Jeff Bezos drops CEO role with Amazon under attack
Amazon’s earnings last night included more than the usual facts, figures, and unlabeled growth charts. Founder and CEO Jeff Bezos, who famously sketched out the business plan for Amazon on a 1994 cross-country drive with his wife MacKenzie, is stepping down this summer. The most logical heir, Jeff Wilke, beat Bezos to the door, announcing his retirement last year. So the job goes to Andy Jassy, head of Amazon’s cloud services business. Bezos says he’ll stick around, Bill Gates-style, as executive chairman.
The news was greeted with all manner of retrospectives, lengthy lists of achievements, and eye-popping stock charts (Amazon’s shares have risen 225,233% since the company went public in 1997, making each of the now-divorced Bezoses among the world’s richest people).
In the Fortune archives, former writer Leena Rao profiled Jassy back in 2015 to explain how a marketing exec and Mets fan came to lead Amazon’s web services unit. And former Data Sheet scribe Adam Lashinsky published two masterworks on Bezos, calling him the “ultimate disrupter” in 2012 and following up with the evolution of the CEO four years later. One deeply reported classic that’s really stood the test of time is Chip Bayers’ profile, The Inner Jeff Bezos, from Wired in 1999.
“The three big ideas at Amazon are long-term thinking, customer obsession, and a willingness to invent,” Bezos told Lashinsky back in 2012, a fitting mantra for an executive who built the dominant e-commerce company of all time and also helped invent cloud computing. Check the tech history books and it’s hard to find a company that ignited two unrelated and huge new markets like that. Apple’s iPhone business is stunning but a logical evolution from personal computers. Google invented search but bought YouTube and was a late-comer to cloud computing. Microsoft’s server and app businesses were built from Windows and then led to the cloud.
Still, I had to laugh when I saw some pieces emphasizing that Bezos was going out on top. Sure, at $1.7 trillion, Amazon’s stock market value is close to the highest it has ever been. And the pandemic has accelerated the shifts to both shopping and computing online, mostly with Amazon.
But like Bill Gates, who stepped down amidst the antitrust attack on Microsoft, Bezos is leaving with his castle under siege. The House Judiciary Committee laid out the groundwork for an antitrust case last year and with Google and Facebook already sued, Amazon is likely next in the government’s sights. The European Union already has a case going. And while Amazon has nothing to do with our social media disinformation problem, it is at the center of efforts to unionize tech workers. Another bad look: Amazon is paying $62 million to its Flex drivers for improperly withholding tips.
Back in the tech history books, the transitions from founder and CEO to the next executive up include the duds like Gates to Steve Ballmer but also successes like Steve Jobs to Tim Cook, Bob Noyce to Andy Grove, and Bill Hewlett to John Young. Hopefully, we’ll be able to put “Bezos to Jassy” in the positive column in a few years.
That's a lot of clicks. Oh, yeah, Amazon's earnings. It was the company's best quarter ever, with sales up 44% to almost $126 billion and net income more than doubling to $7.2 billion. Both were better than analysts forecast, though with the Bezos news and Amazon's stock already up 68% over the past year, shares climbed just 2% in pre-market trading on Wednesday. At Google, revenue increased 23% to $57 billion, an all-time record and beating analysts forecasts. It also disclosed for the first time that its cloud unit loses money, $1.2 billion on $3.8 billion of sales in the fourth quarter, to be specific. Google shares, up 34% over the past year, rose 8% in pre-market trading. And Spotify's revenue rose 17% to $2.6 billion while its paid subscribers hit 155 million, up 24%. Podcast consumption doubled, a good sign for that strategic foray. Spotify's share price, up 144% over the past year, slumped 7% in pre-market trading.
Think automotive. Those Apple car rumors just keep coming. This time it's not Hyundai. Shares of Kia Motors jumped almost 15% on Tuesday after local reports that Apple is investing $3.6 billion in an electric car partnership. The iCar will be made in Kia's West Point, Georgia, factory and hit the road in 2024, South Korean pub DongA Ilbo reports via a Bloomberg re-report. Apple CEO Tim Cook may or may not have time to shoot down those rumors. The judge hearing Epic Games' lawsuit ordered Cook to sit for a seven-hour deposition in the case.
Making the description of the world a better place. Trying to end harassment, Wikipedia announced a new code of conduct for participating in its crowd-sourced online encyclopedia. Sexual harassment, making threats, and doxxing are among the prohibited behaviors. However, like any new Wikipedia entry, sections on enforcement and punishments are still under development.
Didn't even ask for forgiveness. It doesn't look like Elon Musk's SpaceX even got slapped on the wrist, but the startup's December 9 Starship rocket test that ended in a flaming malfunction occurred even though regulators had denied a required safety waiver.
Our Brainstorm Tech community remains active throughout the year. Next week on February 11, Lucinda Shen, my colleague who writes the Term Sheet newsletter, and I are hosting virtual panel discussions.
Lucinda's panel, on the topic of design and product development, features Walgreens Boots global CTO Mike Maresca, IDEO COO Iain Roberts, 3Pillar Global's chief delivery officer David Sawatzky, Home Depot chief information security officer Stephen Ward, and Haiyan Zhang, chief of staff for Microsoft's Xbox. It starts at 1 p.m. ET.
At 2p.m., I am discussing the new tech you need (and don't need) for 2021 with Emily Heath, chief trust and security officer at DocuSign, KPMG's senior partner and global head of management consulting Miriam Hernandez-Kakol, Zoox co-founder and CTO Jesse Levinson, Jennifer Lopez, vice president and head of the Innovation Lab at Capital One, and Dell's global CTO John Roese.
If you would like to join us, please apply here.
FOOD FOR THOUGHT
Apple is now requiring better disclosure of mobile apps' data collection practices. But Washington Post tech columnist Geoffrey Fowler investigated the accuracy of the so-called privacy nutrition labels. His top line finding: many were false.
Other industries that make products that could harm consumers don’t necessarily get to write the rules for themselves. The Food and Drug Administration sets the standards for nutrition labels. We can debate whether it’s good at enforcement, but at least when everyone has to work with the same labels, consumers can get smart about reading them — and companies face the penalty of law if they don’t tell the truth.
Apple’s privacy labels are not only an unsatisfying product. They should also send a message to lawmakers weighing whether the tech industry can be trusted to protect our privacy on its own.
IN CASE YOU MISSED IT
Microsoft is salivating over Google’s fight with Australia By Eamon Barrett
IBM’s new path to a six-figure salary doesn’t require a college degree By S. Mitra Kalita
Why Alibaba’s stock price fell despite better-than-expected quarterly results By Naomi Xu Elegant
Smart agriculture startup Bowery Farming hires a Google veteran as CTO By Aaron Pressman
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BEFORE YOU GO
The snow storm that roiled the East coast this week was a bit of a bust at the Data Sheet's suburban Boston bureau, leaving less than 6 inches of powdery white stuff. But giant pandas Mei Xiang and Tian Tian seem to love the snow as much as anyone. Check out the National Zoo's video of the pair enjoying a little back sledding. Keep your balance. The week is almost half over.