THE BASIS POINT

19 years ago this week: Bezos begins Amazon-sells-everything vision

Reading Brad Stone’s The Everything Store: Jefff Bezos and the Age of Amazon, which is a history of Amazon from founding through 2013. The company has evolved substantially since the book came out, but most of this evolution is rooted in the core vision.

Of the many notable highlights I’ve made, this one is the most notable so far. First of all, it captures Henry Blodget’s heyday as a sell side internet analyst who was later made the poster boy for investment banking conflicts of interest. The allegation was that internet analysts make extreme calls about high stock prices to drum up business for future IPOs. Eliot Spitzer was the NY attorney general coming after these conflicts of interest at the time, and played a key role in targeting Blodget and ultimately getting him barred from the securities industry.

Fast forward and Spitzer got taken down for his affinity for prostitutes, and Blodget founded Business Insider and sold it for $343m in September 2015.

But I digress. The excerpt below tells how Amazon’s Jeff Bezos was emboldened by Blodget—who was right all along—and took the opportunity to start becoming very public about the vision to go way beyond books and ultimately sell everything.

As technology continues to make customers expect a one-stop shop for key services in their lives—retail, entertainment, housing, etc.—it’s very important to understand why this statement is such a big deal. Amazon didn’t just come to own so many parts of the consumer’s life in the past few years. It just seems that way. But they’ve been working on this for two decades.

On December 15, 1998, Oppenheimer analyst Henry Blodget made what became one of the most infamous predictions of the decade, projecting that Amazon’s stock price—already riding the wave of dot-com hysteria into the $200s—would hit $400 per share over the next twelve months. The forecast became a self-fulfilling prophecy and signaled the onset of mass delusion. It sent Amazon stock $46 dollars higher that first day alone, and the stock hit the $400 mark just three weeks later (after two subsequent stock splits, it peaked at $107). Nudged along by the breathless reports and rhetoric emanating from Wall Street and the press, investors were beginning to lose their minds. Bezos claimed he was impervious to the hype, but as the dot-com frenzy intensified, he used the unique climate to hasten Amazon’s growth. If there was to be a great Internet landgrab, he reasoned, Amazon should rush to carve out the biggest parcel of territory.

“We don’t view ourselves as a bookstore or a music store,” he said that year [on March 18, 1999]. “We want to be the place for someone to find and discover anything they want to buy.”