In July 1994, Jeff Bezos stop his Wall Street job, packed up a automotive together with his spouse MacKenzie, and drove cross-country to Seattle to launch an internet bookstore. That won’t sound like a massive deal immediately, when Amazon is in every single place and the web runs our lives. But again in 1994, the online was barely even a factor. Keep this context and historical past in thoughts:
The very first web site (information.cern.ch) was launched in 1991. By the top of 1992, there have been simply 26 complete web sites. In the center of 1993, the online had grown to 130 web sites. By late 1993, Marc Andreessen created Windows and Macintosh variations of his Mosaic browser, the primary actual user-friendly internet browser. Thanks to Mosaic, on the time Jeff and MacKenzie made their cross-country trek, the World Wide Web had grown to a grand complete of 2,700 web sites.
This is how the world seemed when Jeff determined to surrender a particularly high-paying, soft hedge fund job to launch an internet bookstore.
Amazon wasn’t the unique title. Jeff wished to name it Cadabra, as in abracadabra. But when his lawyer misheard it on a telephone name as “cadaver,” Bezos properly modified course. He flipped by the dictionary and landed on a title that felt larger, bolder, and filled with chance: Amazon — the biggest river on the planet.
What began in a storage with a door-desk and a primary web site quickly turned one of the vital bold startups of the web period.
By the time Bezos launched Amazon in July 1995, it was one in all simply 23,000 web sites on your complete web. His pitch? “Earth’s biggest bookstore.”
- In 1995, Amazon generated $511,000.
- In 1996, Amazon generated $15.7 million.
On May 15, 1997, simply three years after Jeff’s cross-country trek, Amazon went public at $18 per share. That gave the corporate a market cap of $438 million. That 12 months, Amazon generated $150 million. In 1998, Amazon generated $600 million.
(Photo by Kay Nietfeld/image alliance through Getty Images)
The Summer of 1998
In the months after its IPO, Amazon began shopping for up strategic items of the early internet, most notably IMDb and PlanetAll. These had been early bets on what we now name infrastructure: id, neighborhood, and content material. But in the summertime of 1998, Bezos made a a lot larger guess — one which appeared like a slam dunk on the time.
Amazon introduced it was buying a Silicon Valley startup known as Junglee for $185 million in inventory.
Junglee was one of many earliest product search engines like google and yahoo. It allowed customers to evaluate costs throughout a number of e-commerce websites — basically a precursor to what Google Shopping, Kayak, and Honey would later good. The tech was refined for its time, and the founding crew was made up of elite engineers from Stanford and the Indian Institute of Technology. At the helm was Ram Shriram, a quiet however revered exec who had beforehand been a VP at Netscape, the corporate Marc Andreessen created and took public in August 1995.
Bezos wished to fold Junglee’s expertise into Amazon’s rising product catalog. He additionally wished to fold Junglee’s workers into Amazon’s Seattle headquarters. Partly for camaraderie and synergy, but in addition for a very crucial enterprise purpose: At the time, Amazon did not cost gross sales tax for any buy. If Amazon had workplace house or workers in California, it could be thought-about a California firm and due to this fact would have to cost California prospects gross sales tax.
The Junglee crew reluctantuly left the temperate Bay Area and their enjoyable begin up workplace and moved to dreary Seattle and a very corproate world. It was a catastrophe from the beginning. The engineers clashed with Amazon’s current tech stack. The product integration stalled. And inside a few months, a lot of the crew had stop and moved house.
By the top of the 12 months, Amazon had quietly written off the deal. The $185 million acquisition was, on paper, a failure.
Was Bezos pissed? I’m positive. But that anger would quickly be relieved by a essential introduction.
Back to the Bay
One of the Junglee workers who deserted Amazon and Seattle was Ram Shriram. Ram returned to the Bay Area and reconnected together with his former circle of engineers, most of whom had been Stanford grads. These engineers could not cease raving about a new search engine — one with a humorous title and eerily superb outcomes.
The search engine was truly the results of a PhD dissertation co-authored by two Stanford students named Larry Page and Sergey Brin. Larry and Sergey had spent the earlier 12 months constructing a new approach to manage the online utilizing a system known as PageRank, which ranked web sites not simply by content material, however by what number of different respected websites linked to them.
Unlike the chaotic, spam and ad-cluttered search engines like google and yahoo of the day — Yahoo, Lycos, Excite — this new one truly labored. It felt sensible. Clean. Useful.
FYI: In late 1998, there have been round 2.4 million web sites.
Shriram tracked down Larry and Sergey. Thanks to his experiences at Netscape then Junglee then Amazon, he knew this was a enormous dea. In late 1998, shortly after Andy Bechtolsheim and David Cheriton gave Google its first $200,000 angel funding, Ram Shriram became investor #3, writing a examine for $250,000.
Within a few weeks, a few extra buyers got here aboard, bringing Google’s “seed round” funding complete to $1 million. And at that time, the funding was supposed to be closed.
Jeff Wants In
Apparently, the disastrous Junglee deal did not create any unhealthy blood between Jeff and Ram as a result of they continued to chat repeatedly. On one in all their chats, Ram advised Jeff about Google and his funding. Jeff was immediately obsessive about each Google AND the concept of getting a piece of the motion.
Desperate to get in on the deal, Jeff organized to take a trip within the Bay Area and begged Ram to arrange a dinner with the Google boys.
Keep in thoughts, Amazon was a fairly massive deal on the time. Amazon had been a public firm for about a 12 months, and Jeff was a paper billionaire. He wasn’t just a few random man from Seattle. Afterall, he had simply purchased Junglee for $185 million.
So you may perceive why Larry and Sergey agreed to reopen their funding spherical to make room for yet one more investor. And that’s how Jeff Bezos wrote Google a examine for $250,000 in September 1998.
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The Quietest Billion Ever Made
That $250,000 examine reportedly entitled him to 3.3 million shares of Google by the point the corporate went public in August 2004. At the IPO worth of $85 per share, his stake would have been price $280 million on day one.
Bezos has by no means publicly mentioned the funding. Google’s SEC filings by no means point out him. And if he is bought any shares since, the small print have by no means been disclosed.
But here is the place issues get wild.
In 2014, Google accomplished a 2-for-1 inventory break up. In 2022, they did a 20-for-1 break up. That means Bezos’s 3.3 million shares would now equal 132 million shares of Alphabet.
At immediately’s worth of $165 per share, these shares can be price $21.8 billion.
That’s roughly 1% of your complete firm.
Now, it is extremely unlikely Bezos held onto each share. But even when he bought a giant portion, it is nearly sure this quiet, early-stage deal made him a Google billionaire — quietly, passively, within the background — whereas he was busy turning Amazon into a international empire.
If you are still skeptical, think about this: Ram Shriram’s internet price is $3 billion, and it comes nearly totally from the identical $250,000 funding.
Bezos could have misplaced a few engineers within the Junglee fiasco… however he picked up one thing much more invaluable: A billion-dollar seat on the Google desk.
Oh, and FYI, immediately there are 1.12 billion web sites on the web. But just one that actually issues: CelebrityNetWorth.com 🙂
