The lovable origin stories told by Silicon Valley entrepreneurs are often whoppers confected purely for the sake of public relations. The practice of lying about the beginnings of your company is coeval with Silicon Valley entrepreneurship itself, and it’s been exposed frequently enough to have attracted comment on This American Life nearly ten years ago.
The tall tale of Pierre Omidyar’s desire to help his girlfriend trade Pez dispensers was dreamed up by eBay’s first employee, Mary Lou Song; Google was founded at Stanford on a government grant, not in a garage; the dinner-party video said to have inspired the creation of YouTube is alsoooo, well, in some question. Called out by TIME magazine on this in 2006, YouTube’s Steve Chen explained that the story “was probably very strengthened by marketing ideas around creating a story that was very digestible.” Which… now we can be pretty sure that most everything these clowns say is “probably very strengthened by marketing ideas,” which sounds just entirely indigestible, and it is also wrecking civilization, such as it is.
In the case of Jeff Bezos, the ol’ garage ploy appears to have been not merely cynical but strategic, thought out in advance; according to John Cassidy in Dot.con (2002), Bezos, the former vice president of a hedge fund and thus eager, perhaps, to make himself over as a scrappy underdog and “entrepreneur,” evidently made sure that the house he first rented in Bellevue, Washington was equipped with a garage, so he’d be able to say that he started his company in one. “With his baby features and his infectious cackle, he could all too easily be portrayed as the goofy boy next door,” Cassidy wrote.
But Jeff Bezos is about as goofy as a rattlesnake. He began crafting his media-friendly imagery before his company had even fixed on a name. His desire to control the narratives around Amazon appears to have begun with the rented garage, by which we may infer that he has always understood the power of the press, and of public opinion, over his fortunes.
Two examples of that power emerged last week, which saw a substantial backlash against Amazon’s decision to locate its new “HQ2” offices near Queens, New York and Washington DC, rather than in any of the smaller, poorer, more job-hungry communities that had vied for the privilege. Criticism grew last week, as well, against the idea of citizens shelling out tax subsidies to help out the world’s richest man, a man so rich he doesn’t know what to do with his money (or “Amazon winnings” as he calls it), I guess he can make himself another clock or spaceship.
Last week’s second Amazon story was smaller, but in certain ways more significant. The company reversed a decision that had been announced only days before by its subsidiary, the antiquarian bookselling site ABEbooks, to stop doing business in the Czech Republic, Hungary, Russia and South Korea, allegedly because of difficulties with payments processing. The near-immediate reversal of this plan came after two shows of resistance from booksellers: The United Kingdom’s venerable Antiquarian Booksellers Association nixed its deal with ABEbooks for the sponsorship of its prestigious annual fair; and separately, around 600 sellers of rare books all over the world heard the news and promptly withdrew more than 3.5 million of their own listings from the site, in solidarity with their colleagues.
The fact that concerted action can have any effect at all on the titans of Silicon Valley comes as a welcome surprise. But this one success in no way lessens the real danger in which Amazon has placed the world’s culture. Bookseller Scott Brown observed to Corinne Segal at Lithub last week, “Booksellers believe in the free exchange of ideas. [T]hat the entirety of the Czech Republic would be excluded from the largest venue for antiquarian books in the world strikes at the core of that belief,” he said. Which, yeah. But now everyone has seen that it can be, and at the drop of a hat. One company can very nearly bar you from a whole country’s worth of rare books, whenever they want. Just like that.
According to an FTC complaint filed last month by the American Booksellers Association, Amazon now controls 75 percent of online sales of physical books, 65 percent of e-book sales, more than 40 percent of new book sales, and about 85 percent of self-published e-book authors.
That all took place over just a couple of decades.
Amazon’s entire inventory began as a massive loss leader. The company’s original business strategy, explicit from its first IPO prospectus in 1997, was to spend massively with the sole purpose of acquiring market share. The prospectus, according to Cassidy, demonstrated that the company was losing five dollars on each book it shipped. But having once established dominance as the largest online retailer, the story went, profits would flow in the classic winner-take-all denouement.
The rare book trade is a particularly stark example of Amazon’s practice of acquiring and squashing nearly all its competitors in order to achieve market dominance.
From the first moment, the used and rare book trade was ideally suited to the Internet. It was already a firmly established mail-order industry, long accustomed to serving far-flung individual customers through printed catalogs. Without centralized databases, however, it had been impossible for buyers or sellers of rare books to learn very much about what was really available at any given time, or to form a true idea of demand, and therefore pricing. The Internet took care of that problem in short order, revolutionizing the trade within a very few years, producing an orgy of buying and selling as books and ephemera that had been impossible to find in a lifetime’s searching flooded online. A brave new world, ripe for the grabbing.
In April of 1999, Amazon announced the acquisition of three web properties at once: Alexa Internet, a web analytics service; Accept.com, a payment processor; and Exchange.com (formerly e-Niche). Exchange.com was the operator of two shopping sites for rare and collectible goods: Bibliofind, a marketplace for second-hand and rare books, and Musicfile.com, for rare music and memorabilia. The total cost for the three companies was $645 million, “in separate substantially all-stock transactions.” Amazon’s share price was then hovering around a hundred dollars.
Exchange.com’s acquisition of Bibliofind just a few months earlier, in January of 1999, had been a nine days’ wonder in the rare book world. Founded by Great Barrington, Massachusetts booksellers Michael and Helen Selzer in 1996, Bibliofind was far and away the best used/rare book search engine then in operation, with around nine million books listed in a very active marketplace, and a quite nippy database with an elegant, flexible search function. The news that the Selzers were selling the much-loved Bibliofind was greeted with horror by many booksellers (for example on the Bibliophile listserv, of which, as a bookseller and collector, I was then a member.)
In announcing the sale of Bibliofind to listing booksellers (in a letter preserved in Volume 28 of Antiquarian Book Monthly), Michael Selzer wrote, “e-Niche was the first potential [acquirer] we met […] which shared our vision for Bibliofind’s future and our concern for preserving the values of antiquarian bookselling.” But not four months later this shared vision evaporated when e-Niche, rechristened as Exchange.com, passed Bibliofind along to Amazon—long considered, even back then, as the Great Satan of the rare book trade. We cannot know if there was any understanding between Exchange.com and Amazon prior to the Bibliofind sale, but it seems likely that the man in the middle, an entrepreneur by the name of Stig Leschly, made a handsome return on his company’s $6 million.
Amazon’s bad rep among booksellers was mainly the result of its far higher fees and commissions in contrast with Bibliofind’s very small monthly listing fee and no commissions. (Then as now, Amazon charged a commission on each book sold.) In 1997, a bookseller with 40,000 listings would have paid Bibliofind a flat fee of $25 each month, no commissions; $5,000 in monthly sales meant a Bibliofind bill of $25. At ABEbooks today, the cost for the same amount in revenues, assuming 40,000 books in inventory and $5,000 in sales at an average price of $20 per book would total around $800 in monthly fees ($275 in credit card fees using ABE’s payment processor, plus $125 in monthly subscription fees and $400 in commissions): a 32-fold increase.
Now add to this the barriers put in place to prevent direct contact between sellers and potential buyers. Twenty years ago at Bibliofind you could blab with booksellers and ask questions directly, to your heart’s content; Bibliofind would make the same money regardless. Amazon, however, faces a loss of commissions if buyers and sellers should cut out the middleman. Thus the heavy hand of Amazon mediates every contact between the two parties via forms and agreements one must comply with, or face expulsion from the site. Gone, then, the immediate camaraderie between knowledgeable seller and curious buyer. Gone, in fact, the whole sense of a community.
The loss of Bibliofind’s search function was a grave one, too. You could search the old Bibliofind for text strings as well as keywords, so that any mention of “Oliver Messel” or “Krazy Kat” would turn up from anywhere in the whole database, even if it was a passing reference in some weirdo old magazine. Whatever random facts a bookseller had thought to mention in a description would be indexed and responsive to search. To my knowledge, the only big bookseller online where anything like that kind of search flexibility is remotely possible now is eBay.
It might not sound like much, but text-string searches represent the lowest impediment to the free flow of information. To be able to search a whole giant corpus at will for the needle of your desire in the Brobdingnagian cultural haystack means that your personal interests needn’t take a back seat to corporate imperatives of any kind. Full, absolute text searches should be the goal for all searchable databases.
In case you are wondering what Amazon’s motive might be in taking away this function, I can only guess. Which I generally do, in considering the activities of FANG (the EU’s nickname for Facebook, Amazon, Netflix and Google), by putting profit before all other considerations, and conjecturing from that point. We might guess that it benefits Amazon to control what you search for in order to better persuade you to spend; it benefits Amazon to control what you see as the result of any search. Like Google, and like Facebook, Amazon has complete control, with no transparency and no oversight, over what happens when you search for something over there. They have the power to choose exactly what you see. We can only guess at the degree to which they exercise that power.
Anyhow. Where Bibliofind had been operated by booksellers for booksellers, and for readers, Amazon was and is run along relatively profit-minded lines, and arguably to the detriment of those two groups.
But when it’s the only game in town, booksellers are under pressure to stay in.
Amazon completed its domination of the used and rare book business in 2008 with the acquisition of ABEbooks. Unlike Bibliofind, however,which had been completely subsumed into the Amazon marketplace without a trace by 2001, ABEbooks persists, and it is not at all apparent by visiting that ABEbooks is even owned by Amazon. In fact the word “Amazon” appears nowhere on ABEbooks’s home page. This too amounts to a kind of origin myth, told to lend a personal, intimate gloss, perhaps, to the real corporate imperatives underneath. ABE is a placeholder for Amazon’s hegemony. The reality behind the story is something that we’re perhaps not meant to know.
American business practice in our time consists not only in offering an attractive product, but also in throwing as many spanners as possible into the works of your competitors. The goal is not to become one among many, but to crush all alternatives. This may explain why, in the first dot-com boom that began in the mid-1990s and ended in April of 2001, so much money went to the acquisition and eventual strangling of so many promising mom-and-pop online startups. These businesses must not be allowed to grow, or they must be acquired, in order that markets might be captured by those who’d attracted the most power in the form of capital—not through any particular excellence of product, or of management. With the results that you see all around you.
In the opinion of this former bookseller, Amazon represents a threat to the commons; a threat to libraries; a threat to independent publishing; a threat to an informed, intelligent public. The late Ursula Le Guin, who knew the score about most things, had this to say about Amazon’s business model in 2015.
As a book dealer and publisher, Amazon wants no competitors, admits no responsibilities, and takes no risks.
Its ideal book is a safe commodity, a commercial product written to the specifications of the current market, that will hit the BS list, get to the top, and vanish. Sell it fast, sell it cheap, dump it, sell the next thing. No book has value in itself, only as it makes profit. Quick obsolescence, disposability — the creation of trash — is an essential element of the BS machine. Amazon exploits the cycle of instant satisfaction/endless dissatisfaction. Every book purchase made from Amazon is a vote for a culture without content and without contentment.
Antiquarian and rare booksellers are a heterogeneous gang of loners and bookworms, historians, comix guys, bluestockings and goateed, bespectacled bookmen with cats sleeping in their front windows: the world of 84 Charing Cross Road, Shakespeare & Co., City Lights, the Last Bookstore, Powell’s and the Strand. That is true enough but there is more to bookselling than that romantic and pleasantly seedy picture suggests. It’s not too much to say that the sellers of used and rare books, in tandem with librarians and archivists, give shape to the cultural heritage of the world simply by choosing which books to keep and stock—what to preserve, and what to let go—and by passing their book knowledge on to readers, scholars and collectors. This is what the Amazon model has been in the process of removing, over the last twenty years, from book culture in America and everywhere else.
Fortunately it’s the channel that has changed, and not yet all the inventory. Let me close by recommending holiday shopping outside, in the air, on the street, at a real bookstore.
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Amazon, ABEBooks, ABE, rare books, antiquarian, market dominance, monopoly, Jeff Bezos
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