tv CNN Special Report CNN August 30, 2019 8:00pm-9:30pm PDT
i want to see every donkey find its happiness, its happy place, its peaceful place. >> to see more of these incredible animals and more of mark's work, go to cnnheroes.com right now. thanks for watching. our coverage continues. >> announcer: the following is a cnn special report. ♪ who are you? >> i'm jeff bezos. >> what is your claim to fame? >> i'm the founder of amazon.com. >> what began as an online bookstore -- >> a millenia from now, people are going to look back and say wow. >> -- has become a virtual empire. >> amazon really is arguably the most successful company in the history of business. >> wow, that's saying a lot. >> this is the beginning of
e-commerce. >> you guys didn't even know if this thing was going to work. >> we had a pretty good instinct. >> if you make the best service online, people will come. >> this is a company that wants to control the infrastructure. >> as computers continue to get cheaper, we will layer innovation on top of that. >> it's plausible that amazon will know you better than you know yourself. >> alexa -- >> it's in our homes. >> should people trust that it won't be used against them in some way that they don't authorize? >> absolutely. >> at our fingertips. >> amazon web services took over the web basically in a decade. >> does having that much power give you pause? >> that's a significant responsibility. we're aware of that. >> and now it fuels our economy. >> amazon is america's second trillion dollars company now. >> the company is now worth almost as much as the entire
economy of australia. >> is amazon too big? >> i don't think amazon's too big. >> amazon has got to pay! >> i think they have monopoly power. >> amazon has become an invasive species. >> so you think amazon should be broken up? >> oh, 100%. >> a journey. >> it's a business miracle. >> and a leader unlike any other. >> this is blue moon. >> i ask people at amazon to wake up every morning afraid. wake up terrified. be afraid of our customers. those are the people we have to pay attention to. >> tonight, a cnn special report. >> i can guarantee you one thing, it will be fun. >> "the age of amazon." >> how has the retail industry changed during this rise of amazon? >> well, you have this sort of
great white shark that's always, you know, kind of looming offshore. >> great white shark? >> well, this thing does and can eat everything. >> despite holding only a small fraction of global retail sales, today amazon takes claim for nearly 50 krencents of every do spent in e-commerce in the united states, an astounding market dominance. you've called what jeff bezos has built a miracle. >> absolute miracle. it's one of the great -- maybe the greatest before he gets all through with it. >> legendary investor warren buffett even called himself an idiot for not investing in amazon earlier. what is it about jeff bezos the man that has made him and amazon such a success? >> i wish i could give him a blood test or something. >> you want to clone him? >> in fact, no. i'd want a transfusion actually. >> warren buffett told me just a
few weeks ago the rise of amazon in his view is a miracle. is it a miracle? >> it's a business miracle. >> really? >> i mean you wouldn't have thought that almost a trillion dollar company would be formed in 25 years, that it would disrupt so many things and create so many different things. it's still a growing machine, so, yeah, it's a business miracle. >> miracle seems like it's an act of god, and amazon has been anything but. i think it's the application of business wisdom and technical expertise over a long period of time. >> brad stone has been studying amazon and writing about its growth since the late '90s. you're writing another book about amazon. what's the focus? where does this pick up? >> the everything store ended in about 2011, and there was so much story left to tell. the company is about four times larger than it was then. >> wow. >> so much has happened. >> in addition to selling millions of products, amazon
also manufacturers thousands of its own products for the amazon marketplace. everything from batteries to luggage to motor oil. >> but then increasingly, more than half of what's sold on amazon comes from a combination of little mom and pop sellers to bigger operations that are selling directly to amazon customers on their own, and amazon's just taking a cut. >> a seller, a manufacturer, a marketplace, and just the beginning of amazon's reach. >> they're making investments in health care. >> you're trying to fix that, make it better with james my dimon and with jeff bezos. what should america expect the three of you could do on health care? >> that we'll do our best. it's a 3.3 or $3.4 trillion industry. >> and finance. >> what would your over/under be on amazon becoming a bank one
day? >> i think it's -- i really don't know. even a category like online advertising, they're the third biggest platform for ads in the u.s. only after google and facebook. >> television. who's the second largest spender on original scripted television in the world right now? amazon. >> how big do you guys want to be? >> it has been reported that amazon spends $5 billion a year on original and licensed content. am i in the ballpark? >> i can't confirm or deny that. >> okay. >> alexa -- >> okay. >> the most innovative product of the last three years, i would argue, is amazon's echo device. >> alexa, turn on the shower. >> so it can warm up. >> whether they're bumping up against facebook or google,
whether they're bumping up against apple, anywhere they're bumping up against other big players, they're winning. >> they're also shipping. amazon has amassed its own logistics empire with an expanding fleet of trucks, planes, drones, robots, and of course warehouses. hundreds of warehouses. >> it makes same-day possible and makes next-day delivery possible. >> there are some who say that amazon killed traditional retail. how do you see it? >> what we're trying to do is invent for customers. we sort of look at things we could make better by innovation. zbl >> i would describe amazon in medical terms an opportunistic infection. now, were some of these companies who went out of business going out of business anyway? yeah. but amazon made the decline much
faster. >> in part by re-imagining the physical store experience with their own ameazon-branded retai stores. >> amazon is now the only firm in the world that can really perform consistently what i refer to as jedi mind tricks. when amazon announced the acquisition of whole foods, the value of kroger, its value declined a third. >> it's not just a matter of being big. it's also the structure of its power. >> stacie mitchell is co-director of the institute for local self-reliance, a nonprofit that studies economic concentration. >> a handful of big companies have taken over large swaths of our economy. >> we often try to understand amazon by talking about all the different businesses that it's in. a more accurate way to understand amazon is this is a company that wants to control the infrastructure, the rails that other companies need to use in order to get to market. >> the infrastructure --
>> infrastructure. >> infrastructure lets entrepreneurs do amazing things. >> in addition to the retail platform, the cloud is another area that is essentially infrastructure. >> speed is a really important part of the culture at amazon. >> we're trying to enable really any company or any government to be able to run their technology infrastructure on top of our technology infrastructure platform. >> though a lesser known part of amazon, aws, amazon's cloud business, has been instrumental to the company's bottom line. >> amazon web services took over the web basically in a decade. >> when investigative technology journalist kashmir hill noticed, she decided to try an experiment to live without amazon. >> i worked with this technologist who built a tool for me that just prevented any of my devices from talking to amazon servers. so that prevented me from using
the thing i used the most with amazon, which is the amazon web services. >> not surprising given that aws supports countless companies and government agencies and powers one-third of the world's cloud. >> netflix, conde nast, the cia -- all rely on amazon web services. >> it's just impossible to avoid. >> amazon's become an invasive species. >> an invasive species? >> 100%. >> ready for shipment. >> next, how bezos did it. >> hong kong, japan, australia. this is day one. this is the very beginning. and fall is here. it's time to get back to school, back to work, and back in the blind. because opening day is coming, and off-season day dreams are about to become a reality. it's your season.
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by 2012 -- >> jeff bezos. jeff! >> -- you would be hard pressed to find someone who hadn't heard of jeff bezos. >> jeff bezos, the god father of the virtual bookstore. >> but while researching his book, journalist brad stone found that person. >> i said, i'm writing a book about amazon and about this guy named jeff bezos, and i would like to talk to you for it. and he had no idea what i was talking about. >> that person was jeff bezos' biological father. >> i was like, well, he's your son, and he was perplexed. and i said when you were in high school back in albuquerque, you know, you had a son named jeff. and he said, is he still alive? >> wow. >> and i was like, yeah, he's one of the wealthiest guys in the world. >> jeff bezos was born in
albuquerque, new mexico, in 1964. his mother, jackie guice, was a junior in high school when she and her boyfriend ted jorgenson became parents. >> she doesn't talk about it that much, but my mom had me when she was 17 years old. you could ask her but i'm pretty sure that wasn't cool in 1964 to be a pregnant mom in high school. >> but by the time jeff turned 2, his mother and jorgenson, a circus performer and unicyclist had split up, and jackie was left to raise her son on her own. >> look at jeff. look at that hair and the glasses. >> one of bezos' closest friends from high school, joshua weinstein, remembers jackie as a loving and determined mother. >> jackie is the toughest, hardest working person i've ever met and the most loyal, and jeff gets that from jackie. >> jackie bezos was clearly the force in jeff's life. a fiercely protective mother who
got jeff into the best schools and got him the best opportunities, and she also recognized, i think, jeff's abilities early on. >> jackie and jeff wouldn't be a family of two for long. soon jackie would fall in love with a cuban immigrant named miguel bezos. they married when jeff was 4. >> my father adopted me when i was about 4 years old. i have the world's best dad. >> science whiz jeff bezos is an outstanding student emphasizing high standards. >> bezos' academic ambitions would lead him to the top of his high school class and then to princeton university. >> i went to princeton specifically to study physics, but a couple of years into it, i realized that i wasn't smart enough to be a physicist. and then i transferred to computer science and electrical engineering, which i loved, and never looked back.
>> after college, bezos landed on wall street at the quantitative hedge fund d.e. shaw, where he would meet his soon-to-be wife mckenzie. >> he called me up one day and said, i'm getting married. i said, great, to who? >> just six months after they began dating, bezos and mckenzie were pear married. and bezos began to rise through the ranks at d.e. shaw. >> it spans the globe like a superhighw superhighway. it is called internet. >> i started looking at the internet, and i found this incredible, startling fact. >> jeff bezos saw that web activity had jumped 230,000% in a short period of time. that was the ding, ding, ding in his head. >> yeah, i think he was able to see very early, you know, that the web was growing, that people were embracing it, and that it
would create a whole set of new business opportunities. >> jeff called me, and he said, mckenzie and i are quitting our jobs and we're moving to seattle, and we're starting a company. i said, great. what are you going to do? he said, we're going to sell books. >> i said nice. he said on the internet. i said, cool. what's the internet? >> in 1994, then 30-year-old jeff bezos ditched his lucrative wall street job, borrowed his father's car, and drove with his wife mckenzie to bellevue, washington, just outside seattle. and outside that garage, jeff bezos started his own company, an online bookstore. and by the end of the year, that company had a name -- amazon. >> i went to www.amazon.com and started searching for books and was immediately hooked. >> jennifer cast would become amazon's 25th employee. >> thank you for calling amazon.com. how can i help you?
>> by the time she was hired in 1996 to run marketing -- >> hello, amazon.com. >> -- amazon headquarters had moved from the bezos' garage to actual offices in downtown seattle. >> it was definitely startup feel. the first building, it was a dump. jeff thought that it was too fancy for us. from w there was no air-conditioning, stained carpets, but we loved it. >> this is a solid core door. >> the first thing you did when you started at amazon is you built your own desk. >> greg hart joined amazon in 1997, working in product management and mavlthing for books. today he manages amazon's foray into prime. >> was it truly frugal to save money? >> that's exactly how it started was frugality, but it's a good symbol of the mind set jeff wanted to create.
we had to be resourceful and creative. >> but in order to expand beyond books, bezos needed capital and a lot of it. >> amazon.com jumped $5.50 on its first day of trading. >> so in may of 1987, in the middle of the dot-com frenzy, amazon went public. >> what's really incredible about this is this is day one. this is the very beginning. this is the kitty hawk stage of electronic commerce. >> day one. it's always day one became the bezos mantra. in his first letter to shareholders, bezos sketched out the foundation of amazon. it's all about the long term. >> i'd liken it to babe ruth kind of calling his home run shot. it was audacious. >> bezos would stick to that long-term thinking even during amazon's toughest times. >> amazon stock has lost much of its luster. >> after the dot-com bubble burst, amazon's stock price
tumbled. >> investors ran for the exits. >> losing more than 90% of its value in the next two years. >> there were famous analysts who said amazon would run out of money. but it was also a hard time. they were losing a lot of executives. >> yeah. >> our first announcement is a complete video game store. >> facing intense pressure -- >> store number two. >> -- bezos pushed ahead right into new markets. >> tomorrow we launch these four new stores. >> people were amazingly customer-focused. they felt like they were inventing and breaking new ground. >> but with new inventory came new problems. how to store and ship all of it. so you are often referred to as the other jeff. >> that's my name. i think it's great. i grew up as a programmer. that's me. >> jeff wilkie has been with amazon for 20 years and rarely gives television interviews. he's now one of bezos' top executives.
>> we have essentially an assembly process. >> but back in 1999 when wilkie first joined amazon, he used his background in manufacturing to transform amazon delivery into what would become amazon prime. you guys didn't even know if this thing was going to work? >> prime? >> true? >> no, we didn't know for sure that customers would love it, but we had a pretty good instinct. >> both of you, both jeffs are big risk takers, is that right? >> i think so. i think prime at the time was a big risk. >> today it's estimated that more than half of u.s. households are prime members. what should that tell us about how important prime is to amazon's success? >> i think it's very important, but it's not the only thing that's important for success. >> they say about you that are you the most powerful man in the cloud. do you like that description? >> the man behind amazon's cloud
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a book that you're ready to share with the world? get published now, call for your free publisher kit today! jeff bezos, the richest man in the world, but they say about you that you are the most powerful man in the cloud. do you like that description? >> i don't think of it that way. >> in the heart of amazon's seattle campus, i met with andy jassy, one of jeff bezos' top leaders, the ceo of aws, the man who built amazon's cloud.
>> we're in the spheres, which is kind of an amazing place when you look around. there are 700 species and 40,000 different plants in here. it's a place that amazonians can come and do work. it's really nice to be able to get away from what you're doing every day and be inspired by what's around you. >> whose idea was this? >> i think it was jeff's idea. >> but amazon web services, that was jassy's idea, an idea so powerful it is now perhaps amazon's most valuable business. >> it generates an unusual amount of margin for amazon. >> the best margins for amazon period. >> yeah, and it's really almost single-handedly kind of changed enterprise computing. >> i think it is fair to say many people watching this have no idea what aws is. where did it come from? >> there were a few things going
on, i'll call it between 2000, 2003, that made us think this was an interesting idea. >> most notably, jassy realized that in order to continue expanding and experimenting at a pace their leader had come to expect, amazon's computing technology would have to move a lot faster. >> if you need a server to try an experiment, it typically takes you 10 to 18 weeks to get that server. with the cloud, you can spin up thousands of servers in minutes. so we figured if we needed it, it was probably likely that a lot of other companies needed it as well. >> in the same way that amazon transformed the speed of shipping physical products, aws has done the same for data. the cloud is not up there. it's, you know, in machines sitting on the ground all around the world, and they're just storing all this content and shipping it out to web users. >> what strikes me is that it worked, and then you essentially
had a seven-year lead on all your competitors. >> yeah. >> this is like the greatest piece of business luck in the history of business so far as i know. >> why did no one follow quickly? >> it's a really good question, and i don't know if we know the answer for sure. in the beginning, a lot of companies would pooh-pooh the cloud and say nobody was going to use it for anything interesting. and when the value proposition is that good for consumers, you can howl at the wind all you want, but you can't fight gravity. >> 13 years later, the cloud is now a $70 billion industry, and while formidable competitors have emerged, amazon continues to dominate with a seemingly endless list of customers from fortune 500 companies to tech startups to, yes, cnn, even secretive government agencies including the cia. the cloud is crucial to the economy. it's now crucial to national
security. do you think there should be more federal regulation of it? >> governments are going to make their own decisions on what they feel like they need to regular late and what they feel like they don't need to regulate. and we expect that governments will want to understand how we're operating as more and more workloads are being put on top of aws. >> for now, the federal government is busy deciding how much more of the nation's most sensitive data it wants to place in amazon's hands. aws is a final contender for the jedi contract, a $10 billion pentagon deal that would involve hosting government data for operations critical to military missions across the globe. >> we think it's integral for the department of defense to have access to the most sophisticated, cutting-edge technology that exists, period. >> does having that much power give you pause? >> we have over 3,000 government agencies using aws in a significant way. that's a significant
responsibility. we're aware of that. >> but most americans are not aware of the extent to which our government, our economy, and our homes now rely on amazon. >> alexa, popcorn. >> starting popcorn. >> although a vastly different kind of technology, alexa, like the cloud, has unleashed its own revolution. >> we launched with 13 skills. now we have over 80,000 skills. alexa can actually just do over a million things. >> toni reed has been with amazon for 21 years and headed alexa's introduction to the world. you have said that voice is the technology that, in your words, we didn't know we needed. why? >> it's so natural. this is our natural user interface. >> voice is going to quickly emerge as one of the primary ways that we interface with machines, and this is happening faster than a lot of analysts
even projected. >> alexa, tell me the news on cnn. >> what it means is that we are talking more than we're typing. and if it's the case, then we have a very close and personal relationship with these companies. >> but how close is too close, and who exactly is listening? >> alexa, stop. >> what does and doesn't alexa record? >> alexa only records after she hears the wake word. >> who at amazon hears what i tell alexa when i'm talking to her? >> a small group of annotators who do some ground truthing. they take very small subsets. it's dealing from customer data to help train the models that go back into improving speech technology. >> there are people on the other end. >> antonio pettit is one of them. during his seven-month contract
at amazon, pettit analyzed alexa commands gone wrong in order to improve the technology. he now works in artificial intelligence at microsoft. >> amazon is listening to what you tell alexa, not in any type of nefarious way to my knowledge. i believe that everything that they do is based on quality assurance. but people should know that. i think that that is something that is definitely not advertised. >> what do you say to those folks who think, oh, my gosh, someone's listening to me? >> i think it's important for customers to understand that we're not listening to them. it's a very, very small percentage that is -- is carved off for ensuring that the models are doing what the models say -- that they're supposed to do. >> but if you're one of the estimated 66 million americans who use a voice assistant speaker, you know that voice technology today is far from
perfect. many people have heard the story of the couple's conversation that got recorded without them triggering alexa with the key word and actually emailed to a contact of theirs. how does something like that happen? >> in that particular case, alexa did what it thought the customer was intending alexa to do. and in the end, we still got it wrong. there are defects for us, and we try to learn from those. >> is there a day that you foresee where you can 100% guarantee that won't happen again? >> there's no technology that works 100% of the time. we should strive towards that, which we are. >> i think the problem is the law. we have a very weak legal framework around privacy that doesn't give consumers a lot of rights. unless you're monitoring the traffic, monitoring your network, you can't really know
what's happening in the background. you have to trust what the company is telling you it's doing. >> should people trust that if parts of their conversation are listened to, that it won't be used against them in some way that they don't authorize? >> absolutely. >> next -- >> the most important thing that we've done over the last 20 years is earn trust with customers. >> but is that trust in amazon eroding? >> i think they have monopoly power. ica's most loved pizza. hot and fresh, and right to your door. dough made from scratch, every day. sauce from the original giammarco recipe. and authentic toppings like crispy, old world pepperoni™. that's italian quality pizza. and it makes the moment... primo. every day at marco's, get two medium, one-topping pizzas for just $6.99 each. hello to the italian way. hello primo.
thing that we've done over the last 20 years is earn trust with customers. we've worked hard to do that. [ applause ] >> today, americans trust amazon with just about everything. >> if you're a consumer, it's hard not to love amazon. >> according to a 2018 study, amazon is the second most trusted institution in the country, second only to the u.s. military. is there any sign that that trust is eroding? >> i think there's a general erosion in trust across all of big tech. >> companies like amazon that made billions in profits did not pay one nickel in federal income tax. >> how is it that amazon is paying less in taxes than you and your family? >> technically, it's more complicated. amazon does pay state taxes, and it has paid federal taxes in the past. but it's also taken advantage of billions in corporate tax
breaks. >> we pay all the taxes we're required to pay. we paid 2.6 billion in cash taxes in the last three years. if last year we paid no tax in the u.s., it was because the law required us to pay no tax. since 2011, we've invested $200 billion in the u.s. in infrastructure for fulfillment and delivery and data centers and solar farms and wind farms, that these are exactly the kind of investments that the tax code was intended to stimulate. but the result of it is that that ends up being a deduction that means we didn't pay any tax last year. >> but it's not just taxes that have critics questioning amazon's business practices. >> the antitrust laws are really focused on promoting competition. >> in 2017, yale law student lena kahn published amazon's antitrust paradox, a paper in the yale law journal that
reframed the national conversation on antitrust law in america. >> when you have a situation when a single company is effectively able to set the terms of the marketplace, that's a situation where i think we should worry about the market not being competitive. >> critics argue that amazon's platform has become so dominant, anyone looking to sell products online is practically forced to sell there. >> if you want to reach consumers online and you're not selling through amazon, you're giving up half the market right out of the gate. >> questions have also been raised about the data amazon collects from all of its marketplace sellers. >> we see amazon mines their data, watches what they're selling well, and then become a seller in that category itself. it's a very difficult environment in order to succeed in. >> but jeff wilke, the man in charge of the amazon marketplace, sees it much differently. >> we don't use any data about
specific items that's not available to the world by just looking at our website. >> which may be true, but amazon knows how to access and analyze its data better than anyone else. does amazon give priority to and prioritize its private label in search? >> we prioritize the things that customers want. >> in a recent hearing on capitol hill, an amazon attorney went a step further and categorically denied the claim. >> we do not use their individual data when we're making decisions to launch private brands. our incentive is to help the seller succeed because we rely on them. >> third-party vendors now make up more than half of amazon's online sellers, helping to fuel its marketplace dominance. >> worldwide retail is something like $30 trillion. we are about 1% of that. >> you're about 1% of worldwide retail, but you're about 50% of u.s. e-commerce. >> what's interesting to me is
no customer that i've talked to wakes up in the morning and says, what am i going to buy from e-commerce today and then says, what am i going to buy from the store today? they say, what do i need, or what do i want? >> what do you say to folks who say, well, i like amazon. it's super convenient, but it did kill mom and pop shops. >> actually, i don't think it killed mom and pop shops. there is plenty of evidence that there are mom and pop shops thriving online and offline too. >> but according to a study by the institute for local self-reliance, 90% of more than 850 small businesses surveyed say amazon has had a negative impact on their revenue. >> we've seen this sharp decline in the number of small businesses across a lot of different industries. we're now creating new businesses at about one-third the rate that we were in the 1980s. >> and washington has started to take notice. the justice department announced it is conducting a broad antitrust review of the online
marketplace while congress has also launched its own investigation of big tech. >> we welcome everyone to our first -- >> including amazon. >> i think they are behaving like a monopoly. i think they have monopoly power. >> the internet has become increasingly concentrated. >> congressman david cicilline is leading the top to bottom antitrust probe. >> congress doesn't have the ability to break up companies. i know that people have been suggesting that, but we can set the statutory framework and provide the resources and the regulatory guidance to make certain that competition exists in all of these spaces. >> regulators in europe have had their eyes on big tech for some time. >> amazon now has to repay the tax benefit. >> this past july, the eu's top antitrust official, commissioner marguerite vesier, formally launched an investigation of amazon's marketplace. so i asked jeff wilke, the ceo of consumer for amazon, flat out
does amazon give priority to its private label in search? and he said to me, we prioritize things that customers want. >> we don't take what you say for granted. we really want to see the evidence. a lot of people would want to sell what people want, not only amazon. so of course we would like to see how does this dual relationship work, that you're both a host and a competitor? and that's the key question here. >> so if you're jeff bezos, how freaked out would you be about european regulators right now? >> well, i think they are suitably freaked out. >> so you think that amazon should be broken up? >> oh, 100%. >> we have intense competition everywhere in the world, in every one of our businesses. so i -- the main question for me is why? >> is amazon too big? >> i don't think amazon's too big, and i think if you look at most of the business segments in which we operate, we are a relatively small percentage of the total market segment. >> what do you make of the calls
to break up amazon? >> i think that's a silly idea in concept. amazon is doing a lot of good things for a lot of people. that's not a problem. they have a lot of competitors. >> one of those potential competitors is jamie dimon, ceo of america's largest bank. >> jeff bezos tried to hire you. >> yeah. we first had lunch, and we just hit it off. and we've been friends ever since. >> are you more partners or competitors with amazon? >> we're partners. we do business together. you know, we do a bunch of stuff. >> since 2002, jpmorgan chase has partnered with amazon on a consumer credit card. yet dimon remains acutely aware of amazon's ability to disrupt new markets. you did create a team. i think it was 2017, to essentially think about amazon. >> it was all of them. >> all the internet giants? >> all of them. if we were them, if they were us, what would you do? how would you look at it? what could they do to compete? we want to partner.
>> competitor, partner, or both, dimon warns that the days of an unregulated tech industry may be numbered. what's coming? >> i'm not warning them like they're bad. i'm saying they better get ready for this. if they're not geared up for that, i think -- honestly they are gearing upfor it. they should be. >> for his part, jeff bezos seems confident in his company's ability to battle whatever storm may be coming. >> we are so inventive that whatever regulations are promulgated or however it works, that will not stop us from serving customers. >> have a good weekend.
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>> it's the home of amazon prime video, exactly. >> the worldwide vice president of prime video, amazon's video streaming service. ♪ i'm just a man who came up with that idea? to create the video? >> jeff said, what if we licensed a bunch of content and made it available at no additional charge to prime members? and everyone sort of looked at each other and looked at him and thought, okay, that's an interesting idea. people may come for the shopping but stay for the entertainment. >> is the goal to win oscars or sell more paper towels? >> delight customers. >> people who engage with prime video convert from free trials to paid membership at a higher rate, renew their memberships at a higher rate and shop more. >> did you know it was going to work? >> of course, not. ♪
>> this phone is gorgeous. i can't wait for you to get your hands on it. >> in jeff bezos' mind, any risk on behalf of the customer is a risk worth taking. >> when we've made mistakes, we made doozies like the fire phone and many things that didn't work out, we don't have enough time for me to list all of our failed experiments, but the big winners pay for thousands of failed experiments. >> back in 2009, hart who has been with amazon since 1997, got a behind-the-scenes take on how the amazon founder thinks, spending two years in a coveted role as bezos' shadow. what's the most important lesson jeff bezos taught you during that time? >> the incredibly high standards he has for what amazon is capable and what the people of amazon -- >> you think the bar is higher, it can be higher. >> exactly. >> the secret sauce of amazon, the number one thing that's made us successful by far is
obsessive compulsive focus on the customer as opposed to obsession over the competitor. >> when you look at amazon and jeff, they're always -- that is so paramount and, you know, transcends almost all other things so you learn from that. >> has he affected the way you run your bank? >> oh, sure. we had a bunch of products and services where you click on it, you have to wait a second. and we didn't really think about it very much until i was reading something about amazon. i said, my god, we're just -- we got to be much faster. >> we're too slow. >> we're too slow. >> that exacting culture has brought amazon extraordinary customer satisfaction, it has also brought on harsh criticism from some of its workers. >> the culture is competitive and cutthroat, i would say. >> mt. everest, 29,029 feet. >> antonio pettit worked on a seven-month contract for amazon's alexa team. >> not a lot of care seems to be
taken to ensure that, you know, people aren't just burning out working there. that's what i see not always taken into account is the cost of having this convenience is oftentimes built on the backs of the people who are working at amazon. >> talk a little bit about the culture. there was that 2015 "new york times" article about culture here at amazon. and employees saying that it can be cut-throat and can be relentless. when you read that, what did you think? >> i think it was quite skewed and i think if you have a company with several hundred thousand people like we do, if you want to write a certain perspective, find some people to support it, you can really write almost anything you want. >> but the "times" interviewed more than 100 current and former amazon employees including executives across departments. describing, quote, sometimes punishing aspects of their workplace. complaints have also come from workers at fulfillment centers. >> these jobs are hard.
you know, people are standing in the same spot for eight, ten, hours a day, maybe during peak season. there are complaints about limited breaks. there are complaints about just the quotas and the goals. >> just this past july, warehouse workers in minnesota launched a prime day strike during one of amazon's busiest days of the year. you're aware of some of the criticism that some amazon employees have brought against the company from poor working conditions to increased pressure at the time, get it done, get it done, get it done. what's your response to that? >> that doesn't in total describe the experience that i helped to build. one of the things that we did was bring the safety programs from the best manufacturers in the world into retail which hadn't been done before. the benefits that folks in the warehouses and fulfillment centers get arthe same benefits that my family has
access to. >> amazon also raised wages in 2018 for all u.s. workers to at least $15 an hour following pressure from lawmakers including congresswoman alexandria ocasio-cortez and senator bernie sanders who at the time praised amazon's decision. >> i want to give credit where credit is due. i want to congratulate mr. bezos for doing exactly the right thing. >> in bezos' words, we listened to our critics. critics have also called on amazon to increase diversity at its highest levels of leadership. would amazon arguably be even more successful if it had more women, more minorities, near the top? >> no doubt. women are the primary shoppers that it's a huge part of their business. so the fact that it hasn't been a male-driven organization probably does create some blind spots. >> if you look below jeff's
leadership level, there are very, very influential, important, women but do we want and need more? absolutely. and especially in the pockets where we know we can improve. >> improving and maintaining amazon's company culture has kept many employees like andy from ever leaving. >> i've been at the company for 22 years now and i would tell you the culture is the primary reason i remain here. it is a place where you're encouraged to think creatively, where there is no ceiling to what you can pursue, where we're willing to make big investments and make big bets and commit to them for long periods of time. >> a uniquely amazonian culture. made possible by bezos' relentless focus on the future. >> i get to invent, i get to live two to three years in the future. >> is there something about jeff
bezos that makes him markedly different than almost any other leader on the planet? >> you become a good outlier, end up being a great inventor, great thinker, great team builder and obviously very flexible. that's kind of rare. coming up, how amazon transformed seattle. >> i think you'll find a lot of people here will be very angry at amazon. ♪ ♪ applebee's handcrafted burgers now starting at $7.99 now that's eatin' good in the neighborhood. ♪ boom goes the dynamite, club yoko plays ] now starting at $7.99 ♪ feels like i'm taking flight. ♪ [sfx: poof] [sfx: squeaking eraser sound effect.] ♪ i am who i wanna be ♪ who i wanna be ♪ who i wanna be. ♪ i'm a strong individual ♪ feeling that power ♪ i'm so original,
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in downtown seattle, you can hardly turn a corner without seeing or hearing amazon's impact. >> amazon has taken over. >> i call it amazonville. >> in 2010, you know, i think we had 30% unemployment in the construction trades. i think people were saying, boy, wouldn't it be nice to have cranes? by 2013 people were saying what's up with all the cranes? >> for as many cranes as there are in seattle today, there are just as many perspectives. on what amazon's growth has meant for the city. >> amazon has impacted us in a positive way. >> it's a positive and a negative. >> jobs. opportunity. >> i think it's beautiful. >> does nothing to help the city at all. >> it's growing fast. >> just takes and takes and takes. >> i think you'll find a lot of people here will be very angry at amazon. >> mike mcginn was elected mayor of seattle in 2009. right as amazon's downtown
expansion was accelerating. >> we all knew there was going to be an expansion, but i think, we said, boy, they might go from 5,000 employees to 20,000. but they went to 45,000. >> after losing a re-election bid in 2013, mcginn ran for mayor again in 2017 and lost to a candidate who received money from a pac supported by amazon. isn't amazon largely responsible for much of the job growth during your term as mayor? >> actually, we saw job growth in many places and, again, that's a positive. we wanted that job growth. >> but a lot from amazon. >> sure. it's a lot from amazon. >> amazon's growth in seattle has been good for business, been good for the flower shop, the barbershop. there's a ripple effect that creates economic opportunity for others. >> opportunity, however, not shared by all. >> it's greatly impacted the cost of living with rent. especially. pushing people out, especially from neighborhoods like this.
>> from a business point of view, i realized the wheels of progress have to keep turning. on the other side, it does not make the people who are being pushed out feel very good about it. >> got a big imbalance in seattle between the number of jobs that we've created and welcomed here and the amount of housing that we built so when you have that imbalance, you're going to get an affordability crisis. we have one today in seattle. >> since 2010, the number of homeless in seattle has increased nearly 34%. to address the crisis, the city council proposed a head tax in 2017 that would tax seattle's biggest companies $275 per employee. but heavy resistance from amazon and the seattle business community led that same city council to reverse its decision. ultimately killing the funding measure. >> i would say that, you know, things like the head tax in seattle i think are super dangerous for cities to implement.
>> they fought it. >> they fought it hard. and they won. >> it is no surprise to me that amazon -- bullies its way. >> sawant is a city council member and one of the few elected socialists in the country. she was a leading voice in the movement to pass seattle's minimum wage increase in 2014. and most recently -- >> amazon and other big corporations -- >> -- a vocal proponent of the head tax. >> amazon has got to pay! amazon has got to pay! it's very clear to ordinary people in seattle that we need a tax on big business like amazon. big business, big tech, big developers, make all the profits and are making life unlivable for the rest of us in this city. >> do you think amazon's done enough to cushion the impact of its growth on home prices in seattle? >> well, first of all, our
objective was to take care of customers so if we've been successful at that, which means we've needed to higher more employees and build out our headquarters, that's a good thing. it's not like we built this headquarters under a shroud and ripped it off and said, you know, ta-da. this was built over years. so the community had the time with us to, you know, to plan for this growth. i believe that we'll -- the city of seattle working with us, we'll get this right. we want to be a great corporate citizen. >> in addition to mary's place, a permanent homeless shelter set to open inside one of amazon's new buildings, amazon announced $8 million more in donations to homeless charities. still, some say, for one of the richest companies in the world, it needs to do more. >> they are going to do what they want for their bottom line. if you want something that is socially beneficial, we are going to have to fight for it as ordinary people.
look at what happened in new york city. >> in the fall of 2017, amazon decided it wanted a new place to call home. a second north american headquarters. and in typical jeff bezos fashion, they weren't just going to pick a city like most companies. amazon would hold a year-long competition but the seemingly irresistible prize, amazon's hq2 and the potential for 50,000 new jobs. >> much like amazon, las vegas is truly unique. >> after a 14-month search and more than 200 bids from cities across the country -- >> new york and virginia were the big winners of the amazon hq2 hunger games. >> eye-popping incentives for amazon including a helipad at its planned new york location. >> amazon has got to go! >> but in queens, new york, the winners high wore off quickly. days after the announcement, vocal residents, union and community leaders, led protests over the $3 billion tax break
for their new neighbor. >> we're new yorkers. you can't walk all over us. >> because of the noise from lawmakers, amazon kind of decided to turn the car around. that it wasn't worth this fight. >> three months later, amazon abruptly canceled its plans for new york's hq2. >> we got a call this morning saying we're taking our ball and we're going home. i've never seen anything like it. >> think it's incredible. i mean, it shows that everyday americans still have the power to organize and fight for their communities. >> i think it's a big loss for new york city. >> i think if anything, amazon came away looking even more powerful. they were able to say no to new york city. >> plus, amazon wasn't exactly walking away empty handed. >> they now have access to some -- >> all this data. >> all this data. >> frisco is prime to have you. >> there are over 200 cities across the country that bid on the hq2, and they put together
these big packages of all of this information. things like where are future infrastructure investments going to go, what's the distribution of our population that has different kinds of education degrees? so now amazon has this information about all of these different cities and it's going to put that to really prodigious use in the coming years as it thinks about where to site a new warehouse or new office or retail store. no one else has that. coming up -- >> i wish them luck. it's going to be a beauty. >> amazon, jeff bezos, and the other washington. >> i think ownership of the post has risks for amazon as well as benefits. i have moderate to severe plaque psoriasis. now, there's skyrizi. 3 out of 4 people achieved... ...90% clearer skin at 4 months... ...after just 2 doses. skyrizi may increase your risk of infections... ...and lower your ability to fight them. before treatment your doctor should check you
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it was 2013 and one of the country's leading newspapers was in serious trouble. >> the 2008 financial crisis was devastating. we'd been through a lot of recessions, but we'd never seen anything like this. >> the "washington post" had been owned by the graham family since 1933 but now it was struggling to survive. >> i was trying to figure out how a newspaper that had been successful in print could be successful in the digital world. >> so don graham, chairman of the "post" at the time, talked to everyone he could in silicon valley. >> i talked to steve jobs. i talked to gates. i talked to mark zuckerberg. i talked to the founders of google. i talked to jeff. over and over again.
i remember that it was smart, sensible, and not full of himself. >> bezos came with the influential endorsement of warren buffet. >> warren at that time was on our board. warren said jeff bezos is the best ceo in the united states. >> really? yeah. >> graham made an offer and bezos took it. >> in a surprise move the "washington post" is being sold to the founder and ceo of amazon.com, jeff bezos. >> it the newspaper in the capital city of the most important country in the world. the "washington post" has an incredibly important role to play in this democracy. i know that when i'm 90, it's going to be one of the things i'm most proud of. >> but skeptics wondered if bezos had a different strategy at play. >> i think his intentions are good. republican billionaires buy football teams. democratic billionaires buy newspaper.
it's also a pretty different heat shield, if a liberal newspaper is not if favor of antitrust against bezos, it's just a fantastic way to put sheep's clothing around a wolf. >> and over the next five years, bezos invested even more in the nation's capital. purchasing the largest home in the city. choosing its suburbs for amazon's second headquarters. and spending more on lobbying than any other tech company so far this year. >> amazon is one of the single most influential companies in washington. >> do you think owning the "washington post" has given bezos more clout among the political class here in washington? >> no. as the owner of amazon, jeff could hardly have more clout if he wanted to exercise it. but i see no evidence that jeff is using the "washington post" to advance any political interest.
>> and current executives at the "post" have stated repeatedly that bezos is not involved in any editorial decisions. has it ever been a concern for you at all that the interest of amazon could have motivated the purchase of the "post"? >> i suppose that's possible but i think ownership of the "post" has risks for amazon as well as benefits. the risk is that when the "post" writes a negative article about a politician, about a government, it can make people unhappy. >> i think the "washington post" is a russian asset. it's put there for the benefit, the "washington post," of amazon. that's my opinion and i think it's a disgrace. >> president trump has made a habit of hurling unsubstantiated allegations at amazon and bezos on twitter. accusing him of lobbying through the "washington post." calling the paper "fake news" and claiming amazon is scamming the u.s. postal service.
what started the beef between president trump and jeff bezos? >> i think fundamentally this is about the "washington post," it's a very influential newspaper. it's a paper that covers trump very critically, and rightly so. as a result, trump lashes out. >> i have seen other presidents do the same thing. >> from now on, no reporter from the "washington post" is ever to be in the white house. is that clear? >> there was a man named richard m. nixon who was very direct and very personal in what he felt about the "washington post" so president trump is doing what an awful lot of politicians have done over the years. >> earlier this year trump also took aim at bezos' personal life after the "national enquirer" leaked revealing text messages between bezos and the woman he was saying one day after he'd announced his separation from his wife, mackenzie. president trump weighed in. >> i wish him luck. it's going to be a beauty.
>> bezos wrote in a medium post that he suspected politics might be in play in the "enquirer's" reporting. >> he wanted to say so. the "enquirer" aim to him and said we have all these photos and could share it unless you stop accusing us of political motivations to the magazine wanted to shut bezos up. >> but instead bezos released emails from the "enquirer" to his team and accused them of blackmail anders torsion. dc -- and extortion. >> i was shocked. i think a lot of people around him were shocked. this is not someone whose personal life had drawn a lot of attention. >> no. >> a situation that was extraordinary. >> in a statement, the tabloid told cnn, "the national enquirer" acted lawfully and stands by the accuracy of our reporting." >> to this day it's still a mystery about exactly what happened with the "enquirer." >> yet the scandal placed bezos in an entirely new light. >> i think he thought and probably believed pretty strongly that he was doing the
right thing. by confronting this -- this abusive media power. >> i think it was handled brilliantly. i think there's a reservoir of good will toward jeff bezos because he's been seen as a responsible steward of the "washington post." i think his personal reputation has probably never been stronger. >> the "medium" post that surprised everyone with very serious allegations of blackmail. i'm interested if that has affected amazon at all or changed at all how he leads amazon. >> it hasn't changed how he leads. jeff is as engaged as he's been for years. this ideas are just as clever. i watched him give messages to our teams, all-hands meetings, smaller group messages, the messages are spot-on. aligned with culture and leadership principles. he's the same jeff i worked alongside for 20 years and i hope he stays the same jeff.
coming up, the future of amazon. >> it's plausible that amazon will pretty soon know you better than your spouse does, better than your kids do, better than you know yourself. this is the kid i went to the junihe was a cutie! and if you go down, that's me, above him. you won best looking in your senior year of high school? somebody had to win it. my best high school moment was the day i walked across the stage. my dad...couldn't read real good, so, it was a milestone for me. ancestry has over 400,000 yearbooks from all across the country. so go back to school with your friends and family, and discover more of their stories. search and share for free at ancestry.com. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country.
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>> jeff bezos recently said that blue origin, his space venture, is the most important thing he's working on. why? >> because i think he thinks of it as a long-term solution for humanity's biggest problems. >> it's time to go back to the moon, this time to stay. >> bezos now spending a billion dollars a year of his own money exploring space. and while his rocket ships don't say "amazon" today, that may change sooner than we think. >> and liftoff. >> think we'll ever have amazon fulfillment centers on the moon? >> that's a very good question. >> amazon recently won a patent for a floating warehouse that could store drones 45,000 feet into space. one of many stranger than fiction ideas amazon has in the works.
>> they're deep in research now on recognizing not only who you are but what you are in that moment in time. >> according to "bloomberg," amazon is working on a wearable device that can read human emotions. >> voice profiles give you the ability to teach alexa your voice. >> using a baseline of your biometrics -- >> alexa, close the shades, please. >> you know, are you depressed? >> alexa, tell roomba to start cleaning. >> are you happy? are you manic? have you had a stroke and don't realize it yet? do you have early onset parkinson's? >> alexa, turn the tv on. >> this is all discoverable if there's a big enough database of your voice. >> alexa, tell my coffee machine to prepare -- >> health care is clearly in the next big business they want to offer. they acquired this company called pillpack which distributes drugs. >> it's your medication made easy. >> they're working on ways to turn alexa into a doctor in your home.
>> it's plausible that amazon or any of the other big tech companies will pretty soon know you better than your spouse does, better than your kids or parents do, better than you know yourself. or you're willing to admit. >> amazon knows our food intake. it knows our body mass index because of the clothes we're wearing. it knows if we're in a monogamous relationship. it knows how many kids we have. >> the question is, what is amazon doing with all that information? >> when you search for something, artificial intelligence is making the search result better than it used to be. when we show you the list of recommendations that are personalized for you, that result is improved by artificial intelligence. >> a.i. has also improved amazon's long-awaited drone delivery system. >> you have to be really good at this so customer can trust it completely. regulators can trust -- >> you have to make the drones even smarter. >> yes.
60% to 80% of the items we ship could be shipped by the drones we're working on. >> all of that convenience, experts say, could come at exponentially higher cost to our privacy. in the case, for example, of amazon, amazon has incredibly powerful image recognition technology. >> people really love this image recognition service. >> at the moment, we don't have any caselaw that answers the question, who owns your face? >> yet, amazon's facial recognition software is already being used by law enforcement across the country. drawing criticism from the aclu. >> let's think about what those powers could mean in the hands of the government. >> and amazon's own employees who say the powerful technology must be carefully regulated before it's put to broad use. >> you have been pretty open about the fact that this is a service that could do harm, in your words. there have been concerns about racial and gender discrimination. how do you protect against that?
>> we give pretty clear guidance to the law enforcement agencies that they should only use the predictions that come back from our facial recognition technology if they have confidence levels of at least 99% and then only as one almost of a human-driven decision, but i also understand why people are concerned and i also think that it's very reasonable for governments to put regulations in place that provide extra guidelines for how the technology should be used. >> but what if the problem is not the user but the artificial intelligence taking over all of big tech and its potential for bias? women of color are far more likely to have the secondary screening at an airport than men or caucasian women because you look like an anomaly to a system that for the most part was built by a whole bunch of people who maybe aren't racist but never occurred to them -- >> a whole bunch of white men. >> correct. >> one reason another tech giant, google, has been hesitant to bring this technology to
market so swiftly. google has chosen, at least for now, not to sell facial recognition technologies while your competitors like amazon are moving full steam ahead. >> we realize there are potential cases in which there isn't a clear regulatory framework around how technology can be used. that gives us pause. >> as opposed to some companies who are backing away from supporting the government, we are unwavering in our support to serve government. >> is it worth to given what amazon has brought to the world? >> so the question is is amazon a net good? 100% yes, but the problem is the word, "net." fossil fuels are a net positive for society but we still have emission standards. pesticides are a net positive for us but we still have an fda. amazon has been a net positive. does that mean they shouldn't be broken up when they become noncompetitive? they should be broken up.
>> i would argue if you force the companies to break apart, you could say that that's a national security issue because, quite frankly, we all rely on these companies. we need amazon. we need google. we need apple. we need microsoft. so the question is, where do we go from here? >> my have on this is very simple, all big institutions of any kind are going to be and should be scrutinized examined, scrutinized. inspected. >> we have customers to serve. >> 25 year since the age of amazon gone, bezos' bookstore is a national institution and scrutiny is exactly what it's getting. >> you're telling us, sir, under oath, amazon does not use any of that data to favor amazon products? >> from its ever-expanding size to its impact on the planet. yet, nothing is slin