Go Long, Young Man

A report from the past.

When we visited the founder of Amazon.com a year ago ("Inside the Mind of Jeff Bezos," August 2004), he talked about the importance of doing what's best for customers in the long run, even if it's painful for the company in the shorter term. As an example, he spoke of his decision to offer free shipping on orders of $25 or more. "You can do the math 15 different ways, and every time the math tells you that you shouldn't lower prices 'cause you're gonna make less money," Bezos said. "That's undoubtedly true in the current quarter, in the current year. But it's probably not true over a 10-year period, when the benefit is going to increase the frequency with which your customers shop with you -- the fraction of their purchases they do with you as opposed to other places."

That move alienated many people on Wall Street, who have tunnel vision about the current quarter and year. Since the article appeared, Bezos has further annoyed the analysts by introducing Amazon Prime: unlimited two-day shipping for a flat rate of $79 annually. Customers love it, but stock analysts and speculators have responded by punishing Bezos for farsightedness. The shares, which traded at $50 when our story ran, fell to $35 this summer.

Bezos also told us about surviving a helicopter crash in remote West Texas. Now we know what he was doing there: buying 165,000 acres for his own version of Cape Canaveral. He believes it will probably take six to eight years before he can send tourists into space. But that's not long for a visionary like Bezos.

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