Jeff Bezos

If the internet was the new rock and roll, Jeff Bezos - the boss of Amazon.com - was its Elvis.

Unlike many of the dotcom legends, Mr Bezos is still with us - and he was spotted in London.

He was here to launch the company's latest internet service - and to celebrate that rare dotcom achievement, a profit.

Our business correspondent Paul Mason, who has had no luck so far interviewing Elvis, managed to find Mr Bezos in the dotcom version of Graceland, the exclusive Home House club.

Watch the interview

PAUL MASON:
The internet was supposed to change the world forever. Traditional shops would be blown away as e-commerce moved everything online. But in the end, it was the dotcom companies that were blown away. Jeff Bezos is the ultimate dotcom survivor. He virtually invented online retail and shot to celebrity status overnight. Amazon.com, the company he founded, has survived and actually made a profit last Christmas. And the strategy gurus love him.

MARK PAGE:
(Booz Allen Hamilton)
Amazon's importance is that it's successfully built a business around the internet that is making money. There's been scepticism in the last year or two that it could be done. It is important in showing not everything was hype, not everything was a failure.

PAUL MASON:
Amazon is now selling a billion dollars worth of books, CDs and other stuff every three months, but it's still not out of the woods. It's $2 billion in debt, its interest payments are eye-watering and its share price has fallen from $100 to $16 in just 3 years but the boss is not downhearted.

JEFF BEZOS:
Our focus on generating significant meaningful cash flow in our business continues and has a lot to do with growth. Fortunately the company is growing rapidly even in what is considered by most to be a weak economy.

PAUL MASON:
Five million profit on a billion turnover in just 3 months, it is wafer thin, how much of it was down to Jeff Bezos and how much due to Harry Potter?

JEFF BEZOS:
Well, for sure, we worshipped at the feet at JK Rowling. But if you look at our business, these fixed costs require that we have a certain amount of skill, once you get to that breakeven point, skill beyond that starts to fall to the bottom line.

PAUL MASON:
It is all short of the promise of the dotcom revolution.

BILL WHYMAN:
(Precursor Group)
Amazon was named Amazon because they wanted it to be big and profitable and to change the nature of retailing. Years into this experiment, the return on equity is still miserable and at the end of the day Amazon may not have that much better profitability than the best retailers that we have today.

PAUL MASON:
The Internet was supposed to be about new business models, limitless growth, the death of the stuffy retail empires that had ignored their customers for decades, so why has Amazon fail today live up to the hype?

JEFF BEZOS:
You over-glamourise our vision at the beginning. We did not see ourselves as hi-tech visionaries back in 1995. It took four months and over 60 meetings to raise the initial investment capital, this was a time when people hadn't really heard of the internet and we were trying to build, not some hi-tech company but something that genuinely served customers. That is what we've done and that is a big difference between what we did and what some of the other dotcom companies that are no longer with us did. They weren't really to build companies, they were trying to build stocks. That is not what we have done. We have built something real.

PAUL MASON:
Yet you still can't turn a consistent profit on this operation?

JEFF BEZOS:
I don't expect us to be able to right now. I am happy we are investing in this company. We are on our plan and we need a certain amount of scale and the good news is we are on track to get that scale.

PAUL MASON:
As they struggled to make the new economy a reality, the dotcom pioneers managed to crash the stock market. The wipe out threatened venerable companies as well as dotcom start-ups, so looking back don't the negatives outweigh the positives?

JEFF BEZOS:
Our stock has gone up by more than a factor of ten. In a time when the stock market has been flat to downWe are incredibly proud of our long-term stock performance. We have paid major dividends for investors over the past five years. The problem is our stock went from $1.50 to $15 via $100 but that was the bubble and we can't accept credit or blame for it.

PAUL MASON:
You can't accept blame at all, you played no part in the idea that that stock was worth $100?

JEFF BEZOS:
I will leave that for others to decide but we were telling people along the way that small investors should not invest in that stock because they should leave it to the professionals.

PAUL MASON:
Amazon sees the path to profit as selling evermore varied products on its website, including second hand goods. It is an on-line version of pile it high, sell it cheap, a strategy that generally means lower profit margins, can it really take the internet's most iconic company into the future?

JEFF BEZOS:
I hope that five years from now, we will have expanded to an even larger set of categories and we will have filled out the product categories that we sell here in the UK. That we will have opened in a small number of new countries and that the customer experience, in every dimension, selection, lower prices, availability, better discovery features, so you can find what you are looking for quickly and easily, that every dimension of the customer experience will be better five years from now.

PAUL MASON:
Will you still be a low margin company and will you still be a high debt company?

JEFF BEZOS:
Yes, we are endorsing the low margin approach. We are free cash flow positive at this point, even on the amount of interest that we pay. It is a perfectly manageable amount of debt for a company of our size.

PAUL MASON:
It is a tough time to be a boss in America, corporate scandals have changed the image of the Chief Executive from A list celebrity to public enemy number one. How big a change in mind set is all this causing, are we going to get a gentler kind of capitalism as a result?

JEFF BEZOS:
It's a tragedy when you look at some of these high-profile cases because I personally believe that almost all of corporations round the world are honest, they are trying to be straightforward and there is the fraction of companies that are kind of, at the worst possible time when the economy is weak, taking confidence out of the system. That is unfortunate.

PAUL MASON:
You don't see there is any need for structural or cultural change within the corporate system?

JEFF BEZOS:
I don't know whether there is or not. I I don't know what the magic bullet answer is.

PAUL MASON:
Faced with everything that is going on in the world is the Amazon boss planning any kind of economic recovery in the short to medium term?

JEFF BEZOS:
It is very difficult to forecast at all. Even in the most stable of times and landscape is often littered with the bodies of people who try. A more successful approach is to plan for a multitude of scenarios so you have plans in different scenarios. In a high, medium and low growth scenario. So you think through a variety of plans for the different scenarios which acknowledges that it is difficult to forecast. Companies that fool themselves into thinking they do have a crystal ball are often very fragile.

PAUL MASON:
Most economies are predicting low growth, what is Amazon's strategy if that is the climate you have to operate within?

JEFF BEZOS:
We are fortunate because even in this weak economy, we are growing rapidly. What we don't know is if the economy was stronger how much faster we would be growing. I am pleased with the position that we are in right now.

PAUL MASON:
This maybe the ultimate achievement of those dotcoms that survive. Instead of kicking off endless economic expansion, they will simply prove better equipped to survive the downturn they helped create.

This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.