Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat Apr 6 2013 18:03:01

From Riches to Rags: Amazon's Bezos Invests in Business Insider

By: David Steiner

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Amazon's Jeff Bezos has invested $5 million in Business Insider. I've always been an unabashed fan of Jeff Bezos. He spurned short-term profits in favor of the long-term growth of Amazon and stuck to his guns when Wall Street analysts were unconvinced that Amazon should be spending so heavily on infrastructure. Even fellow CEOs, like eBay's Meg Whitman, scoffed at the business model, but time has proven Bezos correct. To me, he has always been a man who has a clear vision of where he wants Amazon to be, and, torpedoes be damned, he was going to navigate it there.

That's why its disappointing that Bezos would invest in a news site that covers the very same industry in which Amazon is one of the main players. Actually, let me step back a bit - Business Insider is more of a Nooz site. For those of you who have ever bought a bag of frozen Loobster, thinking it was real Lobster, you know that it's not the real thing, but an incredibly cheap imitation.

Let's not read too much into the fact that BI's founder and former Merrill Lynch analyst Henry Blodget has had a relationship with Amazon.com spanning 14 years, before Blodget was unceremoniously booted from Wall Street for dishonest activities: publicly pumping stocks (including Amazon), while privately advising his clients to dump them. 

This is either a wonderfully forgiving country, or one with a very short memory. Michael Milken was the "Junk Bond King," indicted for securities fraud before becoming a great philanthropist. President Nixon was a crook before dying a great statesman. Where else could one shuck the past and reinvent themselves all over again? God Bless America.

So, what bugs me most about this investment? It's not that Blodget's site has questionable content, or has a history of mixing advertising and editorial. It's not even the steady dismantling of the "Chinese Wall" that separates journalism and advertising - although maybe journalistic ethics have no place when it comes to Nooz.

I think what bothers me the most is how we have settled when it comes to who we choose to inform us. When did it become ok to mash news and agenda together? Have Fox News and MSNBC beaten us over the head so resolutely that we just can't discern the difference anymore? Clearly it pulls an audience - Business Insider draws 28 million visitors monthly, yet according to Forbes, operated last year at a $3 million loss.

Businessweek points out that Bezos' investment in BI "is perfectly aligned with his overall philosophy about changes in the media business.  He believes the intermediary layers or "gatekeepers" of traditional media are being threatened by tectonic shifts in the economics of content creation and distribution, and Amazon is investing heavily to accelerate the transition and profit from it."

In his letter to shareholders last year, Bezos wrote "even well-meaning gatekeepers slow innovation." But I'd argue that gatekeepers, otherwise known as journalists, are trained to determine what qualifies as news and dig into the deeper story.  Journalists have a set of ethics in place they must follow to, among other things, avoid conflicts of interests - real or perceived.

It's true that traditional newspapers have fallen on hard times, due in part to their failure to become early adopters of electronic media and inability to monetize their content. Their loss was Huffington Post's and BI's gain, and admittedly, they are great at what they do – drawing traffic. I'd like to think that, had he lived in this age, Edward R. Murrow (on his blog, of course) might be decrying this trend, rather than becoming a part of it.

Corporations don't make investments without expecting a return on their capital. BI has said that they will add disclosures to their Amazon articles in the future. Let's hope they add that same disclosure to articles about eBay, Overstock Google, Visa, and all of the other ecommerce, paid search, payments and financing companies that Amazon competes with - as well as companies in entertainment, music, publishing, grocery - the list of industries Amazon is entering goes on and on.

I've been slapped back into reality. Congratulations to Business Insider for hooking a big fish - one that recognizes that the lines of traditional journalism no longer really exist, and can use that to his advantage.  Shame on me for applying my standards to Jeff Bezos. But mostly, shame on all of us for not demanding better from our news sources.




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Perminate Link for From Riches to Rags: Amazon's Bezos Invests in Business Insider   From Riches to Rags: Amazon's Bezos Invests in Business Insider

by: TomH This user has validated their user name.

Sat Apr 6 18:50:11 2013

Ina:
You work in what has become to an large extent a cesspool--from the above article I'm pretty sure you completely recognize this.

In general all of the industries you mentioned and the managers there of and the media that reports on them appear to have at best only situational ethics -- something like Washington DC and federal government elected and non-elected officials.

eCommerceBytes, you, David and your staff, appear to not be what is happening to so much of media -- it's why I and so many others keep coming back to read what you have to say -- not just rant and vent.
 

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This user has validated their user name. by: Ming the Merciless

Sat Apr 6 21:00:32 2013

Bezos is banking his investment on the probability that the public has a short memory and will soon forget the sins of Henry Blodget.

Bezos has invested in unethical website in order to management and control information and perception. Ebafia does it by hiring at least one company, LiveWorld, to combat or remove things on the internet they don't like.

Our traditional institutions are all broken -- government, big business, health care, and media.

It won't be long before the amoral business elite and the banksters will decide that disclosure is no longer necessary because it's too much information for all noisy rabble to absorb.

Bezos is going to further monetize propaganda disguised as "news," "information," and "investment "advice."

Our local daily political and religious propaganda rag banned me for pointing out their lack of objectivity, failing to disclose political relationships between its staff and an elected official, its chronic failures to present both sides of issues, intentionally burying leads, and the chronic (mis)use of semantically biased headlines.

Whether with Jeff Bezos or virtually any other 21st century CEO, it's always about the money.

Bezos just took a giant leap over The Ho.


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by: Truk This user has validated their user name.

Sat Apr 6 21:36:02 2013

There's virtually no news origination's  at all today most are just commentary more editorial in nature
People seem content with opinion rather than real news
News to me is merely facts assembled in some kind of reasonable order

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by: Ebay's Slow Death This user has validated their user name.

Sun Apr 7 02:58:11 2013

Great article David!

Sometimes I wonder if the sleezy, ''What's in it for me?'' attitude has always affected our media, government, and corporations. But now, it is so transparent, because of the access to information on the internet. It is being exposed more.

Too many people are lazy thinkers, and don't bother to question what they read, or see on TV. They want someone to validate their biases (after all they are always correct), or just entertain them.

There are product placements in books, TV shows, and magazine articles, so why not planted opinions in news articles?

We can no longer have the illusion of integrity, in what we read, see, or hear. We need to become more sceptical and think for ourselves.

It is always about the money!

Perminate Link for From Riches to Rags: Amazon's Bezos Invests in Business Insider   From Riches to Rags: Amazon's Bezos Invests in Business Insider

by: Susan Averello This user has validated their user name.

Sun Apr 7 10:49:48 2013

A guy who has so far stuck to his guns about how he want his site to run against all out side "wisdom" and invested a very small part of his money/Amazon's (? you aren't clear)in a "Nooz" site - saying it is part of his overall view of news media"

Might be profit, maybe he really does want to make a change, he did it with online shopping, making amazon the go to site for almost anything.

5 million is a drop in Amazon's bucket, if he wants to change news media, why not? If you admire based on his track record - why suddenly start comparing him to Milken and declare the sky is fallen.

I'm more tempted to believe, he might actually be on the up and up. I agree this site has become a wasteland for any real insite or news.

Much of it is from one email from a disgruntled user with a bug on Ebay and then 5 days of fussing about how terrible it is. Maybe he should clean up your "Nooz"  

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This user has validated their user name. by: Dr. McCoy

Sun Apr 7 11:33:29 2013

Sounds like someone is not quite grasping the concept of CONFLICT OF INTEREST...

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This user has validated their user name. by: Basset

Sun Apr 7 11:57:33 2013

@Susan Avarello -
''I agree this site has become a wasteland for any real insite or news...... ''

And yet, here you are - right along with the rest of us ''disgruntled'' users : )
Some here do find the news & info on this site useful and often, it is the first place we hear it!



News has evolved long ago from attempts at being unbiased. It is evolving into entertainment and  is agenda driven. It is such an easy fit for the morning entertainment show hosts to become the ''face'' of the evening news.

I go ballistic when the evening news has such vital stories as Lindsay's latest escapade and when the Royals sneeze. I have boycotted one major media outlet ever since the nonstop ''Royal'' wedding  coverage.

Real news should be a compilation of unvarnished, unbiased facts so that the listener can form their own opinion.

At times, I listen to ''news'' talk radio while I work. As a political independent person, I take turns listening to liberal leaning and conservative leaning shows. Which, like one comment said, is all opinion - and so I sit and argue with the radio for fun while I work. Thankfully, I work at home.

So, yes, it IS helpful to know who owns what. Like who Disney owns, who GE owns, who Murdoch owns and now who Amazon owns.

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This user has validated their user name. by: Ming the Merciless

Sun Apr 7 15:54:14 2013

@ Susan

I'm delighted to once again be told that I annoy you and your 'friends.'

Just look at who owns this country's major media television infotainment organizations:

CBS et. al.-Westinghouse
NBC/CNBC/MSNBC, et. al: General Electric
ABC-Disney
CNN: AOL Time Warner
Fox News: Rupert Murdoch/News Corp.

Don't like what the media reports about you or your crooked company?

Buy it!

Want to spin the news in a certain direction?

Buy a media corporation!

Want to pimp your company/stock?

1. Buy an already corrupt Wall Street bankster's "investment" reports.

2. Hold Analyst Days and release vague, spun, and likely inaccurate statistics.

Perminate Link for From Riches to Rags: Amazon's Bezos Invests in Business Insider   From Riches to Rags: Amazon's Bezos Invests in Business Insider

by: FREDDY This user has validated their user name.

Mon Apr 8 08:14:15 2013

We all know - that it is just about the money....
Amazon can put down the 5 as advertising expense-new product or just the corp. - which I believe that is exactly what it is.

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by: JoyfulA This user has validated their user name.

Mon Apr 8 09:08:00 2013

David, you're naive. Real unbiased news might have always been a chimera, but it's clearly been rare to nonexistent in my lifetime. Have you never heard of Judith Miller, the New York Times ace reporter on the runup to the Iraq war? Have you read any of the ''10 years later'' reports on the beginning of the Iraq war, in which various reporters, columnists, and analysts all deny or fudge what they said at the time? Or maybe go back to the Clinton years, when all the news was one purported scandal after another, beginning with Whitewater (a real estate deal in which Clinton lost money) with no attention to the real scandals, such as the repeal of Glass-Steagall.

Which takes us to the honor and decency of Wall Street. There's never been any. Blodgett was driven out, but who's been held responsible for Goldman-Sachs ''slicing and dicing'' doomed mortgages, selling them to clients as prime investments, and then shorting these prime investments?

It's silly to write seriously in 2013 about journalists and gatekeepers and honor among thieves.

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by: JoyfulA This user has validated their user name.

Mon Apr 8 09:16:29 2013

Ming, you're a little behind the times. Comcast owns a controlling share of NBC et al., which is a real conflict of interest. Sumner Redstone owns CBS, along with a lot of other media properties. AOL-Time Warner got a divorce. NewsCorp owns the Wall Street Journal, another clear conflict of interest.

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This user has validated their user name. by: David Steiner

Mon Apr 8 09:24:13 2013

I wouldn't say naive, JoyfulA. Perhaps I have unrealistic expectations, but I'm certainly aware of the cross-pollination that goes on between business and media and politics and media. We don't generally cover the subject on this site, but this falls into our scope of coverage because it involves Amazon.

I think it's important that people realize the affiliation that a news source has with the topics they write about. If you weren't aware of the Amazon/BI relationship before, then you are now.

David Steiner

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This user has validated their user name. by: Ming the Merciless

Mon Apr 8 20:01:09 2013

Thank you for the correction. My list was indeed out of date.

What hasn't changed, however, is the fact that most major news outlets are owned by mega corporations whose self interest is to protect corporations.

Moreover, with the government allowing media corporations to buy more and more, we're basically getting most of our "news" these days from about a half dozen corporations.

Media ownership used to be much more diversified and independent. Today, corporate news tells us how and what they want they us know, and doesn't report or under reports what they don't want us to know.

Perminate Link for From Riches to Rags: Amazon's Bezos Invests in Business Insider   From Riches to Rags: Amazon's Bezos Invests in Business Insider

by: JustTheFacts This user has validated their user name.

Tue Apr 9 13:13:13 2013

It looks to me that Bezo is giving a little friendly payback.

As for "journalism today and ethics", now that is funny.  Those two words should not be used together.

"Gatekeeping" that is NOT a good thing in journalism either.

I do not want anyone deciding what I should see, hear or read.  I just want the "journalist" to report the good, the bad and the ugly and let ME decide what to think, do or how to respond.
To do anything else is not journalism, it is called propaganda.

It is hard to find anything in any form, media or print that is not jaded in some size, shape or form for the writer and or the outlets' benefit.

Media and print are dying because people are tired of seeing and hearing the garbage that goes into them and comes out of them.  The words are SELECTED and the ads placed.  The entire thing is a one giant sales pitch and the journalist is an actor.  It does not matter how big or small the outlet is.

There is NO difference between "news or nooz".  It is ALL garbage IN and garbage OUT.

Why should anyone be surprised that you can be a corporate CROOK who steals billions of dollars from little old ladies today and then be promoted by the same "journalists" and media outlets as the smartest man alive next week.

In America today, if you have not been caught up in at least one giant SCANDAL you are a nobody, you will not get your own cable show, or be CEO of another company.

This article is just one such example and there are thousands more if you just look.  It does not matter if it is business or politics, the new rules are the same.

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by: JustTheFacts This user has validated their user name.

Tue Apr 9 16:20:12 2013

"This article is just one such example and there are thousands more if you just look.  It does not matter if it is business or politics, the new rules are the same."

Meaning the story about Bezo and Henry Bodget.

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This user has validated their user name. by: Basset

Wed Apr 10 08:17:15 2013

Just the facts.

''Media and print are dying because people are tired of seeing and hearing the garbage that goes into them and comes out of them. The words are SELECTED and the ads placed. The entire thing is a one giant sales pitch and the journalist is an actor. It does not matter how big or small the outlet is.''


That is SOoooo true about big news media. Actually I ditto everything you said (but I'm NOT a ''dittohead'': )

''Selected & placed''……has other meaning, too -  I'm beginning to feel trained to look for the ''Friday afternoon news release'' that they hope will be overlooked by the public or at least be watered down by weekend events. Who knows, if something big enough happens on the weekend, the story could go away completely!

Not to mention the news of national importance that is all but buried on a higher number page under the advertisements or obituaries. I'm talking something that SHOULD be on or near the first page.  If it does not fit the agenda of the publisher, it is buried.

It is refreshing this site does not play these games.  Would be nice if major print, radio, & video news media would take note that you can have a successful product without being agenda driven.  

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by: JoyfulA This user has validated their user name.

Wed Apr 10 09:43:39 2013

Ming, my criticism sounds harsher than I meant. Your comments are typically so en pointe that I was taken aback by your inaccuracy.

Carry on!  

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by: JoyfulA This user has validated their user name.

Wed Apr 10 10:35:01 2013

David, I've reconsidered and still say naive. I was at least that naive until middle age: I despised Clinton (and still do) and yet was gobsmacked by the bizarrely negative ''news'' coverage he received from the so-called liberal media; I permanently turned off NPR, for example.

In 2004, I got person-to-person validation of my growing cynicism. I was an early supporter of Howard Dean, and my friend was in the third row to hear his notorious ''scream'' speech. She couldn't hear him ''scream'' for all the noise in the room, but the noise-canceling lapel microphone a reporter supplied provided the incessantly media-mocked scream speech. I wrote to various journalists and columnists (some of them big names) who wrote about the crazy, out-of-control Dean to politely explain and contradict them. The typical response I got was that I have no sense of humor (! about the future of my country and my civilization?) and that regardless of accurate or not, the scream is now established as history and I should get over it. (Yet the anonymous cabal, later determined to be Gephardt and Kerry, financing last-minute negative ads against Dean was reported maybe twice and never mentioned since spring 2004.)

So I've distrusted journalists and media for a long time and taken news as ''nooz'' with a grain of salt.

My business news comes from Seeking Alpha (many contradictory analyses and knowledgeable reader pushback), Barry Ritholz's ''Big Picture,'' and the economist bloggers like Atrios and Brad DeLong. (And I do some work for business book publishers.) Yes, I have substantial self-directed IRAs, and I pay attention.

In sum, when you're my age, you're apt to be as cynical as I am. You're on the right track.

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by: JoyfulA This user has validated their user name.

Wed Apr 10 10:39:10 2013

What Basset wrote about JusttheFacts.

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This user has validated their user name. by: David Steiner

Wed Apr 10 10:57:15 2013

Curious, JoyfulA - just how old do you think I am?

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