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What Happens When Billionaires Battle Gossipmongers?

9 February 2019

From The Washington Post:

Both men have gobs of money.

They didn’t make it the old-fashioned way, with steel and brick, but instead with big, disruptive, life-changing ideas.

After they got rich, after they’d achieved a titan status imaginable only in the digital age, that’s when the tabloids came for them.

And that’s when they went to war.

Theirs is a tale of two billionaires — Jeffrey P. Bezos of Amazon.com fame and Peter Thiel, who birthed PayPal. So different in style and temperament, the two men have each found their sex lives splashed in public against their wills in separate tabloid “gotchas.” But they have tangled with the merchants of salacity in completely opposite ways.

Bezos, who also owns The Washington Post, blasted his disdain into the maw of the Internet, essentially delivering the equivalent of a lawyer’s opening statement with the entire planet sitting in the jury box. Thiel operated in sotto voce fashion, secretly maneuvering to exact revenge and not surfacing until he had triumphed.

Bezos is locked in a conflict with the National Enquirer, which last month published intimate text messages he’d sent to Lauren Sanchez, with whom he was having an extramarital affair, and photos of them together. In a Medium post Thursday, Bezos accused the supermarket tabloid, which is owned by American Media Inc., of blackmail and extortion for threatening to publish additional intimate photographs if he and his representatives did not agree to stop their investigation of the how the material was obtained. Bezos suggested that the tabloid, whose parent company is run by a friend of President Trump, had political motives to run stories about his affair. Trump has frequently attacked Bezos over his ownership of The Post.

Thiel’s battle took place against Gawker, the sassy and sometimes raunchy website that earned his eternal enmity by outing him as gay in 2007. He got back at the site in 2016 when he surreptitiously funded a successful lawsuit by Terry Bollea, better known as the wrestler Hulk Hogan, over the site’s 2012 publication of a tape depicting Bollea having sex. Gawker went out of business after a jury awarded $140 million in damages.

“They are two fundamentally different approaches to similar problems,” said Ryan Holiday, author of “Conspiracy: Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue.”

When Thiel’s involvement in the Bollea case was revealed, Bezos was less than enthusiastic about his fellow tech titan’s actions. At a conference in June 2016, Bezos was asked about the Thiel-Gawker slugfest. He responded with an old saying: “Seek revenge and you should dig two graves, one for yourself.”

“Is that really how you want to spend your time?” Bezos went on to say. “As a public figure, the best defense to speech that you don’t like is to develop a thick skin.”

Those remarks came to mind for Bezos watchers after his posting on Medium, a self-publishing website.

. . . .

In the first paragraph of Bezos’s post, he frames his decision to publicize letters he had received from the National Enquirer as evidence of wrongdoing — a step beyond berating the tabloid for publishing details of his private life.

“Rather than capitulate to extortion and blackmail, I’ve decided to publish exactly what they sent me, despite the personal cost and embarrassment they threaten,” Bezos wrote.

The saga is drenched in a hailstorm of theories and counter-theories. Bezos’s team, headed by famed security consultant Gavin de Becker, has cast a suspicious eye on Michael Sanchez regarding the leak of the texts and photos. Sanchez is the brother of Bezos’s girlfriend, former TV host Lauren Sanchez. Michael Sanchez is a Trump supporter, and his potential involvement is part of a theory that the leak is a political hit.

. . . .

Both Sanchez and de Becker have, at times, explored the possibility that the text messages were obtained by a foreign government or a business competitor, according to interviews and a Post review of emails and text messages. Sanchez has even posited that Israel’s Mossad, British intelligence or the U.S. National Security Agency might be involved. (De Becker ultimately concluded that hacking was not involved.)

Link to the rest at The Washington Post

PG hopes he is wrong, but, more than once, he has had the feeling that, a few years down the road, we may look back on this series of events as a turning point for Amazon.

From the beginnings of Amazon, Bezos has put his distinctive personal stamp on the company in the same way that Steve Jobs and Bill Gates built very large companies which seemed to be reflections of their very different personalities.

Jobs, of course, was forced to give up his management position due to cancer while Gates retired from Microsoft in an orderly fashion, but neither company has been the same since the person with the dominant vision that drove its tremendous growth departed.

For PG, Microsoft has become the most boring large tech company in the world. Windows continues. MS Office continues. Like a power utility company, each relies primarily upon its quasi-monopoly position to keep the dollars rolling in.

New Microsoft products seem to be lame derivatives of products originated elsewhere. Microsoft Surface is an iPad wannabe. Why does Edge even exist? MS is into producing products and services that are derivative of its own ancient good ideas or the ideas of others.

On the other hand, Apple is much less boring because post-Jobs management has made the mistake of believing it can continue to raise prices without doing anything really new. Now it’s in the process of cutting prices on its iPhones and iPads to stem a significant decline in sales and the new ideas in mobile phones are all coming out of China.

So what do we make of Bezos and Amazon?

Has Bezos lost his mind? He’s supposed to be reliably brilliant.

The year is 2019 and intelligent people don’t take nude selfies and text them to other people. That’s a mistake that any intelligent sixteen-year-old who wants to get into a good college will not make.

Additionally, intelligent people haven’t gotten into big fights with The National Enquirer for decades. Bezos already bought The Washington Post. He should have purchased The National Enquirer and fired everybody he didn’t like.

When he spent a lot of his time in court, PG had to talk more than one client out of suing someone because the collateral damage to the client’s reputation would far exceed any monetary benefit the client would derive. On such occasions, he would sometimes quote George Bernard Shaw.

I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it.

~ George Bernard Shaw

Amazon, PG's Thoughts (such as they are)

31 Comments to “What Happens When Billionaires Battle Gossipmongers?”

  1. Yeah, I saw in on The Register:

    https://www.theregister.co.uk/2019/02/08/bezos_national_enquirer_latest/

    The parts I found amusing were:

    “Bezos caused a major stir on Thursday after he published online emails that appeared to show AMI executives threatening to print highly embarrassing photographs of the tech billionaire unless his investigation into the publishing company’s close ties with President Trump’s team, and links with Saudi Arabia, was dropped.”

    And:

    “In December, AMI big cheese David Pecker was apparently granted legal immunity in exchange for helping American prosecutors send down Trump lawyer Michael Cohen, who admitted funneling hush money to two women who claimed they had affairs with Donald.

    Bezos’ letter on Medium has reportedly come to the attention of the architects of that deal within the Dept of Justice, and could invalidate that immunity offer. Given that AMI has already admitted, under immunity, it effectively gave $150,000 hush money to a woman who accused Trump of cheating on his wife with her, the loss of any immunity could be catastrophic.”

    So David Pecker might have been doing all this for political reasons (being a big Trump fan and all), and might now have the DoJ dragging him back into court.

    And I loved the tail of their tale:

    “PS: Yes, of course the National Enquirer is hosted by Amazon Web Services…”

    Maybe Jeff will cancel their service and refund their payments – Pecker might need to pay his lawyers with it.

  2. AMI’s strategy was somewhat inept. They should have anticipated that threatening the world’s richest man, and one of the boldest in business, would not be the same as threatening a politician or a lesser businessman.

    If I were Bezos, I’d hold them to their AWS contracts.

  3. “Jobs, of course, was forced to give up his management position due to cancer while Gates retired from Microsoft in an orderly fashion, but neither company has been the same since the person with the dominant vision that drove its tremendous growth departed. ”

    You might might want to take another look.
    Microsoft 3.0 is on the ascendancy:
    https://www.cnet.com/news/this-is-not-your-fathers-microsoft/

  4. I’ve hated the Enquirer for 40 years yet I’ve had to glance at it every time I go grocery shopping. It’s the best example of stupid America. I hope Bezos gets rid of that trashy newspaper and I could care less about his own collateral damage.

  5. “Publish and be damned!” — The Duke of Wellington, 1824. That’s what I’d quote if something like this happened to me, not that it would. I’m way too boring.

    You’d be surprised how many smart people get caught out with texts and pics. It happened to an acquaintance whose jerk of a son broke into his phone and shared the contents with others. Some people still believe in the illusion of privacy in this world.

  6. I’m surprised that you haven’t covered the Amazon story about them cheating their drivers out of tips.

    https://the-digital-reader.com/2019/02/07/mazon-instacart-and-doordash-all-screw-delivery-drivers-out-of-their-tips/

    • Yeah, I found that interesting since days before I saw this headline:

      “After Facing Class-Action Lawsuit, Instacart CEO Says It’s Taking Steps To Ensure Tips Are Counted Separately From Wages”

      “”After launching our new earnings structure this past October, we noticed that there were small batches where shoppers weren’t earning enough for their time,” Mehta wrote. “To help with this, we instituted a $10 floor on earnings, inclusive of tips, for all batches. This meant that when Instacart’s payment and the customer tip at checkout was below $10, Instacart supplemented the difference. While our intention was to increase the guaranteed payment for small orders, we understand that the inclusion of tips as a part of this guarantee was misguided. We apologize for taking this approach.” For the shoppers who were subject that approach, Instacart says it will retroactively pay people whose tips were included in payment minimums.”

      So now I’m wondering how many other services are doing the same? (I mean besides those paying below minimum wage that expect tips to cover the rest …)

    • Am I the only one who doesn’t tip the UPS/Fedex/Amazon delivery person?

      99% of the time, I don’t even see them when they drop off a package.

      • Other than days before Xmas none of them even ring the bell or knock, I’d open the door to go check the mail and there’s a box waiting to be noticed …

    • Yeah:

      “American Media believes fervently that it acted lawfully in the reporting of the story of Mr. Bezos,” the company said in a statement. “Nonetheless, in light of the nature of the allegations published by Mr. Bezos, the board has convened and determined that it should promptly and thoroughly investigate the claims. Upon completion of that investigation, the board will take whatever appropriate action is necessary.”

      AMI wants to investigate itself and determine if they’ve actually done anything wrong. Somehow I don’t expect them to dig very deep for the truth, no more than they do for what goes in that rag …

  7. We can all navel gaze with the best of them, but I’m a bigger fan of Occam’s razor than I am of GBS quotes. The simplest explanation is often the right one…

    A. Bezos did something stupid.
    B. AWI threatened him to stop him from doing something.
    C. He said, “screw you, Pecker-head”.

    Just about every time someone has tried to tell Bezos he can’t do something, he has gone ahead and doubled-down. Stupidity, stubbornness, temper or principle, it’s hard to tell why your “dirty pigs” do anything in the mud, just that they do, and as GBS got right, some pigs prefer wrestling to staying clean.

    But to me, it seems like they pissed him off and to prevent them from having any sort of scoop, he’s turned it on them to say “Go ahead and publish, but you’ll look like you’re retaliating, not being journalists”.

    P.

    • “A. Bezos did something stupid.”

      Okay, we can go with that.

      “B. AWI threatened him to stop him from doing something.”

      Actually they threatened him to try and stop him from digging into something stupid ‘they’ may have done helping Trump. And they’d already been caught doing other stupid things for Trump and friends.

      “C. He said, “screw you, Pecker-head”.”

      Yup!

  8. I see this as more than about Bezos trying to avoid embarrassment. The blackmail was about trying to force the Washington Post to declare that AMI/National Enquirer is NOT a politically motivated/prejudiced company/publication.

    I believe that Bezos suspects that either Pecker (owner of AMI) is trying to protect his buddy Trump or that Trump put him up to it. And Bezos, as owner of the Washington Post, knows that part of AMI’s immunity agreement with the Special Counsel office was to avoid violating the law.

    So, I think Bezos suspects this is fundamentally politically motivated (and I think he’s right), considering the attacks he has endured from Trump … so he’s like, “I’m the world’s richest man, I am going to take these corrupt clowns down.”

    If I had that kind of money, I would do exactly the same thing. It’s not how much it costs … it is about humiliating AMI, Pecker and Trump.

    • The National Enquirer is a propaganda rag, leaning to the ideological Right (when it has any connection with reality, that is), which will do anything, ethical or not, truthful or not, to take down the enemies of its owner’s ideology.

      The Washington Post is a propaganda rag, leaning to the ideological Left (when it has any connection with reality, that is), which will do anything, ethical or not, truthful or not, to take down the enemies of its owner’s ideology.

      To me, the only appropriate quotation here is “A plague o’ both your houses!”

  9. PG hopes he is wrong, but, more than once, he has had the feeling that, a few years down the road, we may look back on this series of events as a turning point for Amazon.

    I tend to agree, but I see the turning point as Bezos’ entry into the political arena.

  10. I wish I had a woman to text pictures of my junk to. When will I start living life and stop watching from the sidelines? When?!

  11. When it comes to blackmail (and that does look very much like blackmail if you read the emails), I believe the maxim that you never give into it. The blackmail will always be worse than what they can reveal, and they will always want more.

    Bezos is not going to get a lot of sympathy, but I suspect he doesn’t care. He spiked The Enquirer’s guns since they no longer have anything that will shock.

    • the Enquirer has the advantage. All they have to do is follow the Washington Post formula:

      Amazon sources say Mr. Bezos…

  12. Bezos is moving on with Blue Horizons. Maybe.

  13. Taking that kind of selfie has nothing to do with brain power. There are plenty of smart people who have done it. It has to do with your level of risk tolerance, and how much you value the perceived reward of the action.

    Anyone who thinks Jeff Bezos doesn’t have one of the highest risk tolerances in the world hasn’t been paying attention. I’m sure he understood what could happen, and the likelihood of it happening. That risk doesn’t scare him off of things the way it would a normal person.

    And Jacked Bezos has probably increased his testosterone level quite a bit in the past five years. That’s what happens when you increase muscle mass, even if you do it naturally. That also alters the equation in ways that don’t equal pure “smart” or “stupid”, which is an indicator of your ability to process and comprehend information.

    Bezos is undoubtedly smarter than a lot of people who wouldn’t be “dumb” enough to engage in this behavior. They just have a lower tolerance for risk than he does.

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