven
Speaker 1: dollars at one point seven trillion dollars in market cap um.
Speaker 1: So it's hard to imagine him moving on them. It's
Speaker 1: probably gonna be a little bit of a test of
Speaker 1: of Andy Jasse to see how much room he has
Speaker 1: and can take to operate with Bezos still there as
Speaker 1: executive chairman and placing a lot of these big bets.
Speaker 1: Were you surprised at all by Andy Josse being the
Speaker 1: person who was named to Phil bezos shoes, Not at all,
Speaker 1: And in some respects though, you kind of look back
Speaker 1: and you wonder whether this has been in the works
Speaker 1: for a while. So there was a lot of speculation
Speaker 1: about the succession plan and whether it was Jassy or
Speaker 1: Jeff Wilkie. You know, Wilkie was another deputy who for
Speaker 1: many years ran the retail group before that really architected
Speaker 1: Amazon supply chain. You know, he he was a possibility
Speaker 1: to takeover as well. And then last year we found
Speaker 1: out that Wilkie was going to retire in January of
Speaker 1: two twenty one. So who knows, maybe the writing was
Speaker 1: on the wall and he saw it. But where it
Speaker 1: does make sense is is Jase has you know, built
Speaker 1: this amazing business AWS a fifty billion dollar run rate,
Speaker 1: you know, really changed the way companies and governments and
Speaker 1: universities by their technology. You know, now they do it
Speaker 1: in the cloud or rather than servers in the in
Speaker 1: the back room. Um, he's he's changed enterprise contributing. You've
Speaker 1: got Microsoft and Google and iby him and Oracle pursuing Amazon.
Speaker 1: But Jack also has the you know, the full handle
Speaker 1: on the full company because he sat on the s team.
Speaker 1: He's been a part of major decisions like where to
Speaker 1: put hqu two and whether to buy Whole Food. And
Speaker 1: when he started at the company in the late nineties,
Speaker 1: he worked in the retail group, so he really had
Speaker 1: the full scope of the company and it kind of
Speaker 1: makes sense that he'd be the guy to step up,
Speaker 1: all right. I have to say that in your story,
Speaker 1: I was drawn to this. She's a bezas His decision
Speaker 1: to step down also reflects an uncomfortable reality for one
Speaker 1: of the wealthiest people in the world, and that is
Speaker 1: the walls of his highly compartmentalized empire have been crumbling
Speaker 1: for some time. I don't look at Amazon, Brad typically
Speaker 1: and think of it as crumbling. But so, what do
Speaker 1: you mean, right right? Well, actually that's a good point,
Speaker 1: Carol So, and this is a theme of my upcoming
Speaker 1: book US. You know, it's the largest shareholder and the
Speaker 1: out going CEO of Amazon, but he also owns The
Speaker 1: Washington Post. Personally, he has a private space company, Blue Origin.
Speaker 1: He's got an investment fund in a family office, and
Speaker 1: he's got these philanthropies now UM the Day One Fund
Speaker 1: and the Bezos Climate Fund or the Bazos Earth Fund,
Speaker 1: and a lot of there's a lot of pressure on
Speaker 1: him to give away his money. And over the past
Speaker 1: few years we've seen a collision on all these assets.
Speaker 1: So the Washington Post made life very difficult for Amazon
Speaker 1: during the Trump administration. UM, you've got um union organizers
Speaker 1: and and and and workers protesting Amazon's treatment of its
Speaker 1: of its warehouse workers in front of Bezos, you know,
Speaker 1: personal properties homes around around the country. Um. And and
Speaker 1: as he's been trying to give away his money to
Speaker 1: climate organizations, they've expressed concern about Amazon's climate impact. And
Speaker 1: it's it's it's a relationship with organized labor. So that's
Speaker 1: what I mean by the walls are kind of crumbling.
Speaker 1: You can't keep everything compartmentalized anymore. You also have this
Speaker 1: anecdote about him traveling to India in the early part
Speaker 1: of last year and Prime Minister Norrendrew Moody declining to
Speaker 1: me with him because of the post coverage of the country.
Speaker 1: I guess my question is, can you then, with Jeff
Speaker 1: Bezos as executive chairman but no longer as CEO, will
Speaker 1: that help solve some of these issues? Or is he
Speaker 1: like inextricably bound to Amazon. Yeah, that's a great point
Speaker 1: to him. It's he can't escape it that easily. Um.
Speaker 1: You know, for for guidance, we can kind of look
Speaker 1: to Bill Gates though, right who who has really seen
Speaker 1: twenty years ago as a as a monopolist, you know,
Speaker 1: sharp business elbows? Um. The government, the way of the U. S.
Speaker 1: Government is coming down on Microsoft. And now he's really
Speaker 1: a roving philanthropist diplomat who has been a leader um
Speaker 1: in this in this pandemic crisis. So yeah, in the
Speaker 1: short term, no, I mean, Jeff obviously can't outrun Amazon,
Speaker 1: and he'll be inextricably linked to the company and all
Speaker 1: of its political issues. But maybe over the long term,
Speaker 1: as Bill Gates has done, he can kind of start
Speaker 1: a path for himself as a more independent philanthropist. Listen,
Speaker 1: and Jeff made it very clear, um Brad that he's
Speaker 1: not retiring. Um So where should he Where will he
Speaker 1: spend most of his time going forward? It's only going
Speaker 1: to be about the geeky inventions and the big and
Speaker 1: the bets that he thinks could lead to Amazon's next
Speaker 1: wave of growth. And this is one of those things
Speaker 1: that I observed reporting the new book. He he loves
Speaker 1: to micromanage and and and really get into the weeds
Speaker 1: of the new things. Um So, I'm gonna mute my
Speaker 1: Alexa before I say the word Alexa. But he's really
Speaker 1: he really micro managed Alexa, the the cash sheerless Amazon
Speaker 1: ghost stories. He was he was deeply involved in that
Speaker 1: the healthcare initiatives. Amazon is trying Project Typer, which is
Speaker 1: this very expensive effort to get satellites into space and
Speaker 1: to sell internet access. He's involved in that, and you
Speaker 1: know he sees these big bets. He's really an inventor
Speaker 1: at heart. Um, I'm sure they'll read him into the
Speaker 1: big decisions. They call him one way doors kind of
Speaker 1: Amazon lingo for decisions that can't be reversed. But I
Speaker 1: expect that, in addition to all the other stuff, he's
Speaker 1: going to continue to basically geek out at Amazon. Brad,
Speaker 1: I want to talk about space. When it comes to
Speaker 1: the wealthiest people in the world. Uh, Jeff Bezos is
Speaker 1: number two. Elon Musk is number one according to the
Speaker 1: Bloomberg Billionaires Index. They are both involved in a new
Speaker 1: kind of base race. Where does Jeff Bezo stack up
Speaker 1: versus Elon Musk? Right, well, it's it's not a favorable
Speaker 1: juxtaposition at least right now. I mean, SpaceX is launching
Speaker 1: it seems every week, the Dragon nine to um to
Speaker 1: orbit to the International Space Station. Um, it's it's uh,
Speaker 1: it's been it's been testing. I guess the Starship, the
Speaker 1: larger rocket with kind of kind of entertaining. Entertainingly exploded
Speaker 1: upon attempted landing yesterday. But UM SpaceX also announced that
Speaker 1: they're going to be bringing paying astronauts, paying tourists to orbit,
Speaker 1: and and Blue Origin, you know, frankly hasn't really hasn't
Speaker 1: really hit any of those benchmarks. It it has always
Speaker 1: taken a more step by step approach. UM. The first
Speaker 1: project is called New Shepherd, and he wants to take
Speaker 1: like like Richard Branson, Blue Origin wants to take paying
Speaker 1: tourists to suborbital space at the very edge of space.
Speaker 1: And they've been working on that for a fifteen years
Speaker 1: years and I gathered I reported that they're gonna that
Speaker 1: they're hoping to take human passengers later this year. But
Speaker 1: that's gonna be a big test for the CEO, Bob Smith,
Speaker 1: who joined a couple of years ago UM, to see
Speaker 1: whether they can really safely pull that off. And then
Speaker 1: Blue origins building a rocket called New Glen, which will
Speaker 1: more directly compete with SpaceX is launch capacity, but that's delayed,
Speaker 1: and that's probably got a couple of years until it
Speaker 1: comes out of the factory. So Basis spends a lot
Speaker 1: of money on this. I you know, they profess that
Speaker 1: it's not a competition, that they're taking their time. There's
Speaker 1: lots of room for many winners in this growing category.
Speaker 1: But I know that I I suspect and strongly suspect
Speaker 1: that the mismanagement there and the solo progress really frustrates
Speaker 1: Jeff Bezos. Yeah, it's got to. And you know too,
Speaker 1: and I were talking in the break Brad, I remember
Speaker 1: when it felt like these space companies, whether it was Branson,
Speaker 1: whether it was Elon Musk, whether it's Jeff Bezos, that
Speaker 1: it just seemed like a kind of a fun thing
Speaker 1: for billionaires. Elon Musk is shown it's a lot more
Speaker 1: serious than that and a business um going forward. I
Speaker 1: do wonder, speaking of fun, the timing of this is
Speaker 1: it just not as much fun to run the company.
Speaker 1: I'm just trying to understand a little bit about Jeff
Speaker 1: Bezos and his timing. Well, you know, we don't, of
Speaker 1: course know for sure, because they're being very circumspect in
Speaker 1: what they say, but we can we can take a
Speaker 1: couple of guesses as to why Bezos has has moved
Speaker 1: is moving on later this year from the CEO role
Speaker 1: to be executive chairman, And I think you're right. I
Speaker 1: mean one of it. One of the factors is that
Speaker 1: the CEO of the company is going to be the
Speaker 1: guy getting grilled in Washington, getting grilled by the FDC,
Speaker 1: getting grilled in in Brussels. And as we saw last
Speaker 1: year when Bezos had to testify in front of the
Speaker 1: House Antitrust Subcommittee, he would probably be rather doing other things.
Speaker 1: And you've got you know, Larry Page and Sergey Brandon.
Speaker 1: Google is now completely invisible and Sundar has to go
Speaker 1: answer the question. So yeah, I suspect um, he would
Speaker 1: rather be spending his time doing other things. But look,
Speaker 1: I think it's also that he's he wants to make
Speaker 1: a filic philanthropic contribution and his time is pretty constrained. Um.
Speaker 1: And also you know there's he he you know, probably
Speaker 1: he's earned two he has a two billion dollar fortune
Speaker 1: and probably wants to take it a little bit easier.
Speaker 1: So and the fact that he's really not going anywhere
Speaker 1: and will continue to contribute to Amazon. So I think
Speaker 1: those are all part of part of the larger picture. Brad.
Speaker 1: You you mentioned before you went to break talking about
Speaker 1: the initiatives that in the past Bezos has worked on.
Speaker 1: Some of the hardware efforts the company Alexa for example. Um,
Speaker 1: what does that tell you about what Bezos is thinking
Speaker 1: about as executive chairman? I mean, what are the sort
Speaker 1: of you know, borrow a Google phrase, the moon shots
Speaker 1: that the company is thinking about right now. Yeah, Well,
Speaker 1: from a broad perspective, you know, he he believes that
Speaker 1: Amazon at the current size needs to take really big
Speaker 1: best if it's going to continue growing. And and so
Speaker 1: that's you know, where he's spending his time. He's he's
Speaker 1: focused on the kind of future horizon, this technology, artificial intelligence,
Speaker 1: machine learning, UM, satellite born internet access. Amazon has an
Speaker 1: ambitious project called Project Keyper that competes with Elon Musk's
Speaker 1: star Link of Space. Yeah, exactly, there's a real rivalry there. Um.
Speaker 1: The healthcare initiative. They have a group inside Amazon that
Speaker 1: they called the Grand Challenge, And in a very Amazon
Speaker 1: like way, they're not crying one thing to trying many things.
Speaker 1: So they have a telehealth service for employees that they're
Speaker 1: going to start offering to other companies. They have walk
Speaker 1: in clinics. There are things that you can do with
Speaker 1: Alexa and ask it health questions. Of course, there was
Speaker 1: have in healthcare with JP Morgan and Bookshire Halfway, which
Speaker 1: they just closed. And I think Jeff very very involved
Speaker 1: in that and determining what experiments should proceed. So that's
Speaker 1: where he's going to spend his time to place those next.
Speaker 1: Bet all right, give us a twenty second tease, elevator
Speaker 1: pitch or just a tease for your book coming out
Speaker 1: Amazon Unbound, coming in May. How did a company in
Speaker 1: two thousand thirteen with a hundred and fifty thousand employees
Speaker 1: and one fifty billion dollar market cap turn into the
Speaker 1: one point seven trillion dollar company with one point two
Speaker 1: million employees. I turned off the whole path in addition
Speaker 1: to bazos evolution into this international man of mystery and
Speaker 1: tabloid fatimy. Sounds great. I'm gonna put my preorder in.
Speaker 1: You can already pre order now, do it? I mean, look,
Speaker 1: the Everything store was so good. I can't wait for
Speaker 1: this one. Brad all Right, Brad Stone, Senior executive editor
Speaker 1: of Global Tech here at Bloomberg Road Mac Journal. Now,
Speaker 1: but you let me drive. Oh no, no, no, no, honey, please,
Speaker 1: I'll do the riding. I want to drive. Just drive
Speaker 1: by question. Try this is the drive to the Globe community.
Speaker 1: Thanks we'll try us on Bloomberg Radio. Great, it's just
Speaker 1: about eleven minutes to go until we wrap up this
Speaker 1: trading day. And we've got the SMP off its best
Speaker 1: levels of the day down pretty much just at its
Speaker 1: best levels of the day, and the NASDACA office ties
Speaker 1: and lows. Let's get into it with Alan Zaffron, founding
Speaker 1: partner and co CEO at I e Q Capital. They've
Speaker 1: got roughly eleven and a half billion in assets under management,
Speaker 1: and uh Allen joining us on the phone from Foster City, California. Allen,
Speaker 1: good to have you here with him of myself, how
Speaker 1: are you doing? Fantastic, Caroline, Tim Hopefully you dug yourself
Speaker 1: out of the snow and you're doing reasonably well. Halfway.
Speaker 1: Car My car wouldn't move this morning now. And but
Speaker 1: you know you're in California, so you know you have
Speaker 1: little sympathy. You know, I don't get it. We paid
Speaker 1: the high tax. This you're like in New York, but
Speaker 1: we don't get the snow. Want to talk about it, California.
Speaker 1: Jim's cars frozen in a part, literally frozen in a
Speaker 1: parking lot, and my back hurts as a result. So gosh,
Speaker 1: what a week. Where do I start. Let's talk about Amazon,
Speaker 1: because we are all in on it today us safe
Speaker 1: to say twenty four hours ago are close to it.
Speaker 1: We were all shocked by the news that essentially Jeff
Speaker 1: Bezos resigning as the CEO of the company not going away.
Speaker 1: But you like and you look at some of these,
Speaker 1: you know, big US companies, some of these big US
Speaker 1: growth stocks. How do you see that news? I don't
Speaker 1: find it that surprising, um unless obviously business has done
Speaker 1: an incredible job, unworldly, one of the greatest business transformations
Speaker 1: we've we will ever witness. But the timing ain't bad.
Speaker 1: Think of it this way. You took a company from
Speaker 1: nothing to you know, a massive amount of value, two
Speaker 1: trillion in value. Do you really want to be the
Speaker 1: person that tries to get up to four trillion in value?
Speaker 1: It's it is not going to be his rewarding. And
Speaker 1: the other issue for Jeff He's got a lot of
Speaker 1: other business interests. He actually has a charity that he's
Speaker 1: trying to give ten billion dollars away from climate change.
Speaker 1: He's running a space business at Frankly Blue Origin that's
Speaker 1: behind SpaceX. He's got an ego just like Elon musk,
Speaker 1: and he probably wants to focus on some other aspects.
Speaker 1: And lastly, to give me this way, he's still got
Speaker 1: two hundred billion dollars of personal equity in the company.
Speaker 1: So when he's stepping away, he's not really completely stepping away.
Speaker 1: He's got a team of twenty six people back again,
Speaker 1: that's his steam. He's already been groomed to take over
Speaker 1: for him, so far from being at a shock, it's
Speaker 1: kind of time for him to step away, let the
Speaker 1: other people run the business, and he's going to have
Speaker 1: plenty of strategic influence and insight going forward anyway. So
Speaker 1: it's it's time. One number that we've heard a lot
Speaker 1: today Alan has been one point seven trillion dollars. It's
Speaker 1: the market tap of Amazon right now. And I know
Speaker 1: thanks to a note from our producers that you think
Speaker 1: that future returns are both stocks and bonds even right
Speaker 1: now likely constrained by today's elevated valuations. Um. What do
Speaker 1: you think is overvalued? Um? I think the biggest thing
Speaker 1: that's overvalued is traditional bonds, not stocks. However, when you
Speaker 1: value stocks in the end, what you're doing is you're
Speaker 1: valuing the future cash flows, which are based on where
Speaker 1: rates are discount rates. Game Stop excluded from this. Yeah,
Speaker 1: I didn't use my surplus check to buy call options
Speaker 1: on game Stop like others. UM. When you start to
Speaker 1: see interest rates rise, I believe that is the singular
Speaker 1: greatest fundamental threat to the stock market. UM. I don't
Speaker 1: think you're going to see a rapid, dramatic and horrible
Speaker 1: rate rise in rates, because I think the settle reserve
Speaker 1: is gonna slowly jawbone and manipulate that rate to move
Speaker 1: up in a more orderly fashion. You'll get it coming
Speaker 1: up in fits and starts over years, not over months
Speaker 1: or quarters. But because rates eventually creep up, they compete
Speaker 1: with stocks or where capital goes, and basically people pay
Speaker 1: lower multiples on their earnings on those stocks once rates
Speaker 1: go higher and higher. Or think of differently, your present
Speaker 1: value is worth less when you're using a higher discount
Speaker 1: rate of future cash flow. So that's a long winded
Speaker 1: way of saying. When you do the math, if you
Speaker 1: thought you were going to make ten percent in the
Speaker 1: next decade on stocks, maybe you're gonna make seven percent.
Speaker 1: It's not zero, and it's still better a lot better
Speaker 1: than bonds, but it's probably lower than the percent you
Speaker 1: made in the previous ten years, which was higher than
Speaker 1: ten percent a year. So this decade, maybe we give
Speaker 1: back a little of the over return we made in
Speaker 1: the previous decade. Okay, so you're saying the bond Wait,
Speaker 1: I'm sorry. So are you saying bonds are the better
Speaker 1: way to go? No? No, far from it. To be clear,
Speaker 1: I think traditional bonds are not a terribly attractive asset
Speaker 1: class because you get you know what you're making the
Speaker 1: moment you buy it, which are treasury bond right now,
Speaker 1: I was one percent called corporate bonds are about two percent.
Speaker 1: I do think stocks are going to give you a
Speaker 1: much higher return than bonds, but instead of making ten
Speaker 1: percent per year, because I think eventually the pricey multiples
Speaker 1: dropped from what they are today, that reduces the return.
Speaker 1: If you work it out in the mass, what might
Speaker 1: have been a ten percent return looks more like a
Speaker 1: seven percent return. Because even on paying twenty three times
Speaker 1: earnings today and years from now, someone's going gonna pay
Speaker 1: sixteen times those earnings, the earnings are going to grow
Speaker 1: a lot. The sixteen times a lot of earnings will
Speaker 1: work out to my money growing at about seven percent
Speaker 1: a year. But not ten percent a year, So it's
Speaker 1: like getting back to more realistic views. Certainly, when it
Speaker 1: comes to the equity returns, is that fair historical returns?
Speaker 1: I think that's right. But one of the important caveat
Speaker 1: it turns out pe ratios valuations literally have zero predictive
Speaker 1: ability over the next twelve months about where the markets
Speaker 1: are going. So even if I tell you the markets
Speaker 1: marginally over versus averages, they could just get more overvalued
Speaker 1: over the next year. And with all the stimulus that's
Speaker 1: been thrown in this economy and consumers being in great shape,
Speaker 1: I wouldn't be surprised that the stock market does better
Speaker 1: than ten percent this year. I think all the conditions
Speaker 1: are in place for a very strong year this year.
Speaker 1: Eventually rates will move up and multiple will compressive. Well,
Speaker 1: NASA nastas already at five percent year to date, so
Speaker 1: it's you know, halfway there. Um. I do wonder about
Speaker 1: when you think of portfolio construction, you think there are
Speaker 1: opportunities away from traditional equities and fixed income, private private
Speaker 1: real estate, private credit, and equity replacements. What are the
Speaker 1: what are the alternatives that you're thinking about? Uh, Well,
Speaker 1: in a world where I can only make one percent
Speaker 1: after tax buying high quality bonds cement. It can find
Speaker 1: the right vehicles either reefs, either in the public markets
Speaker 1: or even in the private markets, if properly structured, can
Speaker 1: give me a good way to return. It turns out
Speaker 1: there are firms that make private loans the private businesses,
Speaker 1: and if they're thoughtfully done, where you're the s in
Speaker 1: your lender and have the lean on all the collateral
Speaker 1: and assets, you could argue that made closer to eight
Speaker 1: it's taxable. That's still after tax four or five. That's
Speaker 1: a lot more interesting. There are other obscure areas of
Speaker 1: the market, things that are called secondary investments. When you're
Speaker 1: actually buying someone else's liquid investment. They need cash and
Speaker 1: they are willing to sell to you at a discount
Speaker 1: from the current value that that investment. They want to
Speaker 1: get out. All right, we're gonna leave it there. Allen Zafron,
Speaker 1: thank you so much. Founding partner and co CEO at
Speaker 1: I e Q Capital eleven and a half billion in
Speaker 1: assets under management. On the phone from Foster City, California.
Speaker 1: You're smiling. Yeah, California must be nice right now. I
Speaker 1: can't wait for you to be able to dig out
Speaker 1: your car, it's a little warmer. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
Speaker 1: Bloomberg dot com, and you can also listen to our
Speaker 1: radio show at two pm Eastern on Bloomberg Radio or
Speaker 1: watch us on YouTube. Sarah to Bloomberg Global News