Amazon’s Cloud Loss: CEO Daily

Good morning.

Those of us in the journalism business are inclined to celebrate Jeff Bezos’ decision to buy the Washington Post in 2013. Since then, he has hired more journalists, built better technology, and revived a dying newspaper—albeit with a distinct editorial slant.

But if you are an Amazon shareholder, what should you make of it? As of Friday night, that is less clear. Amazon lost a whopping $10 billion contract—those don’t happen everyday—and there is at least reason to suspect Bezos’ ownership of the Post (which is independent of his ownership of Amazon) has something to do with it.

Let’s start with the facts. Microsoft and Amazon were finalists for the Defense Department’s massive $10 billion cloud computing contract. And most observers thought Amazon, the leader in cloud services, would have the edge. What happened?

In a book slated for publication this week, retired Navy commander Guy Snodgrass, who served as a speech writer to former Defense Secretary Jim Mattis, said Trump called Mattis and directed him to “screw Amazon” by preventing it from winning the Defense contract, according to an excerpt of the book. Mattis rejected the suggestion. “We’re not going to do that,” he said. “This will be done by the book, both legally and ethically.” But Mattis, of course, is now gone, as are many others who tried to circumscribe the President’s wishes.

Did Trump ultimately get his revenge for the Post’s tough coverage? Hard to know. Earlier last week, Amazon Vice President for Government Teresa Carlson spoke at the Fortune Most Powerful Women Summit and defended the government’s selection process. “The process was not rigged,” she said. But after the decision was announced Friday evening, an Amazon Web Services spokesperson said the company was “surprised about this conclusion.” AWS is reportedly considering whether to protest the decision.

More news below. And don’t miss Fortune’s Rey Mashayekhi’s piece on Mastercard’s plans to push into health care, fintech and supply chain management. It’s all part of trying to “broaden the scope of what we do, and who we do it with,” Craig Vosburg, the company’s president of North America, told Fortune. The strategy is focused around “the notion of Mastercard being [about] more than just cards.

Alan Murray
alan.murray@fortune.com
@alansmurray

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This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.

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