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REFLECTIONS ON 2001

Jeff Bezos, Internet Retailer

December 30, 2001

Jeff Bezos,

Internet Retailer

Jeff Bezos, 37, is founder and CEO of Amazon.com, the giant Seattle-based Internet retailer.

As the poster child of the Internet revolution, Bezos has ridden the dot-com roller coaster--in 1999 as Time Person of the Year, then this year as Wall Street's whipping boy as Amazon.com's valuation plunged 90% from its peak two years ago.

A chronic optimist, Bezos steadfastly has maintained that Internet sales ultimately will account for 15% of all retail spending from less than 2% today, even with the slowdown after Sept. 11.

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I've been a broken record on 15% for about five years. I haven't changed. People have changed around me. People said 50% in 1999 and I said, "No, 15%." Now people say 5%, and I say, ''No, I still think 15%.... "

I mean, it's very hard to know in the fullness of time how big something is going to be.

But 15% is bigger than catalog sales and catalog sales is an interesting proxy. It's only a proxy because, clearly, online has a lot more potential than catalog sales....

I've always said this would happen in 10-plus years. If you look at our book business, we're about 7% of that segment. I'm hopeful that over time, that segment may be able to go above 15%. I've never tried to make any year-by-year predictions on growth, because that's so hard. Strangely, it's easier to make long-term predictions than short-term predictions in some cases, just because you don't know, there could be burst in years and then slow years....

[After Sept. 11] we saw a lot of interesting things in our sales data. Travel books are flat to down, whereas road atlases and maps are up.... That indicates people are driving. We've seen strong sales increases like tripling in children's history books about war, about how the government works. [We're also seeing] strong sales of any kind of emergency items: scanners, all-hazard radios, flashlights ... GPS devices.

Computer and Internet book [sales] are down. And business books, books about stock market investing. People are not eating out as much. Kitchen store [sales] in general have had dramatic growth rates.

People are trading down. [They are buying] lipstick instead of dresses, because it's a splurge you can afford.

[In technology] I think what you're seeing today--even though it's very useful--it's still very primitive compared to what it will be 10 years from now. So, it might not quite be at the Kitty Hawk stage, but nor are we at the DC-9 stage either....

I remember when I graduated from college, the hot PC on the market was 1 megahertz. Now, it's 1 gigahertz. It's a thousand times faster. That's the kind of trend you see in technology.

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As told to Alex Pham

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