In the who’s who of the rich and famous, Bill Gates is a household name – up there with Steve Jobs or Oprah Winfrey. How about Jeff Bezos? While perhaps not as well-known as Gates, Bezos is certainly on his way. For a brief time Thursday, the Amazon founder, and CEO was the wealthiest man on Earth, edging out his counterpart from Microsoft until a rough quarterly earnings report caused shares of Amazon to retreat from their noon-time highs.
This competition is tracked daily by the Bloomberg Billionaires Index, where Bezos’s brief lead made headlines across the business world. The two men are at opposite ends of their careers, with Gates winding down his wealth through philanthropy while Bezos aggressively grows and leads the world’s largest internet retailer. Roughly half of Gates’s money is held in cash while less than 3% of Bezos’s fortune sits in a savings account – almost 95% is Amazon stock. Relatively small movements in the price can swing his fortune up or down by billions, hence Thursday’s drama.
Step back from the details of where each man’s wealth is held and look instead at where each man’s money came from, and you will see a similarly distinct comparison. Microsoft made its billions mainly through taking advantage of its consumers – a captive audience with no comparable alternative to the tech company’s monopolistic operating systems and software. Indeed, Gates’s company frequently joined the ranks of America’s most hated companies back in the 80s and 90s. Even today, a copy of Windows 10 Home will set you back $119.99 when purchased directly from Microsoft’s website. The fact that this same piece of software is available through Amazon for $10 less (shipped on a physical USB drive) speaks volumes to the different philosophies of these companies, and to the broader economy as a whole.
You see, Microsoft made its money fleecing the consumer. Amazon decided to go the opposite direction and make the customer king. Anyone who enjoys a Prime subscription or has dealt with the fantastic Amazon return policy can attest to this. However, nothing in life comes free. So what did Amazon sacrifice on the road to market dominance? Put bluntly; Amazon decided to fleece their employees. The BBC launched an undercover investigation that found horrendous working conditions for Amazon employees. In a New York Times exclusive, reporters interviewed over a hundred current and former Amazon employees and discovered a brutal work environment. In a 2017 “Best Places to Work” list from Business Insider, Microsoft comes in at #37, while on Indeed.com’s similar list they rank in at #22. Amazon did not make the cut for either list.
Bill Gates is probably too busy deciding which special interest group to fund and Jeff Bezos is far too engaged in growing his already gigantic company to give these things much thought, but they are worth considering. Years ago, the unbridled marketplace of capitalism granted the largest personal fortune in the world to a man who flagrantly took advantage of the consumer while treating his employees well. Today, the new king of cash will have earned his wealth through the opposite strategy. Is this the sign of a larger trend? Oh well, at least we have free two-day shipping.
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