SEATTLE NEWS ARCHIVES & FEATURES
Could Seattle’s Amazon become the next AOL?
Sep 22, 2017, 11:52 AM | Updated: 3:49 pm
(AP Photo/Patrick Semansky)
(AP Photo/Patrick Semansky)
Amazon’s announcement that it is building a second headquarters has received a lot of attention in recent weeks. As it should. When a company says it’s going to invest $5 billion and 50,000 jobs in your city, that seems like a pretty good deal. But is it?
RELATED: Reading between the lines of Amazon’s HQ2 announcement
I came across a dissenting opinion from Steven Strauss with USA Today. He raises some interesting points:
Elected city officials (who make less than $250,000 a year) are about to negotiate with Amazon founder Jeff Bezos (net worth of about $80 billion). Amazon’s team will be more experienced, better paid and have better resources than the government teams. More important, the Amazon team will focus keenly on what’s best for Amazon.
I would have to agree there. I would put my money on Amazon to get the better end of that deal. He’s basically saying that any city that enters into this high stakes negotiation is bound to get screwed. I don’t know if that part is true. I keep expecting for the shopping giant to begin to squeeze its customers for more profit, but they seem uninterested in that. Even at this size, they’ve remained remarkably focused on the customer experience.
But they will definitely get a sweetheart deal for HQ2. Especially with the frenzy they created with their announcement. Nothing gives you leverage like 100 other cities vying for your attention. The pretty girl at the dance can pick and choose who she slow dances with.
Strauss’ next point is more intriguing to me:
A big subsidy for Amazon HQ2 … might make sense if Amazon is one of the long-term winners in the ever changing American economy. The technology sector has many examples, however, of great companies that failed (Digital Equipment Corp., Wang Laboratories, Prime Computer) or stopped growing and/or shrank (AOL, Yahoo). If Amazon fails, stops growing or simply changes its strategic direction, it may not need HQ2.
In other words, the 15 years it’s going to take to build HQ2 is a long time. Is it possible that Amazon is the next AOL or Yahoo? I definitely remember that AOL CD-ROM falling out of every magazine I read.
For you millennials, a magazine is like a website, but on paper. It comes in the mail. Mail is a letter delivered by … oh, never mind.
It’s definitely possible, but I don’t think it’s probable. Amazon is so diversified in its product offerings at this point, that even if one starts to fail, they have others to prop it up. But hey, anything is possible.
So what are we talking about here?
When I think about Amazon’s new HQ2, and the $5 billion they promise to spend, and the 50,000 new jobs, it seems that if the local officials had a bit more vision, those billions and those jobs could have stayed right here in Washington state.