Here’s why Amazon founder Jeff Bezos and The National Enquirer’s parent company are in a public feud over allegations of blackmail and extortion.
Before his bombshell accusation that American Media Inc. (AMI) was trying to extort and blackmail him, Amazon CEO Jeff Bezos was cast in some corners as a villain.
With Bezos counterpunching hard against the National Enquirer publisher, the richest guy in the world may not only come off as hero of sorts to anyone who has ever confronted a bully but as an advocate for traditional journalism. Perhaps even someone who may emerge as more of a regular person, at least to the degree that anyone who sits atop the Forbes 400 can be portrayed that way.
Consider Bezos’ somewhat negative standing prior to his post on the Medium blog website where he accused AMI. The billionaire founder of Amazon, the Blue Origin space flight company, and owner of the Washington Post – in the midst of a divorce from his novelist wife MacKenzie – found himself in tabloid purgatory after the National Enquirer published intimate text exchanges between Bezos and Lauren Sanchez, the former Los Angeles television news anchor with whom he was having an extra-marital affair.
But that’s not all. Through the years Bezos, a demanding boss, has been accused of creating a brutally cutthroat workforce culture at Amazon. What’s more, despite his enormous wealth, he has also been labeled stingy.
At the same time, Amazon has grown so big that concerns are often raised about its powerful and disruptive tentacles, which reach the cloud via Amazon Web Services, store shelves at Whole Foods, and kitchen countertops through the familiar voice of Alexa.
Most recently, Amazon has encountered criticism for its drawn out and controversial sweepstakes to decide which municipality would be granted its second corporate headquarters, an award that eventually went to Northern Virginia and Long Island City, New York, though the saga may not be over. The Washington Post on Friday published a report that Amazon may be reconsidering the New York location, over a political and community backlash.
“His reputation hasn’t been stellar before for these other reasons, not to say these claims are true,” says Ari Ginsberg, a professor of entrepreneurship and management at the New York University’s Stern School of Business.
Bezos, of course, would probably be the first to admit that his Medium post, and the events surrounding it, wouldn’t be the preferred approach to bolster his reputation.
“Of course I don’t want personal photos published, but I also won’t participate in their (AMI’s) well-known practice of blackmail, political favors, political attacks, and corruption. I prefer to stand up, roll this log over, and see what crawls out,” Bezos wrote.
“It’s sort of an interesting way to achieve a positive benefit,” says brand strategist Bob Killian of Killian Branding, adding that it’s a very low bar to rise above the National Enquirer.
For the most part, Bezos has been a reclusive leader with a profile that, until recently, hadn’t matched that of Tesla’s Elon Musk or Facebook’s Mark Zuckerberg, both of whom have run into their own problems, though different.
“My inkling is if he were thrown in a lineup, most people couldn’t pick him out,” branding expert Rob Frankel says of Bezos.
Topping the Forbes list and running the Post, even as he’s left day-to-day management to the journalists, has surely raised Bezos’ visibility, of course. He has also been a frequent target of President Trump. But it took the Sanchez-National Enquirer affair to plaster Bezos’ mug on the front pages of the tabloids.
Taking down rich and famous
The risk to Bezos’ reputation comes with the three things Frankel claims Americans can’t get enough of: a rags-to-riches story, the lives of the rich and famous, and seeing the rich and famous get taken down.
“For better or worse, he’s going to get pummeled. This is going to be a very bad year for the man,” Frankel says.
But Killian takes the opposite view: “It’s such a ho-hum, rich-guy-has-a-mistress-and-P.S.-so-what (story). But now, this sort of evil enterprise tries to blackmail him and he fights back by doing something very bold – that’s a much better story,” Killian says.
The impact on Amazon
Bezos may himself be tarnished, but experts don’t expect Amazon to take a hit.
Bill George himself a former CEO at Medtronic and now a professor at Harvard Business School thinks Bezos made a terrible mistake when he got into this situation in the first place since he should know better that anything you say, write, or post can be too easily shared.
“CEOs are public figures and Bezos is one of the most public figures there is, even though he’s a private person,” George says. “I think he wasn’t thinking clearly when he did these things. He is the reputation of Amazon and rapidly becoming the reputation of the Washington Post. Does this harm (them), you bet.”
But George believes the harm he caused is minor, because Bezos ultimately did the right thing by being transparent and not giving into the blackmail.
“I don’t believe it’s going to have any influence on Amazon at all,” Frankel insists. “As long as (consumers) can get free shipping on a pair of slippers over $25, they’re going to (shop there).”
Ginsberg agrees: “I don’t think this is going to worry the shareholders and impact the stock. What’s more important is what the company is doing strategically in terms of technological advancements, and growth into new areas….I don’t think customers are going to stop using Amazon because of what’s happened over the last week, (and) I don’t think this puts a cloud over the company or the company’s leadership.”
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