Speaker 1: Get in touch with technology with tech Stuff from how
Speaker 1: Stuff Looks dot Com either everyone and welcome to tech Stuff.
Speaker 1: I'm Jonathan Strickland, a host of tech Stuff, and I'm
Speaker 1: Lauren bog Obam another post of tech stuff. One of
Speaker 1: these days we will have a standard way of doing
Speaker 1: this ridiculous. Yes. So previously on tech Stuff we talked
Speaker 1: about the history of Amazon dot Com leading up to
Speaker 1: and including the dot Com crash, which was in the
Speaker 1: year two thousand and so today we wanted to start
Speaker 1: up where we left off and bring you up to
Speaker 1: date on what Amazon has been up to. And it
Speaker 1: turns out it's a whole heck of a lot a
Speaker 1: bunch of stuff. But let's let's look back on two
Speaker 1: thousand one. Now, two thousand's when the actual dot com
Speaker 1: crash was. But the crash wasn't. Don't think of it
Speaker 1: like a crash where suddenly all companies lost value. It
Speaker 1: was actually more gradual than that. Companies like Amazon saw
Speaker 1: their stock prices hit a steady decline, and that decline
Speaker 1: would hit its lowest point as far as I was
Speaker 1: able to determine any way, in UH in mid two
Speaker 1: thousand one, when it hit just below six dollars per share,
Speaker 1: And keep in mind that in in they were looking
Speaker 1: at three hundred dollars per share before stock split, and
Speaker 1: it even opened. At the end of the opening day,
Speaker 1: it was at three dollars right. Yeah, so yeah, opening
Speaker 1: day before the company had ever done really anything beyond
Speaker 1: you know, it had been it had been an operation
Speaker 1: for two years as a private company, had not turned
Speaker 1: a profit, raised fifty four million dollars at twenty three
Speaker 1: bucks a share two thousand one. It weathers the storm
Speaker 1: of the dot com crash if I can mix all
Speaker 1: sorts of metaphors, uh, and ends up at six dollars
Speaker 1: per share. So this is a tough time and some
Speaker 1: companies wouldn't have survived. In fact, a lot of companies
Speaker 1: did not survive this this tumultuous time, and it did
Speaker 1: not stop Amazon. In fact, they they did. They did
Speaker 1: cut costs, they like laid off employees, closed or distribution facility. Um. Yeah.
Speaker 1: They ended up seeking out and forming alliances with what
Speaker 1: would have traditionally been considered competitors on Target and also
Speaker 1: Borders Group. Yeah, that's a two big competitors right there.
Speaker 1: They also introduced the concept of the for Amazon anyway,
Speaker 1: for in store pick up where you would order an
Speaker 1: item on Amazon dot Com and then go and pick
Speaker 1: it up at what whichever store actually sold that thing.
Speaker 1: So they had other alliances, not just with Target and
Speaker 1: Borders they had they had previous alliances with companies like
Speaker 1: Toys r Us and also Circuit City, which you know
Speaker 1: had its own sad story, which I guess we could
Speaker 1: do someday and talk about. Maybe maybe instead of just
Speaker 1: Circuit City, we could talk about all box stores that
Speaker 1: have suffered, because now we're seeing the same sort of
Speaker 1: thing happened with Best Buy, which which survived the Circuit
Speaker 1: City debacle but is now struggling on its own. That's
Speaker 1: neither here nor there at this point. Target makes these
Speaker 1: alliances in part to kind of wide Amazon. I mean,
Speaker 1: I'm sure that it was. You know, Target was in
Speaker 1: it for the same reasons. Yes, Target, Target was, but
Speaker 1: Target as a as a as a traditional retail establishment
Speaker 1: was not affected as badly with the dot com crash
Speaker 1: as web based companies. So thank you for correcting me,
Speaker 1: because that was a definite correction that needed to happen.
Speaker 1: But but yeah, Target, for its part, they were having trouble.
Speaker 1: You know, one of the things that that made investors
Speaker 1: kind of wary about Amazon was that its competitors could
Speaker 1: in theory, create their own websites and start to sell
Speaker 1: things in these vast numbers that Amazon was enjoying hypothetically
Speaker 1: right directly to their consumers as opposed to partnering with Amazon.
Speaker 1: But it was take a while for that to work,
Speaker 1: partly because you had these traditional retail establishments that they
Speaker 1: the web space was foreign to them, that was not
Speaker 1: where their expertise lay, and so to get into that
Speaker 1: meant that they made a lot of mistakes. They had
Speaker 1: to work with a lot of companies they weren't familiar with,
Speaker 1: and it took it was it's a slow process. Whereas
Speaker 1: Amazon was coming from the opposite direction they were looking
Speaker 1: at they already had all these systems in place to
Speaker 1: to categorize and and organize data about objects exactly, and
Speaker 1: to handle all the customer information as well. So so yeah,
Speaker 1: it was one of those things where, uh, it made
Speaker 1: a made sense on both parties because Target could take
Speaker 1: advantage of Amazon's interface, Amazon could take advantage of the
Speaker 1: fact that Target had a lot of stuff that people
Speaker 1: wanted and and both companies to Yeah, so they both benefited.
Speaker 1: So yeah, by by the end of the year, they
Speaker 1: had made UM three point two billion in sales um,
Speaker 1: which you know, considering after right after the dot com crash,
Speaker 1: that is not bad. And they also reported their first
Speaker 1: net profit during the fourth fourth quarter of that year.
Speaker 1: And this is this is major, This is huge because
Speaker 1: I mean, you know, not only had they survived this
Speaker 1: terrible crash of two thousand, but also for the very
Speaker 1: first time in their entire history, actually turned to profit. Yeah.
Speaker 1: So this is this is kind of confusing in a
Speaker 1: way because you're talking about a year in which they
Speaker 1: see the lowest stock price for a for a share
Speaker 1: of Amazon stock. The same year they have their first
Speaker 1: net profit of one quarter. Again it's just one one quarter,
Speaker 1: but but yeah, their annual loss was at a hundred
Speaker 1: and forty nine million dollars for that year. So so
Speaker 1: they're still losing money, but they're losing a slower rate
Speaker 1: than they were before a trickle. Yeah, so you're talking
Speaker 1: about a billion dollar industry but no profit. So uh,
Speaker 1: but still Bezos is in it for the long haul.
Speaker 1: He's able to hold it together despite all of this.
Speaker 1: And they move on into two thousand two and uh
Speaker 1: and Amazon continues to diversify and try new things. They
Speaker 1: opened some new stores in apparel and accessories and office products,
Speaker 1: which go hand in hand. I know when I'm shopping
Speaker 1: for slacks, I also often need a stapler of course.
Speaker 1: You know. Also Staples make great air rings. No, no,
Speaker 1: don't do that. No listeners at home never never listened
Speaker 1: to me, right, So um. They also launched Amazon Canada. Yeah,
Speaker 1: so the Canadians finally got to shop. It is Canadians.
Speaker 1: I feel your pain as you sit there and think. Wait,
Speaker 1: in that last episode you talked about them launching in
Speaker 1: France and Japan and Germany in the UK. Yeah, they
Speaker 1: got out the Canada, especially since they were in Seattle.
Speaker 1: I mean you could technically like spitt and hit him
Speaker 1: from where you. I think what Canada would do is
Speaker 1: they would just hop across the border and order things
Speaker 1: and then hop back across. That's probably not true, Canadians.
Speaker 1: I know you're all too nice to yell at me.
Speaker 1: So um. Also, by the way, if you, if you
Speaker 1: really want to feel superior, Atlanta lost its hockey teams.
Speaker 1: So really, I'm just envious of Canada because I happen
Speaker 1: to love hockey and I no longer have a team
Speaker 1: to cheer for, and that's sad. Anyway, moving back to Amazon,
Speaker 1: they also created their well, they had already created a
Speaker 1: free Super Saver shipping program right back in back in
Speaker 1: two THO actually missed that point. Yeah, that was when
Speaker 1: if you ordered a hundred dollars or more you could
Speaker 1: you could qualify for free shipping. They had reduced that
Speaker 1: amount to twenty five dollars. Yeah, so this is an
Speaker 1: effort of them trying to continue to to increase sales. Obviously,
Speaker 1: they did not want for that momentum to slow down
Speaker 1: because the momentum, frankly, was really all that was keeping
Speaker 1: that company going at that point. Um. They also launched
Speaker 1: Amazon Web Services. This is a one of the things
Speaker 1: that really helped Amazon as well. Uh, this is a
Speaker 1: back end thing that a lot of you know, retail
Speaker 1: customers would never understand, but corporate customers, it's very important.
Speaker 1: Amazon Web Services here's a direct quote from the site.
Speaker 1: It offers a complete set of infrastructure and application services
Speaker 1: that enable you to run virtually everything in the cloud,
Speaker 1: from enterprise applications and big data projects to social games
Speaker 1: and mobile apps. So basically what it means is that
Speaker 1: Amazon took all of these amazing bits of technology and
Speaker 1: software and infrastructure that they were using to make their
Speaker 1: own business awesome, and they sold them piecemeal to anyone
Speaker 1: who was interested in using. This is almost like leasing
Speaker 1: really leash. Yeah, not not selling, but um but right yeah,
Speaker 1: so so leasing the space, leasing the databases, leasing the programming. Yeah,
Speaker 1: and this is this This is a part of a
Speaker 1: conversation that will probably have and yet another episode further
Speaker 1: down the line when we talk about Amazon and its
Speaker 1: impact in the industry. Because while we're talking about the
Speaker 1: history of the company right now and we're talking about
Speaker 1: some big idea is it's hard to stress what sort
Speaker 1: of impact this made. Keep in mind, this is cloud
Speaker 1: computing and cloud storage before people were even using that term,
Speaker 1: and Amazon. You know, we often think, at least I
Speaker 1: often think of Google as being huge with the cloud,
Speaker 1: the cloud storage and cloud services. But really when you
Speaker 1: look at it, it's Amazon that was a real pioneer
Speaker 1: in that space. When you're talking about big big names. Yeah,
Speaker 1: not not not for personal use yet they would get
Speaker 1: into that later, but for corporate use. We're talking like
Speaker 1: major companies using Amazon because again, just like I was
Speaker 1: talking about with the retail companies where the web space
Speaker 1: was unfamiliar territory. You had these other big companies that
Speaker 1: had the need to support at some sort of networked
Speaker 1: infrastructure or online capability. But it's such a huge investment
Speaker 1: to do that as a company. And to have that, like,
Speaker 1: you have to have the space to to store the servers,
Speaker 1: you have to have the people trained to maintain the servers.
Speaker 1: You have to have the right kind of space because
Speaker 1: if it gets too warm, the servers shutdown. Kind of
Speaker 1: funny thing about computers. So Amazon was essentially saying, hey,
Speaker 1: we know it's tough. We do this for a living,
Speaker 1: so why don't we do it for you? And uh
Speaker 1: and yeah, that ended up opening up a huge business opportunity.
Speaker 1: Um and also uh, they ended up moving on to
Speaker 1: uh to the next year. We're talking about their first
Speaker 1: profitable year in two thousand three. So uh, two thousand three,
Speaker 1: they have their first profitable year. They earn thirty five
Speaker 1: million dollars overall, thirty five Okay, so they're sales, by
Speaker 1: the way, so they make thirty five million. Here's how
Speaker 1: much they sold one point nine five billion dollars worth
Speaker 1: of stuff, so almost two billion dollars in sales, thirty
Speaker 1: five million profit, so not a not a not a
Speaker 1: not great margins. And it turns out, um, you know,
Speaker 1: it had a crazy holiday season that year. They processed
Speaker 1: one million shipments and had twenty million inventory updates in
Speaker 1: a single day. That's that's big. They also opened up
Speaker 1: more stores. I probably won't be talking too much about
Speaker 1: all the different stores they've got at this point. It's
Speaker 1: just more stuff. I will say. That's when gourmet food
Speaker 1: hit so yeah, important the stomach demands that I mentioned
Speaker 1: that Also, this was the year two interesting things as
Speaker 1: far as I'm concerned with with Bezos here. Um. One
Speaker 1: was that he decided to pursue his love of space
Speaker 1: exploration by funding a startup company called Blue Origin, which
Speaker 1: is a Seattle based aerospace company working on private space flight.
Speaker 1: He also had a near death experience that year. He
Speaker 1: was on a helicopter, right, Yeah, he was in a helicopter. Uh,
Speaker 1: and they were essentially scouting locations for Blue Origin. And
Speaker 1: uh they were that they were about to take off
Speaker 1: in this helicopter in a field I think it was.
Speaker 1: And um, while they were starting to take off, the
Speaker 1: helicopter drifted, the tail hit a tree, the helicopter began
Speaker 1: to tilt and then it ended up flipping upside down
Speaker 1: and landing in a creek. Bezos. Obviously he survived, but
Speaker 1: apparently he said that he was asked like, did your
Speaker 1: life flash before your eyes or did you suddenly have
Speaker 1: like things that you wish you had done? He says, Actually,
Speaker 1: what I thought was this would be a dumb way
Speaker 1: to die, which is pretty awesome. Um, yeah, so you
Speaker 1: know that's that was That was a pretty incredible experience.
Speaker 1: He also said in an interview. This is unconnected with
Speaker 1: the helicopter issue. They said an interview with Business Week.
Speaker 1: When we can improve our personalization algorithms so that we
Speaker 1: show something to somebody that they wouldn't have discovered in
Speaker 1: any other way, and then that serves them very well,
Speaker 1: that's something that's incredibly valuable. And that goes back to
Speaker 1: something I said earlier. I think it was actually in
Speaker 1: part one of Amazon, this idea of creating algorithms that
Speaker 1: can predict customer wants and needs and behavior so that
Speaker 1: you give you give the customer a really great shopping
Speaker 1: experience and also in the process you make more sales,
Speaker 1: so it benefits everyone. So when I go online and
Speaker 1: I think, I really really want to buy that copy
Speaker 1: of of of Halo four. Uh. It also says, hey,
Speaker 1: I see that you really like being bad at video games.
Speaker 1: Maybe you would also like to be bad at Assassin's
Speaker 1: Creed three. And I say, yes, I would, and I
Speaker 1: add that to the list, and that happened. Um, although
Speaker 1: I should, I should point out right now Assassin's Creed
Speaker 1: three is still in the shrink wrap. I have not
Speaker 1: finished playing Halo four or Border Lens too. As it
Speaker 1: turns out in February. First kids, both Jonathan and I
Speaker 1: are lame at video games, but we we have played
Speaker 1: online at the same time on the same team. We
Speaker 1: did we did, and uh, Matt from from Stuff they
Speaker 1: don't want you to know, John joined in as well. Yes,
Speaker 1: we actually had Team House Stuff Works for a while.
Speaker 1: We've had one person suggests that we have a tournament
Speaker 1: of Team House Stuff Works versus Team Twit over this
Speaker 1: week in tech. I don't know if anyone at twit
Speaker 1: plays Halo or any other Xbox three sixty game, but
Speaker 1: if they do, uh, it is on like Donkey Kong. Yes,
Speaker 1: call us guys any any time, I as let me know.
Speaker 1: You know, he's my he's my buddy over there, but
Speaker 1: at any rate, Yeah, So getting back over to Amazon,
Speaker 1: they also launched a service called A nine. Now. A
Speaker 1: nine had development efforts in five areas product search, cloud search,
Speaker 1: visual search, advertising technology, and community question answering, but when
Speaker 1: it originally launched, it didn't actually go live until two
Speaker 1: thousand four, but it was developed in two thousand three,
Speaker 1: so this kind of less you have something specific about
Speaker 1: two thousand segways into okay. Uh So. Originally the forward
Speaker 1: facing part of A nine was a search portal, So
Speaker 1: this is kind of competing with Google and Yahoo and
Speaker 1: other search engines, but it allowed you to use different
Speaker 1: filters or search groups like it had over four hundred
Speaker 1: different groups you could search from, and you could choose
Speaker 1: which groups to include or not include. So it was
Speaker 1: very versatile in that sense, although I guess if you're
Speaker 1: really getting bogged down into it, it it could probably take
Speaker 1: you ages to do a search. But it was discontinued
Speaker 1: that that part of A nine was discontinued in two
Speaker 1: thousand eight because it just wasn't getting a lot of traction.
Speaker 1: But a lot of the technology they developed in A
Speaker 1: nine still powers the search within Amazon itself. So when
Speaker 1: you go to Amazon, you do a product search. That's
Speaker 1: what's powering that search. It also is being used in
Speaker 1: other e commerce sites, so it's not just Amazon that
Speaker 1: uses that technology. Also in two thousand four, they launched
Speaker 1: Amazon Theater. Uh, they launched more stores. Um. The tsunami,
Speaker 1: the major tsunami that happened in two thousand four. Right, Yeah,
Speaker 1: they donated a fifteen point seven million dollars yep, and
Speaker 1: they they offered the ability for users to contribute directly
Speaker 1: to the American Red Cross. Uh Amazon payments, so yeah,
Speaker 1: you could. You could end up doing that. So that
Speaker 1: was a good, uh show of community and support. They
Speaker 1: also had that year bought jo dot Com, which became
Speaker 1: Amazon China. Right. Dot Com was a kind of a
Speaker 1: It became the largest book retailer in China at the time.
Speaker 1: It was a strong contender, but was not yet the
Speaker 1: number one, but did after Amazon bought them. Uh, they
Speaker 1: Amazon Theater. In case you're wondering, it was a short
Speaker 1: film series and they took uh the production company. They
Speaker 1: used the production company that was formed by the Scots
Speaker 1: that's a Ridley and Tony um and they produced five
Speaker 1: short films that started Hollywood Actors. These were short shorts
Speaker 1: that were released over several months, and they allowed users
Speaker 1: to watch the films and then buy items that they
Speaker 1: saw inside the film. So direct product placement. That's actually
Speaker 1: really interesting. It's one of those things you've been hearing
Speaker 1: about forever, right, Like one of the big promises of
Speaker 1: web tv was that eventually you would be able to
Speaker 1: watch a show and say, gosh, you know the Winchester
Speaker 1: brothers on Supernatural, sure to wear nifty clothing. I really
Speaker 1: want that shirt. I want to look I want to
Speaker 1: look like Dean Winchester. So how do I get that jacket?
Speaker 1: I've been watching so much of that show, Guys, I
Speaker 1: really have I can't. I cannot help you. There. I
Speaker 1: went through a Phineas and Ferb stage. It just happens, people.
Speaker 1: I mean, you just be thankful you didn't get to
Speaker 1: listen to my breaking bad phase. Um. But anyway, Yes,
Speaker 1: So that was kind of the idea. It was sort
Speaker 1: of a pilot program in a way. Uh didn't really
Speaker 1: go that far, but it's still interesting that they were
Speaker 1: starting to work with that sort of creative element. Yeah,
Speaker 1: and and that comes into play again. So Amazon is
Speaker 1: not finished with the creative element by any stretch of
Speaker 1: the imagination. But this was this was sort of an
Speaker 1: early like feeling the water kind of thing, and it
Speaker 1: was just a little chilly as all. Two thousand five,
Speaker 1: they introduced Amazon Prime, and I was so happy. I
Speaker 1: don't think I got involved in Prime until recently, like
Speaker 1: maybe actually I think that was closer to when I
Speaker 1: did too, but it's still it's uh yeah, yeah. So
Speaker 1: Amazon Prime, for those of you who do not know,
Speaker 1: it's a program that for a yearly fee, you have
Speaker 1: the option to get to day free shipping on lots
Speaker 1: and lots of products, not everything, because a lot of
Speaker 1: the stuff that's on Amazon is not actually offered directly
Speaker 1: through Amazon. It's offered through a partner. Now, the companies
Speaker 1: that partner with Amazon can choose to participate within the primeration,
Speaker 1: but it's not necessity. So if they do participate, you
Speaker 1: get two day free shipping on stuff, which is pretty cool.
Speaker 1: You would also later on get access to things like
Speaker 1: the Amazon Instant Video database for for certain Prime movies
Speaker 1: and TV shows, and also the capacity to loan out
Speaker 1: Kindle books. Yep. That's that's something else that comes to Prime.
Speaker 1: And we'll talk about more of those things when we
Speaker 1: get to them. But yeah, and then that holiday season
Speaker 1: they announced they sold one and eight million items. Yeah,
Speaker 1: that's a lot of a lot of stuff. Yeah. They
Speaker 1: also entered if a film agreement with drug Store dot
Speaker 1: Com that year. UH and UH, I had had another
Speaker 1: interesting note in here somewhere, but I can't read. That's
Speaker 1: too bad because the clock is ticking. I'm about to
Speaker 1: go into two thousand six. As of that year, they've
Speaker 1: possessed the world's three largest Linux databases with uh capacities
Speaker 1: of terabytes and tarabytes and tarabtes. Yeah. So again, you know,
Speaker 1: you would sit there and think of like data storage,
Speaker 1: you might think Google, but Amazon was the big name. UH.
Speaker 1: In two thousand and six, they launched Amazon Simple Storage
Speaker 1: Service or S three UH, and they this is another
Speaker 1: back end thing, but it's and it's something that eventually
Speaker 1: customers would see in another form that's kind of a
Speaker 1: split off of that. But they made a lot more
Speaker 1: partnerships with merchants, retailers, and manufacturers. UH. They also launched
Speaker 1: Amazon Connect, which was away for authors to reach readers
Speaker 1: through sort of a blog like interface, but that would
Speaker 1: eventually get replaced by what they call author pages. But
Speaker 1: the idea was that by giving authors a direct route
Speaker 1: to communicate with readers, it could enrich the experience because
Speaker 1: we didn't really talk about it. In fact, this is
Speaker 1: a very important point. But one of the other things
Speaker 1: that really helped Amazon get through the dot com crash
Speaker 1: is that they had, you know, user reviews, and user
Speaker 1: reviews created this rich user experience that made Amazon more
Speaker 1: of what what used to be called web two point oh.
Speaker 1: The concept that a community is important online right crazy
Speaker 1: that there has to the web two point oh has
Speaker 1: a lot of different definitions to it, but part of
Speaker 1: it is interactivity, uh, and the fact that users are contributors,
Speaker 1: not just consumers. And also that you have dynamic content,
Speaker 1: meaning that it does change over time. It's not just
Speaker 1: a landing page you go to and it has you know,
Speaker 1: a stock amount of information about the company. So and
Speaker 1: and this was really revolutionary because being able to jump
Speaker 1: on a website, look at a product that you're thinking
Speaker 1: about buying and see that someone says, you know, I
Speaker 1: really liked the shirt, but I got it and it
Speaker 1: seems ripped in a day and a half and and
Speaker 1: or or on the other hand, like this is a
Speaker 1: terrific thing. I've bought five of them. I've had it
Speaker 1: forever and it's wonderful, right, you know. I bought them
Speaker 1: for friends and family for for gifts and everyone loves them.
Speaker 1: That kind of thing and everything in between. And actually,
Speaker 1: you know, Bezos has said repeatedly that that negative reviews
Speaker 1: are just as important as positive ones because it shows
Speaker 1: that Amazon is dedicated to to the to the consumer side.
Speaker 1: I think he came under a little bit of fire
Speaker 1: at some point from some companies that were saying, why
Speaker 1: are you letting people post these negative reviews? And it
Speaker 1: was like, well, because they're true, because your stuff isn't good,
Speaker 1: make better stuff. Uh. You know, he points out that
Speaker 1: to build customer trust, you have to have that. It's
Speaker 1: also one of the reasons why Amazon is very very
Speaker 1: keen to uh to get rid of any reviews that
Speaker 1: are gaming the system, because that does happen. You have
Speaker 1: occasionally you'll have a company and it might not be
Speaker 1: the company directly. It might be say an outside PR
Speaker 1: firm that comes in and and without the company's permission,
Speaker 1: goes in and makes a whole bunch of fake reviews
Speaker 1: for for a product on something like Amazon. To drive
Speaker 1: up the rating to either to either positive reviews on
Speaker 1: their own products or negative reviews on a competitor's product. Right,
Speaker 1: So again, this isn't that something that necessarily a company
Speaker 1: is is, uh, you know, colluding with a PR firm.
Speaker 1: Some PR firms take it upon themselves, some companies do
Speaker 1: this kind of stuff on their own. But Amazon's approach
Speaker 1: is to try and head that off as much as possible. Uh.
Speaker 1: Also in two thousand and six, they launched the Amazon
Speaker 1: Unboxed which is interesting. This is kind of a predecessor
Speaker 1: to the instant video stuff Unboxed. What it would have
Speaker 1: let you do is download a DVD quality film or
Speaker 1: TV show and now you would download it to your
Speaker 1: PC and you could watch it on your PC. You
Speaker 1: could not watch it on anything else, and you could
Speaker 1: not It was not compatible with max, it was not
Speaker 1: compatible with Linux machines, only PCs running Windows, and you
Speaker 1: could not poured it over to our devices. Yeah, so
Speaker 1: you had to actually use the Amazon Unboxed video player
Speaker 1: to watch it. So it's a um, you know, proprietary
Speaker 1: video player. And you might think, well, that's kind of
Speaker 1: lame Amazon, Uh, this is kind of a In two
Speaker 1: thousand six well, it's also a restriction that the industry
Speaker 1: is putting on Amazon right because they don't want they
Speaker 1: definitely do not want you to be able to download
Speaker 1: video and either distribute it as much as you like
Speaker 1: or watch it on whatever you want. They want to
Speaker 1: control that as much as possible because because of licensing issues,
Speaker 1: because they make more money down the money. Yeah, so
Speaker 1: so it's not entirely Amazon's fault, although you know, people
Speaker 1: argue about how much responsibility they have the same thing
Speaker 1: is true in the publishing industry when we get there,
Speaker 1: of course. Yeah. And in two thousand six, just for perspective,
Speaker 1: Amazon accounted four or five point one percent of the
Speaker 1: online retail market. Uh, five point one percent out of
Speaker 1: all retail, all retail online. That's that's huge, which is yeah,
Speaker 1: I mean sounds like a really low number until you
Speaker 1: think about that. The internet was sort of a thing
Speaker 1: by two thousand six, and so that was definitely it
Speaker 1: was definitely big. Housetu works was going strong by two
Speaker 1: thou six, and uh, the next year's when Amazon really
Speaker 1: comes up with something huge. But before we get there,
Speaker 1: I think it's in weren't we take just a quick
Speaker 1: break to thank our sponsored and now back to the show.
Speaker 1: So it's two thousand seven. Amazon decides to rock the world,
Speaker 1: at least the world of publishing, and it releases the
Speaker 1: Kindle e reader. It launched at a three. Reviews were
Speaker 1: pretty mixed about it. Actually, people weren't sure that this
Speaker 1: entire electronic book thing was going to be a thing. Yeah,
Speaker 1: and there were a lot of people who were. I mean,
Speaker 1: I was skeptical when it launched because I thought, hey,
Speaker 1: I really like the feel and the smell of experience
Speaker 1: of a book, absolutely, and then I eventually got to hey,
Speaker 1: I like being able to carry a library without breaking
Speaker 1: my spine. Yeah. But yeah, early days, it was kind
Speaker 1: of a question about whether or not they can make
Speaker 1: it go. And and we should point out, I mean,
Speaker 1: we know this, so you guys who are furiously typing
Speaker 1: on your on your laptops, take a moment, or your
Speaker 1: smartphones or tablets, whatever, take a moment. We know that
Speaker 1: the Kindle was not the first e reader, wasn't even
Speaker 1: the first e ink e reader, but it was one
Speaker 1: that had an enormous company behind it, a company known
Speaker 1: for distributing books, so it also had a huge library
Speaker 1: of e books already available so so they had a
Speaker 1: distinct advantage over other companies that sold you the hardware
Speaker 1: but didn't have access to the actual content. This is
Speaker 1: selling you the hardware and the content all in one
Speaker 1: big company. So it also opened up huge opportunities for
Speaker 1: e publishing, where where authors could potentially publish a book
Speaker 1: themselves in electronic format and skip the entire publishing industry
Speaker 1: experience altogether. Now that doesn't necessarily mean that the book
Speaker 1: will be a success, but it does mean It does
Speaker 1: mean that a book that might not otherwise be published
Speaker 1: because it is too risky or too outside the norm.
Speaker 1: The rest of the Internet has given a huge voice
Speaker 1: to people who might not otherwise have have ever gotten
Speaker 1: a soapbox for good or for ill and commoners I'm
Speaker 1: looking at you. But but yeah, if they really started
Speaker 1: shaking things up, yeah, definitely, and um and it would
Speaker 1: continue to do so over the next few years. I
Speaker 1: mean we well, we'll probably do another episode about again
Speaker 1: about Amazon's effects. Yeah, because there's there's a whole lot
Speaker 1: to be said about the impact of electronic publishing on
Speaker 1: the publishing industry as a whole, especially when you get
Speaker 1: into the battles about pricing those those got ugly and
Speaker 1: they're still They're still going on. It's not like it's over,
Speaker 1: but it's for a while there it was. It was
Speaker 1: hurting everybody, especially authors and fans of certain authors, my
Speaker 1: wife being one of them. It's a whole Jim Butcher story.
Speaker 1: I'll have to tell when we get to that. But uh.
Speaker 1: They also that year two thousand seven, launched a partnership
Speaker 1: with TiVo, and TiVo of course the DVR for those
Speaker 1: who are who forgot, because Tvo TiVo was like the
Speaker 1: name and DVRs for the longest time. It's kind of
Speaker 1: lost a lot of it's ster mainly because there's so
Speaker 1: many other devices out there that incorporate DVR technology that
Speaker 1: TiVo is kind of. And there's also a lot of
Speaker 1: people are getting them straight from their cable provider these days,
Speaker 1: and so they don't necessarily have a separate branded Yeah,
Speaker 1: and and and to be fair, also, ti Vo has
Speaker 1: a reputation for not updating its operating system as frequently
Speaker 1: as people would like. Uh so, um uh all of
Speaker 1: those things. But back in two thousand seven, Tevo was
Speaker 1: the name. Uh it made entered a partnership with Amazon,
Speaker 1: and Amazon essentially allowed people who subscribed to ti vo
Speaker 1: access to the unboxed videos. So it meant that that,
Speaker 1: you know, if you were an unboxed customer, you could
Speaker 1: get access to thousands of movies and television shows. Um,
Speaker 1: the first quarters sales in two thousand seven past three billion.
Speaker 1: That's billion with a B dollars. That's in the first quarter. Yeah,
Speaker 1: the entire year that year was fourteen point eight billion
Speaker 1: in revenue. That's a lot of money. So um oh
Speaker 1: and oh this is huge, it's huge. Two huge things.
Speaker 1: First of all, September two seven, they launch a public
Speaker 1: beta program of their Amazon MP three program. So this
Speaker 1: is this is Amazon saying okay, Apple, see iTunes, Let's
Speaker 1: see what you're doing there. Let's let's go for it.
Speaker 1: And uh yeah. So then you had the MP three
Speaker 1: battles between Amazon and Apple, which are still going on today.
Speaker 1: Uh and uh yeah. I can tell you that I
Speaker 1: do a lot of comparison shopping. But then they also
Speaker 1: they they purchased the publication rights for a special edition
Speaker 1: version of a particular author's special book. That book is
Speaker 1: The Tales of Beatle the Bard. That author is j. K. Rowling.
Speaker 1: YEA heard her? Yeah, she wrote those Harry Potter books,
Speaker 1: you know, the ones where Frodo has to destroy the Ring. Um. Yeah,
Speaker 1: so you shall not pass thoks I love in the movie.
Speaker 1: Patrick Stewart is still good. He is so good. Yeah,
Speaker 1: as as professor x of of of Dumbledore University. Uh no,
Speaker 1: we actually do know our stuff. We're big Harry Potter fans.
Speaker 1: We're just we're just also enormous dorks. Um. But yeah,
Speaker 1: so J. K. Rowling's Tales of the Beatle of Beatle
Speaker 1: the Bard, which was a special special book that she
Speaker 1: had written that was, you know, connected to the Harry
Speaker 1: Potter universe, but not actually part of their not part
Speaker 1: of the actual story that shows up in the story. Yes,
Speaker 1: kind of meta, Yeah, a little meta. Uh that Now,
Speaker 1: that would not actually go on sale until two thousand eight.
Speaker 1: Amazon purchased the rights in two thousand seven, but two
Speaker 1: thousand eight they get the rights to actually sell the
Speaker 1: collector's edition version of of the Tales of Beatle the Bard.
Speaker 1: And that was the most important thing that happened in
Speaker 1: two They also hit like a four point one billion
Speaker 1: dollars in sales in their first quarter. They also acquired
Speaker 1: a company called Audible. So we've talked about audible on
Speaker 1: this podcast before they acquired a company called fabric dot
Speaker 1: com customers out there, they if you were following along
Speaker 1: with our web services. A conversation earlier, they they reached
Speaker 1: three hundred thousand developers using their web services. They also
Speaker 1: launched apps on Facebook. So this this is again Amazon
Speaker 1: looking at what is out there, what's working, what what
Speaker 1: are people really getting into, and making sure that they
Speaker 1: have a presence there. They've done this with multiple platforms,
Speaker 1: Facebook being a very important one, but they've also done
Speaker 1: things with Xbox Live and other companies as well. So, uh,
Speaker 1: you know, it's it's one of those things that that
Speaker 1: marks a company that's really on the lookout for what
Speaker 1: is it that customers want, because if they're able to
Speaker 1: continue to meet that, then they're going to be a success. Um.
Speaker 1: Moving into two thousand nine, Uh, this was also an
Speaker 1: important part important time for Amazon because in two thousand
Speaker 1: nine we started to see a dramatic decline in demand
Speaker 1: for retail space. This is where retail companies are starting
Speaker 1: to have serious problems. Companies like Circuit City and best
Speaker 1: Buy and uh and even you know, companies like Kmart
Speaker 1: and uh, you know, you're looking at more and more
Speaker 1: people shifting their shopping experiences to online online right. Bezos
Speaker 1: has said that nothing is ever going to replace the
Speaker 1: experience of going out and shopping at a physical location,
Speaker 1: and that it may just be that that becomes more
Speaker 1: of an event thing. So there might be for just
Speaker 1: specific types of products and services that you would go
Speaker 1: out to a brick and border store. That's actually absolutely
Speaker 1: true for me. I mean, you know, if I'm looking
Speaker 1: for something local or artistic, then I want to go
Speaker 1: out and kind of look at it and poke at it.
Speaker 1: But if I'm just buying a DVD, I don't want
Speaker 1: to go to Best Buy. Yeah, I'm sort of the
Speaker 1: same way in that. Like the other day, for example, Uh,
Speaker 1: at my house, I have no fewer than four different
Speaker 1: types of lightbulbs because of fixtures in my house. Uh,
Speaker 1: eventually I to have only need for one type of
Speaker 1: light bulb, but right now that's not the case. So
Speaker 1: I whole other episode, I had reached a point where
Speaker 1: I had enough burnt out bulbs that something needed to
Speaker 1: change or else I was going to really injure myself
Speaker 1: while navigating through my house at night. So I went
Speaker 1: on to you know, I could have gone to the
Speaker 1: store and gone down the light bulb aisle. This would
Speaker 1: have had to have been a hardware store because these
Speaker 1: are Halligen halogen bulbs. Yeah. Because I had to buy
Speaker 1: one of those fancy modern houses, um, which I love.
Speaker 1: The house is the fixtures that are driving me crazy.
Speaker 1: So I went on Amazon way easier with a couple
Speaker 1: of clicks, I bought a whole bunch of light bulbs
Speaker 1: so I won't have to go shopping again for a
Speaker 1: long time. It will be bright at my house for
Speaker 1: ages to come. Ever. But in two thousand nine, also
Speaker 1: the kindle was the top selling item of the holiday season. Yep.
Speaker 1: And this is also when a trend called show rooming began.
Speaker 1: Showrooming is when customers go into a store and they
Speaker 1: have a smart phone and they used the smartphone to
Speaker 1: take a picture of the stores product. Yeah, yeah, that
Speaker 1: was There were a few there were a few uh
Speaker 1: controversies that year. That was also the year that they
Speaker 1: that Amazon ended up deleting George Orwell from a whole
Speaker 1: bunch of kindles because they realized that the that the
Speaker 1: copy that they had in their store was actually in
Speaker 1: a legal copy that was only only approved for sale
Speaker 1: in Australia, I believe, Yeah, and there was definitely the
Speaker 1: problem was that they could sell Georgia or orwell four
Speaker 1: but the version they sold this is kind of weird
Speaker 1: because it's the same words. But then this is this
Speaker 1: is a publishing industry thing. I mean, and you know,
Speaker 1: every publishing company is very proprietary about these sort of things,
Speaker 1: and with good reason, because that's how they make their dollars.
Speaker 1: But but yeah, when you consider the content of nineteen
Speaker 1: eighty four and the fact that that was the book
Speaker 1: that gets I liked that a whole lot, and it
Speaker 1: was it was something that happened that you know this
Speaker 1: this actually required a response from Amazon to customers because uh,
Speaker 1: it happened so suddenly and without warning. Really, people just
Speaker 1: wake up one day and one of their titles is deleted.
Speaker 1: It raised the question of hey, don't don't I own
Speaker 1: it because I bought I bought a copy. Yeah, and
Speaker 1: the thing is that you you you technically do not
Speaker 1: own that book. That you own that that that you
Speaker 1: have on your kindle. You own the rights to read
Speaker 1: it right now. It's more like renting a book honestly,
Speaker 1: the way that it's worded. Yeah, And and when you
Speaker 1: think about it, that's that's worrisome because you think, well,
Speaker 1: could that rental agreement end some day and suddenly I
Speaker 1: don't have that book anymore. I mean in the series, yes,
Speaker 1: So you know, that's one of the big differences between
Speaker 1: an electronic book and a real book, because it would
Speaker 1: be a much different story if Amazon employees kicked open
Speaker 1: your door and walked to your bookshelf and took a
Speaker 1: physical copy of George Orwell's and said, sea, here's a
Speaker 1: receipt for your receipt and walked out. That was That
Speaker 1: was a reference to the documentary Brazil. Um. Anyway, moving on,
Speaker 1: so yeah, show rooming the whole idea about comparison shopping.
Speaker 1: While you're actually in a physical space, you end up
Speaker 1: taking the picture of the the you know, the code
Speaker 1: on the box or whatever, and get a quick look
Speaker 1: to see, okay, well, here's this one product in this store.
Speaker 1: What is it on Amazon? And do I want to
Speaker 1: just order it online? Uh? That that has driven stores nuts,
Speaker 1: and in fact, some stores, for example, I'm pretty sure
Speaker 1: Target for has a policy where it will match Amazon's
Speaker 1: price for products. So it's it's become kind of a
Speaker 1: battle between Amazon and traditional retail stores. Moving into two
Speaker 1: thousand nine, uh, they announced the fourth quarter sales for
Speaker 1: two thousand eight. This happens in early two thousand nine obviously,
Speaker 1: or like each year, at the beginning of the year. UH.
Speaker 1: Once you get into the year, the companies announced the
Speaker 1: results of their last quarter because obviously they can't do
Speaker 1: it during the actual year that happened, because it has happened.
Speaker 1: But the fourth quarter sales for two thousand eight were
Speaker 1: announced at the beginning of two thousand nine, and they
Speaker 1: were six point seven billion dollars, so still making huge sales.
Speaker 1: And of course part of this is because Amazon selling
Speaker 1: more and more stuff, just different kinds of stuff, not
Speaker 1: just books and music and movies. Um. They also introduced
Speaker 1: the Kindle too, which and they introduced shopping apps for
Speaker 1: Android and the Kindle app for iOS devices. And they
Speaker 1: acquired a company called Zappos, which made a lot of
Speaker 1: my friends unhappy because they loved Zappos and they loved
Speaker 1: its independent spirit, and they were worried that that would
Speaker 1: go away once it was acquired by a giant like Amazon,
Speaker 1: or that it would just be incorporated into Amazon, and
Speaker 1: Zappos as a thing wouldn't always um. Also we something
Speaker 1: else that's interesting at this point. One of the reasons
Speaker 1: why the kindle was so important to Amazon is we
Speaker 1: were talking about profit margins earlier, about how expensive it
Speaker 1: is to run a business like Amazon. You're talking about huge,
Speaker 1: huge infrastructure, lots of warehouses, lots of employees, equipment, shipping,
Speaker 1: lots of lots of stuff. You have to worry about. Kindle.
Speaker 1: It's an electronic file, so you pay for the equipment
Speaker 1: that it's stored on and the infrastructure that supports that equipment.
Speaker 1: But you don't have to worry about shipping. You don't
Speaker 1: have to worry about all those other problems. It's it's
Speaker 1: much cheaper to get electronic uh uh book it is
Speaker 1: to get a physical book. And you know, for example,
Speaker 1: George R. Martin stands with the Dragon's ways approximately what
Speaker 1: I do. So you have to shift at somebody. Yeah.
Speaker 1: Often I confuse Lauren with the book I'm currently reading,
Speaker 1: and uh, I now realize that when I hear put
Speaker 1: me down, I've accidentally picked up Lauren's awkward. Yeah, it's
Speaker 1: HR has talked to me, so um, yeah, it's It's true.
Speaker 1: Also with other forms of digital files, obviously MP three's
Speaker 1: and uh, and instance, streaming movies that kind of thing.
Speaker 1: So Amazon's really helping it. You know, the company is
Speaker 1: doing well in part because people are buying more and
Speaker 1: more of the electronic versions of stuff as opposed to
Speaker 1: the physical thing, although they're still buying the physical thing too.
Speaker 1: That's that hasn't changed. Um In they announced their fourth
Speaker 1: quarter sales for for two thousand nine, which was nine
Speaker 1: point five billion dollars. The other thing to keep in
Speaker 1: mind is the fourth quarter tends to be Amazon's best quarter,
Speaker 1: of course, because Christmas happens, holiday holiday shopping, and it's
Speaker 1: always any retailer's biggest quarter. Yeah, and and keep in
Speaker 1: mind also Amazon, while it's making these amazing sales, sometimes
Speaker 1: those profit margins aren't so great simply because Amazon is
Speaker 1: also cutting prices, so they they're actually really big on
Speaker 1: cutting prices there. You know. It's it's one of the things,
Speaker 1: one of the reasons that a lot of other physical
Speaker 1: big box stores have been driven out of business in
Speaker 1: contribution via Amazon. Right. Yeah, so you've got that's something
Speaker 1: that some critics are upset about with Amazon because they
Speaker 1: feel one that you know, it's it's slowly making Amazon
Speaker 1: and monopoly in many in many industries. And two it
Speaker 1: is uh, it hurts shareholders in the sense that they
Speaker 1: Amazon could be making more money if they charged more
Speaker 1: for stuff. Right. Then the counter argument to that as well,
Speaker 1: if you charge more for stuff, fewer people buy it.
Speaker 1: So what's the right balance? Yea. And interestingly, they've also
Speaker 1: applied the same concept to their to their web services UM,
Speaker 1: which is a huge part of their business. That again
Speaker 1: is the infrastructure that they rent out to other companies
Speaker 1: for use, and and prices of those services were dropping
Speaker 1: pretty dramatically as they streamlined that around the sort of
Speaker 1: time period. UM. Also that year, the sale of e
Speaker 1: books surpassed hardcover sales in July. Yeah, yeah, which that
Speaker 1: that would become, you know, pretty much part for the
Speaker 1: course from that point out, they would sell more kindle
Speaker 1: copies of books than physical copies of books. Now, that's
Speaker 1: not necessarily true across all businesses, right, And that's not
Speaker 1: to say that there are now more digital copies of
Speaker 1: books being sold then hard copies everywhere. It's simply for
Speaker 1: Amazon and particularly y Yeah. So now granted Amazon's big books,
Speaker 1: so it's it's a big story. They also launched Amazon
Speaker 1: Studios in two and this is a This is Amazon's
Speaker 1: attempt to get into content creation. It's an idea where
Speaker 1: they partner with content creators, writers who are writing movie
Speaker 1: scripts or television scripts that normally would not get turned
Speaker 1: into actual movies or TV shows because Hollywood is insular
Speaker 1: and there's it's really hard to break into it, right.
Speaker 1: I mean, you hear like the amazing stories that happened
Speaker 1: where someone gets discovered, like a writer, a writer, something
Speaker 1: gets discovered in Hollywood. But for every one story you hear,
Speaker 1: there's a thousand heartbreak stories of people who have the
Speaker 1: best idea but no one will listen to it. Yeah,
Speaker 1: So this is kind of Amazon's approach to letting content
Speaker 1: creators get a chance at seeing their stuff come to life.
Speaker 1: So in order to be part of it, you have
Speaker 1: to actually create an account and submit stuff, and they
Speaker 1: have very specific um uh parameters that you have to
Speaker 1: fit within in order to be part of it. So
Speaker 1: it's not like you just sent in a script and
Speaker 1: you're you're good to go. It's there's more to it.
Speaker 1: It's a little bit more complicated than they're kindle self
Speaker 1: publishing model or not Kindle, but self publishing model. Right.
Speaker 1: And then Amazon also invested a hundred and seventy five
Speaker 1: million dollars in a company called Living Social. So this
Speaker 1: is Amazon's attempt to get in on a game that
Speaker 1: looked like it was threatening companies like Amazon. So companies
Speaker 1: like group Me and Living Social which have these special deals,
Speaker 1: usually their regional deals that apply to you if you
Speaker 1: happen to live within a certain area and you get
Speaker 1: a you know, merchants or service providers or whatever will
Speaker 1: enter into it an agreement where you get for reduced price,
Speaker 1: essentially a voucher for something. Um And and there was
Speaker 1: a there was a time where people were genuinely concerned
Speaker 1: that these companies would topple retail establishments or at least
Speaker 1: really hurt the bottom line. But it turned out that
Speaker 1: it's really hard to make money with that business model. So, um,
Speaker 1: this might be one of those sort of missteps where
Speaker 1: where Amazon makes was perhaps not yeah yeah, maybe it
Speaker 1: wasn't the best idea. They reached seventeen billion dollars in sales. Um,
Speaker 1: that's a lot of money. They also released the Kindle
Speaker 1: Fire tablet, which it was it was a strong competitor
Speaker 1: because it was seen as a tablet device that could
Speaker 1: compete with the iPad, not you know, spec for spec,
Speaker 1: but because it was just in color, it was a
Speaker 1: touch screen, and it was way cheaper. Yeah, way cheaper
Speaker 1: thing that I've had. I mean, I think at the
Speaker 1: time that I had was still it's like bucks or
Speaker 1: something like that, right, and then and the fire debut,
Speaker 1: I think at about two hundred I want to say
Speaker 1: that that is I may king that up, but I
Speaker 1: I feel like it was. It was. It was a
Speaker 1: couple It was a couple of hundred dollars less than
Speaker 1: the guy I Pad was, and it was seen as
Speaker 1: such a low cost cost alternative that a lot of
Speaker 1: people who wanted a tablet but didn't want to invest
Speaker 1: that much money in an iPad decided to give it
Speaker 1: a try. And also, I mean it was a smart
Speaker 1: idea for Amazon because again, the tablet essentially acts as
Speaker 1: a portal for all of Amazon's content. So everything Amazon
Speaker 1: sells works really well on the Amazon Kindle Fire. So uh,
Speaker 1: you know, really, when you think about it, the tablet,
Speaker 1: they were selling those essentially either at cost or even
Speaker 1: at a loss, in order to sell you more e
Speaker 1: books and more video and music down exactly. Yeah, They're like, well,
Speaker 1: we'll make it up in content, which you know again
Speaker 1: because it's digital content has a much lower cost of
Speaker 1: distribution than physical stuff. This way, this way, we are
Speaker 1: bringing about the digital revolution and we will make so
Speaker 1: much money. Yeah, yes, yes, and and for for perspective,
Speaker 1: Borders that was two thousand eleven was the year that
Speaker 1: Borders announced their complete liquidation, so total, said Trombone. That
Speaker 1: was also the year they introduced Prime Instant Videos, so
Speaker 1: you could stream certain videos if you were a Prime member.
Speaker 1: You could also rent or buy videos through Prime Instant
Speaker 1: Prime as well, so you could watch those for for
Speaker 1: a fee. But there were there are lots of them
Speaker 1: that were available free for Prime users to watch. So
Speaker 1: again Prime is a subscription service, so you had to
Speaker 1: pay into it first, but you could watch all these
Speaker 1: other things for free once you were a member. They
Speaker 1: also introduced Amazon Cloud Drive and and cloud players, so
Speaker 1: this was the customer facing. This is when when you
Speaker 1: and I could end up taking advantage of Amazon storage
Speaker 1: space online. Uh. And also you could buy digital albums
Speaker 1: they would get stored in your cloud drive. You could
Speaker 1: upload stuff to the cloud drive, but there was a
Speaker 1: certain limit, a certain number of gigabytes of stuff you
Speaker 1: could upload butt in there. Yeah, you're good to go.
Speaker 1: You could listen to it from from anywhere, any any
Speaker 1: device that could connect to it. But also if you
Speaker 1: bought it directly from Amazon, it did not count against
Speaker 1: your limit. So if you bought and if you but
Speaker 1: I think it was if you bought a full album
Speaker 1: from Amazon, you would get upgraded to the next level
Speaker 1: of the cloud service. So it gave you an incentive
Speaker 1: again to shop through Amazon. So it wasn't like, you know,
Speaker 1: they were just being altruistic. They had a good reason
Speaker 1: to do this. They also announced my Habit dot com,
Speaker 1: which those personalized shots. Yeah, I vaguely, I vaguely remember.
Speaker 1: I ocusually get emails from them that I look at
Speaker 1: and I think I am not nearly attractive enough to
Speaker 1: wear that clothing. They then began to uh. They launched
Speaker 1: Amazon Local, which again very regionalized kind of a service,
Speaker 1: and they also well, they had the Amazon Silk web
Speaker 1: browser which was part of Amazon Fire. UH. That was
Speaker 1: shown as being really fast, but some people had some
Speaker 1: issues with it. UH. And they introduced the Kindle Owners
Speaker 1: Lending Library, where you could borrow books on your Kindle
Speaker 1: and not have to buy them if you want to
Speaker 1: just read it, which was kind of cool. Again, that
Speaker 1: was one of those things that you had to be
Speaker 1: a prime that was a prime perk moving into that's
Speaker 1: when they released the Kindle fire HD. Uh. They acquired
Speaker 1: Kiva Systems Incorporated. Yeah, yeah, that's the that's the nonprofit. No, no,
Speaker 1: that's the other other word. Opposite of nonprofit. Kiva was
Speaker 1: Kiva was. I know where you're going, but it's a
Speaker 1: different company. I'm going to I'm going to put you
Speaker 1: out of your misery. Actually, Tiva is a company that
Speaker 1: makes robots like those. Yeah. They these are the ones
Speaker 1: that made the automated material Handling system. Oh okay, excellent. Yeah.
Speaker 1: So yeah, when you when an order comes in, the
Speaker 1: robot goes and picks up the appropriate shelf. That like,
Speaker 1: they picks up the entire shelf. The shelves are designed
Speaker 1: so that they are the same dimensions. Yeah, they're the
Speaker 1: same dimensions as the robot. So the robot, because everything
Speaker 1: belongs on its own shelf, and every shelf belongs in
Speaker 1: a specific spot within the warehouse, the robot goes to
Speaker 1: the right spot. I'm gonna keep saying it that way. No,
Speaker 1: I'm gonna get lots of emails I'm gonna stop. So
Speaker 1: the robot goes to that spot and then uses a
Speaker 1: screw drive to lift the top of the robot. So
Speaker 1: from the perspective of the shelf, the top of the
Speaker 1: robot is not moving at all the but the the
Speaker 1: robot ends up using the screw driver to lift the
Speaker 1: top of the of it. This platform that goes from
Speaker 1: the robot up until it hits the bottom of the
Speaker 1: shelf lifts the shelf up, so now the robot is
Speaker 1: physically lifting the shelf off the floor, and then the
Speaker 1: robot wheels the entire shelf over to the packing area,
Speaker 1: where a human being grabs the product off the shelf
Speaker 1: and takes it to pack it up. Meanwhile, the robot
Speaker 1: return the shelf to the appropriate place in the warehouse.
Speaker 1: This is there are hundreds of robots in these warehouses,
Speaker 1: and they're all working independently and interdependently with each other
Speaker 1: so that they don't collide. They know the system knows
Speaker 1: where every robot is, and every robot knows where every
Speaker 1: robot is, so they move in this incredibly efficient manner
Speaker 1: and make it way easier for fewer people to pack
Speaker 1: more stuff in a warehouse and fulfill those Amazon dot
Speaker 1: Com orders. So it's kind of, um, it's kind of
Speaker 1: awesome to see. And then at the same time you
Speaker 1: think robots are going to take all our jobs. Well,
Speaker 1: at the same time, I mean, I've read there's been
Speaker 1: a couple of really good essays that have been published.
Speaker 1: I think the one it was called I was a
Speaker 1: Warehouse wage Slave. It was excellent published on mother Jones
Speaker 1: and uh, and yeah, just just detail this one journalists,
Speaker 1: uh inside experience of working for that kind of giant
Speaker 1: amalgamated shipping website thing, and and you know, the sort
Speaker 1: of the sort of man tory over time, twelve hour days,
Speaker 1: five days a week, fifteen minute breaks. You have to
Speaker 1: imagine that during the holidays, it's going to be particularly hillish.
Speaker 1: It's not good. Yeah, and you know, getting fired for
Speaker 1: things like taking a day off, Yeah, that's tough. Robots,
Speaker 1: as it turned out, do not need very many coffee breaks,
Speaker 1: and they rarely take days off unless they're no longer running.
Speaker 1: They complain less about having to run fifteen miles a
Speaker 1: day across a warehouse floor, but they will eventually override
Speaker 1: us and enslave us. Um they that year last last
Speaker 1: last year, last year, recording this podcast. Um. They also
Speaker 1: had Amazon Studios announced that it was going to develop
Speaker 1: series exclusively for Amazon Instant Video, which kind of puts
Speaker 1: it on par with Netflix, which is also developing content
Speaker 1: exclusively for Netflix. So with Netflix, you've got like the
Speaker 1: big title has me excited? Is arrested development, arrested developments
Speaker 1: coming back new season on Netflix. Well, Amazon is looking
Speaker 1: into creating the content that it was soliciting with Amazon
Speaker 1: Studios into these various series and movies, offering them on
Speaker 1: Amazon Instant Video. And the idea is that this will
Speaker 1: give you the option to see stuff that you otherwise
Speaker 1: never would get a chance, and hopefully some of it
Speaker 1: will be amazing. I'm sure. I'm sure quite a few
Speaker 1: titles will end up being really interesting and exciting to watch.
Speaker 1: And I say that knowing that the majority of the
Speaker 1: stuff I come across on Netflix is not. And what's
Speaker 1: interesting about this competition actually is that Netflix uses Amazon's
Speaker 1: web services to run I think that they're one of
Speaker 1: their larger, larger clients. Yeah, yeah, so, I mean, you know,
Speaker 1: it's it's an interesting experience to see the competitor using
Speaker 1: your own service. Um, and then moving up to to
Speaker 1: our current year. Uh. The only note I wrote down
Speaker 1: is that the current stock price as of the recording
Speaker 1: of this podcasts and just before we came in here
Speaker 1: was around two sixty four dollars a share. So if
Speaker 1: you remember when we started this podcast, it was down
Speaker 1: to just under six dollars per share. It's back up
Speaker 1: to two four dollars per share. It has not split
Speaker 1: since the dot com crash, but there was a there
Speaker 1: was a long time where the stock price was in
Speaker 1: the the ten to twenty dollar per share range, and
Speaker 1: then over the last few years, especially as the publishing
Speaker 1: stuff started taking off, the value of the company has
Speaker 1: gone up quite a bit. So it's it's it's an
Speaker 1: interesting story. I mean, they were way on top before
Speaker 1: the dot com crash. They went, you know, as far
Speaker 1: as the market value of the company went. They they
Speaker 1: sunk pretty low and then they rose back up. And uh,
Speaker 1: you know, it's interestingly a lot of during the fourth
Speaker 1: quarter of pcent of the units sold on Amazon were
Speaker 1: by third party sellers, so they're kind of starting to
Speaker 1: move away from selling things themselves become like a like
Speaker 1: a most you know, a middleman, yeah, a platform for
Speaker 1: selling things, which makes sense. Amazon has a huge reach.
Speaker 1: So it makes sense from a merchant standpoint, because you're
Speaker 1: going to reach way more potential customers than you would
Speaker 1: with your own site, because you know that requires people
Speaker 1: actually know about you before they start shopping. This way
Speaker 1: they can find out about your stuff on Amazon and
Speaker 1: fewer and fewer people. Uh, this is anecdotal. I shouldn't
Speaker 1: say this is not scientific. Anecdotally, I know that from
Speaker 1: my group of friends, a few people are really they
Speaker 1: don't really care where the product they buy comes from
Speaker 1: when they buy it on Amazon, and they're not looking
Speaker 1: at the name of the vendor. They're looking at, Oh,
Speaker 1: here's the thing, Here's how much it costs. Here's if
Speaker 1: it's a prime eligible thing. One click, give me that
Speaker 1: thing that I want. Um, I've got a little bit.
Speaker 1: Here's another kind of interesting fact. So during the time
Speaker 1: that Steve Jobs came back to Apple, you know he
Speaker 1: was were stout of the company, came back in the
Speaker 1: mid nineties, brought Apple back from the brink of bankruptcy
Speaker 1: to great success. UH investors achieved a return of sixty
Speaker 1: six point eight times their money that they invested. During
Speaker 1: Jeff Bezos's tenure at Amazon, shareholders achieved a return of
Speaker 1: one D twenty four point three times their money. Yeah,
Speaker 1: so nearly twice as much. Yeah, it's it's which is
Speaker 1: one of those reasons why a lot of like like
Speaker 1: Forbes has called Bezos the best performing CEO ever at
Speaker 1: least of this current era and that Uh, and that's
Speaker 1: the reason why is because of stuff like that and
Speaker 1: bezos his philosophy. It's very interesting if you were to
Speaker 1: ask Bezos about the competitors to Amazon. Uh, he he
Speaker 1: doesn't talk about them at all. He does not acknowledge them,
Speaker 1: like no matter which industry you're talking about. And his
Speaker 1: philosophy is this is quote from him, whatever your set
Speaker 1: of competitors competitors is today is transitory. You'd have to
Speaker 1: change your strategy all the time. So his his view
Speaker 1: is that you just gotta do what you do as
Speaker 1: well as you possibly can and don't pay any mind
Speaker 1: to the competitors because that's just a distraction. So yeah,
Speaker 1: it's it's an incredible story, it's and it's a pretty
Speaker 1: amazing company. H in that you know, you look at
Speaker 1: the the rise and fall and rise again. Um, it's
Speaker 1: I'm curious to see what goes on in the future, because,
Speaker 1: like you said, they could potentially get out of the
Speaker 1: whole why do we have this warehouse thing and just
Speaker 1: be be like a middleman, right right, Yeah, they're they're
Speaker 1: already doing that for so many corporations. But their infrastructure
Speaker 1: that it's their their web services are a multibillion dollar
Speaker 1: business at this point. Yeah, So, I mean that's where
Speaker 1: a lot of the value of the company is coming from.
Speaker 1: That in the digital products are really shaping the world
Speaker 1: as we know it. So we'll probably do an episode
Speaker 1: that kind of talks more in detail about Amazon's impact. Uh,
Speaker 1: maybe we'll We'll we'll split it up a little bit
Speaker 1: and give you some other episodes first, so that you're
Speaker 1: not amazon out all of what's or amazone as I
Speaker 1: like to say, Amazon as I just invented. You just
Speaker 1: did that thing, that was the thing that just happened. Okay,
Speaker 1: so let's wrap this up. Guys. If you have any
Speaker 1: suggestions for future episodes of tech Stuff, I highly recommend
Speaker 1: you let us know in an email. Our address is
Speaker 1: tech Stuff at Discovery dot com, or drop us a
Speaker 1: line on Facebook or Twitter or handle at both those
Speaker 1: locations is text Stuff hs W and Lauren and I
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