Bezos did that I thought was very smart was that he ran us through his organization
and others through ours. He used us, at least for the first few years, as a
think tank in some sense—a live and breathing example of how else they could
do things.
Alexa’s major value in the first year of its being acquired by Amazon was to
take some of the lessons that we had learned of how to do things much cheaper
than they had. They had gone through an explosive growth phase, and they
were spending $100 million a year on hardware. We couldn’t believe it. Here
was this little company that had been living its whole life, and we hadn’t spent
$10 million.
So Jeff said, “OK, Brewster, you know how to do this stuff cheaply. What
should we do?” I said, “You should stop buying hardware. You’ve bought
plenty.” He said, “OK, we’re going to stop buying hardware.” It caused enormous
pain to their organization, but it was the right thing to do. They needed to
become profitable. They learned a lot of lessons from this. They could use an
outsider that was still inside. We were not as independent as a Bain Consultants
or something like that, but we knew what we were talking about because we
had actually built stuff. We dropped the cost of their Internet connections by
90 percent just by saying that you can go and negotiate deals in this and this
way. So we paid for the acquisition of our company in the first year just by the
capital costs that they saved.
Brewster Kahle 279
AOL took our ideas and put them into their bloodstream and dispersed
us—and properly, I’d say. Amazon kept it to the side and kept it moving and
generating new ideas. Amazon spent the time; we had basically a full-day
meeting with the top execs of Amazon every month. It was just an outrageous
amount of time given to us, but that was because Jeff Bezos said “New ideas are
going to come from these guys.”

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