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It doesn't matter to me whether we're a

pure internet play. What matters to me is

do we provide the best customer service.

Internet Shminternet

Given the decades of wisdom that has built up

in the business world investors, it sounds

like you're saying you're making a big

speculative bet, if they're investing in

your company's stock. Well I think all

Internet companies you know the stocks are

incredibly volatile...

But even long term.

Long term I believe. That

it's very easy to predict that there are

going to be lots of successful companies

born of the Internet. They're going to have

very large market caps and so on. I also

believe that today where we sit it's very

hard to predict who those companies are

going to be. So you know you can make bets

on these things and I think that Amazon.com

if we don't if we're not one of those

important lasting companies born of the

Internet we will have nobody to blame but

ourselves and we will be extremely

disappointed in ourselves. But there are no

guarantees. It's very very hard to predict.

If you go back and look at the companies

created by the P.C. revolution in 1980 you

wouldn't have predicted the five winners the

five biggest winners. There've been lots of

winners actually. So this space is a little

different and brand name may need may mean

more and then there's some increasing

returns kinds of things maybe more. But I

believe that if you can focus obsessively

enough on customer experience, selection,

ease of use, low prices, more information to

make purchase decisions with. If you can

give customers all that plus great customer

service and with our toys and electronics we

have a 30 day return policy. If you can do

all of that then I think you have a good

chance. And that's what we're trying to do.

You're not really a pure Internet company

anymore either. I mean you've got millions

of square feet now of real estate. You've

got a growing huge and growing inventory of

items with you keep in stock. You've got

thousands and thousands of employees now.

We have over 3000 employees and over four

million square feet of distribution center

space. And those are things I'm very very

proud of because with that distribution

center space and half a dozen distribution

centers around the country it allows us to

get product close to customers so that we

can ship it to customers in a very timely

way which improves customer service levels.

That's what we're about. If there's one

thing Amazon.com is about its obsessive

attention to the customer

experience, End to end. And that's what

those distribution centers.

But you're not a pure Internet play.

It doesn't. It doesn't matter to me whether

we're a pure Internet play it matters to me

is we provide the best customer service.

Internet Shminternet. It's that's you know

that doesn't matter.

Well but it does matter to your investors to

know whether they're investing in a company

that is...

No, they should be investing in a company

that obsesses over customer experience in

the long term. There is never any

misalignment between customer interests and

shareholder interests.

Well that's the same argument that somebody

at WalMart would make as well.

I don't see why not. I think they should make

that argument. So it's a correct argument.

OK.

So you'll open as many square feet of space

physical space as you have to hire as many

employees as you have to...

To service customers.

Absolutely. And we'll do it as rapidly as we

can.

That's a very cost intense proposition.

Not compared to opening an equivalent network

of retail stores.

So if you open a bunch of chain stores. Look

when we open a distribution center we're

opening places that may have square where we

may pay 30 cents a square foot for for a

lease instead of paying seven dollars a

square foot which you might pay in a high

traffic retail area. So when you compare

those things they're not the same. You can't

compare a big chain of of of of retail

stores to half a dozen distribution centers.

It's just not you know it's bad math.

Either way whichever side of the argument you

believe you're making what it seems to me.

There's only one side which is obsess over

customers.

But it seems to me that. Both with the speed

of your growth in terms of the number of

stores online that you're opening the

different businesses you're getting into the

number of distribution centers and you're

opening a new employees you're hiring

That you are making an intense gamble here

which is twofold. One that you can run this

number of businesses different businesses

well. And two that you can make money by

selling vast volumes of products and

essentially razor thin profit margins.

I think that the the first one in particular

I agree with wholeheartedly which is that

where

There there's no guarantee that Amazon.com

can be a successful company. What we're

trying to do is very complicated. There's

huge execution risk involved. We have a

terribly complicated business. We're

growing, you know, historically very

rapidly. We're opening new product

categories we're expanding in new

geographies. We have whole new business

models with things like auctions. Now we

think this is the less risky of the two

approaches because scale is important in

this business. And you need scale also to

offer the lowest prices and the best

customer service to people. So scale is

important to us and we're going to go after

that kind of scale. But it does mean that

the executional challenges are huge. And so

you'll find a bunch of people back in

Seattle and around the world working very

hard to make sure we service customers at

the level that they're used to. And then

even improving that.

Isn't it to some extent a certain amount

of, with all do respect,

corporate arrogance to assume that you can

come into these businesses which you have no

experience in and virtually overnight enter

a huge variety of different businesses and

become the best in those businesses and the

market leader in those businesses. There are

other companies that have been running these

types of businesses for decades if not more.

I don't think so. So you know when we first

started selling books four years ago we were

everybody said look you're just computer

guys you don't know anything about selling

books. And that was true. But what we really

cared about customers and now we know a lot

about books and when we first started

selling music people said the same thing but

we hired the right people. So we don't do

this in a vacuum. We go out and hire the

best industry experts in each of these

categories. That's the same with toys

electronics. So you know we take this very

seriously we take the commitment to the

customer very seriously and we're not about

to release something or announce something

before it's ready.