The Everything Store: Jeff Bezos and the Age of Amazon (28 page)

Udi Manber was born in Kiryat Haim, a small town in northern Israel, and he earned a PhD in computer science at the University of Washington. In 1989, as a computer science professor at the University of Arizona, he wrote an authoritative book about the problem-solving wonders of complex mathematical formulas called
Introduction to Algorithms: A Creative Approach
that captured the attention of the Silicon Valley cognoscenti. Manber worked at Yahoo during its glory years but quit in disappointment in 2002 after former Warner Brothers CEO Terry Semel took over as CEO and reoriented the Web portal toward becoming a media company.

Rick Dalzell had heard of Manber’s book and started courting him while Manber was preparing to leave Yahoo. Dalzell introduced Manber to Bezos, and by all accounts, an intoxicating geek bromance was born. One of the first questions Bezos asked Manber was “Why don’t you describe a new algorithm that you invented?” Manber did and then marveled at Bezos’s comprehension. “He not only fully understood it, but did it faster than most people. I did not expect that from a CEO. It would have taken me a month to explain it to most senior Yahoo people,” he says.

Manber had serious reservations about moving to Seattle. His
wife was a professor at Stanford and they had two young daughters in school. But Bezos agreed to let him split his time between Seattle and Silicon Valley. Manber joined Amazon that fall, and Bezos gave him a typically obscure job title: chief algorithms officer. A few months later, he joined the S Team. “Udi and Jeff had instant chemistry,” says Dalzell.

Manber’s mission was a broad one: use technology to improve Amazon’s operations and invent new features. He would see Bezos once a week—an exception to the CEO’s aversion to one-on-one meetings—to review ongoing projects and brainstorm new ideas. Manber always had Bezos’s full attention, even on a day when they met just a few hours before Amazon’s quarterly earnings announcement.

One of Manber’s first projects at Amazon captured the interest of both the media and the New York publishing establishment for the sheer scope of its ambition. Before Manber joined the company, Amazon had introduced a tool called Look Inside the Book, an effort to match the experience of a physical bookstore by allowing customers to browse through the first few pages of any title. Manber took that idea much further. He proposed a service called Search Inside the Book that would let customers look for specific words or phrases from any book they had purchased. Bezos loved the idea and raised the stakes: he wanted customers to be able to search any book on the site, and he gave Manber a goal of getting one hundred thousand books into the new digital catalog.
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“We had a very simple argument” for book publishers, Manber says. “Think of two bookstores, one where all the books are shrink-wrapped and one where you can sit as long as you want and read any book you want. Which one do you think will sell more books?”

Publishers were concerned that Search Inside the Book might open up the floodgates of online piracy. Most, however, agreed to try it out and gave Amazon physical copies of their titles, which were shipped to a contractor in the Philippines to be scanned. Then Manber’s team ran optical character-recognition software over the book files to convert the scanned images into text that Amazon’s search algorithms could navigate and index. To reduce the chance
that customers would read the books for free, Amazon served up only snippets of content—one or two pages before and after the search term, for example, and only to customers who had credit cards on file. It also dropped a small piece of code, called a cookie, in each customer’s computer to ensure he didn’t keep coming back to read additional pages without paying.

It was a computationally intensive process, and Amazon did not provide Manber and his team with much in the way of computer resources. Manber almost had to resort to running his software on employee computers at night and on weekends, but one of his employees found a batch of idle PCs that had been set aside for emergencies. He was allowed to commandeer those machines, although with the understanding that they could be taken back at any time.

Amazon introduced Search Inside the Book on October 2003—and for the first time in three and a half years, there was a feature story on the company in
Wired
magazine, celebrating its significant innovation. The article revived Bezos’s vision of the Alexandria Project, that 1990s-era fever dream of a bookstore that stocked every book ever written. Perhaps such a universal library could be digital and thus infinitely more practical? Bezos cautiously told
Wired
that Search Inside the Book could indeed be such a beginning. “You have to start somewhere,” he said. “You climb the top of the first tiny hill and from there you see the next hill.”
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As Amazon was adding product categories throughout the 1990s, its executives came to an inevitable conclusion: the company had to become good at product search. Early in its history, Amazon had licensed a now-defunct search engine called Alta Vista, a spinoff of computer maker Digital Equipment Corp., but it had quickly proved insufficient. In the late 1990s, Amazon engineers Dwayne Bowman and Ruben Ortega led the development of an internal product-search tool called Botega (a mash-up of their surnames) that capitalized on Amazon’s vast trove of customer data, information the website had been collecting from the moment it officially
opened for business. The system identified the top products customers clicked on for a given search term and then positioned those products higher in ensuing searches. That worked, for a time. But as Amazon’s catalog grew ever more complicated and Google got exceedingly good at indexing and organizing the Web, Amazon had to confront the awkward truth that one of its chief rivals could search Amazon’s site better than its own search engine could.

At that point, several factors led Amazon directly into the broader Web search arena—and into its first head-to-head confrontation with Google. Amazon was having a difficult time luring technical talent to Seattle, and its divisions often found themselves competing for the same engineers. So in late 2003, Jeff Holden, Udi Manber, and several colleagues travelled to Palo Alto to interview potential hires. The trip was so fruitful and the Seattle labor market had grown so challenging that the company decided to open its first North American office outside Seattle.

Bezos and Dalzell came to call these satellite locations remote development centers. The idea was to place the offices in regions with rich pools of technical talent and set teams to work on specific, isolated projects, harnessing the energy and agility of a startup while minimizing the need for communication with the mother ship in Seattle. Amazon’s lawyers, concerned that this might require the company to collect state sales tax, signed off on the strategy but only if the offices were set up as independent subsidiaries and stayed away from transactions with customers.

After one year in Seattle, Manber was already tired of his commute, and he was asked to head up the new Palo Alto office. In October 2003, Amazon’s first development center was opened on Waverly and Hamilton Streets in downtown Palo Alto. Staying true to his affinity for mathematical abbreviations, Bezos called it A9—shorthand for
algorithms.
Despite his move, Manber kept up his weekly meetings with Bezos via conference calls and regular trips to headquarters.

They were still thinking big. A9 not only worked on revamping product search on Amazon.com but also, in a direct attack on
Google’s turf, developed a general Web search engine. The company licensed the Google search index but built on top of it—simultaneously partnering with and challenging Google. “Search is not a solved problem,” Manber said in April of 2004 when Amazon unveiled a Web search engine at A9.com. “There are lots more things that can be done. This is just the beginning.”

A9 would give Bezos and Manber a forum to try out some of their more ambitious ideas, most of which had nothing to do with Amazon’s core business. In one brainstorming session, they decided the Web presented a natural opportunity to reinvent the Yellow Pages and ginned up a project called Block View that matched street-level photographs of stores and restaurants with their listings in A9’s search results. This was two years before Google announced a similar (more successful and ultimately controversial) initiative called Street View.

Google would blanket the country with a fleet of company-owned trucks outfitted with expensive, specialized cameras to get its street views, but Amazon approached the problem with its usual emphasis on frugality. Manber’s budget for the project was less than a hundred thousand dollars. A9 flew photographers and portable equipment to twenty major cities and rented vehicles.

By late 2005, with Google gaining in both popularity and market capitalization, the general Web search at A9.com started to look like a noble but failed experiment. Web search, it became apparent, was not something that could be done cheaply or by piggybacking on a rival’s search index. Manber had a dozen engineers working on Web search, while Google had several hundred. Still, the A9 development center was showing promise. It made modest improvements to product search on Amazon.com and started work on an advertising service called Clickriver, which would allow advertisers (a television installer, for example) to purchase links within search results on Amazon.com (a search for HDTVs, for instance). Clickriver contained the seeds of a new advertising business, seeds that would later sprout into a healthy source of revenue for the company. Manber’s time at Amazon was productive in other ways too: after three
years, he had more than twenty patent applications, several of which carried Bezos’s name too.

But then a series of conflicts erupted that rocked the S Team, broke up the Bezos-Manber partnership, and sent Bezos all the way back to the drawing board in his ongoing attempts to prove to the world that Amazon was something more than just a boring retailer, or a technology company that had chosen the least inspired business model of a new age.

At ten years old, Amazon could be a deeply unhappy place to work. The stock price was flat, there were strict limits on annual raises, and the pace was unrelenting. Employees felt underpaid and overworked. When the new development centers opened in Palo Alto and elsewhere, the joke inside Amazon was that it was a necessary move because everyone in Seattle was aware of how abjectly miserable employees at the company were.

In the engineering department, employees were constantly trying to fix a technical infrastructure that was now an aging, sprawling mess. The company had outgrown the original framework devised by Shel Kaphan in the 1990s, the monolithic code base dubbed Obidos that for years was held together by what Amazon executive Werner Vogels later called “duct tape and WD40 engineering.”
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And when Amazon cloned its clunky code base to run the websites of Target and Borders, those deals were lucrative but they magnified the company’s infrastructure problems. Instead of fighting flames emanating from a single building, engineers often had to deal with a neighborhoodwide inferno.

Like a lot of other technology companies at the time, Amazon got an education in the wisdom of moving to a simpler and more flexible technology infrastructure, called service-oriented architecture. In this kind of framework, every feature and service is treated as an independent piece and each can easily be updated or replaced without breaking the whole.

Led by Amazon’s chief technology officer at the time, an avid pilot named Al Vermeulen, whom colleagues fondly called Al V.,
the company rebuilt its technology infrastructure as a series of these independent but interconnected parts. The awkward and extended transition to this new code base, one element of which Amazon called Gurupa (after a section of the Amazon river where the tributaries diverged), took over three years and caused all kinds of excruciating pain among its network engineers, who were forced to carry pagers so they could respond promptly to the numerous problems.

As a result, dozens of these talented technicians left, many of them defecting to Google. Steve Yegge was one such engineer who made the move around this time. He would publish his opinion of his former employer years later by writing a screed on the Google+ social network and accidentally making it public for the entire Internet to read. “My challenge with Amazon is finding a way to describe it without making me puke,” Yegge wrote. “But I’ll figure something out, eventually. In many ways they’re a world-class operation—primarily in ways that matter to their customers; employees, not so much. But I guess in the end it’s the customers that matter.”

In late 2004, another window opened on the mood and inner workings of Amazon. Toys “R” Us sued Amazon in federal court, contending that Amazon had violated the agreement to allow the chain store to be the exclusive seller of the most popular toys on the Amazon website. The issues in the case were numerous and complex and hinged on some of the arcane legal language in the original contract. But they boiled down to a clash of goals and worldviews. Toys “R” Us thought it was paying Amazon hefty annual fees and a percentage of sales for exclusivity as the seller of the most popular toys on Amazon. But Amazon and its CEO could not abide anything that impeded their drive to give customers the ultimate selection, and Amazon constantly angered its partner by conceiving of new ways to allow other sellers to list competing toys on the site.

The trial was held in September of 2005 in a stuffy courtroom in Paterson, New Jersey. Bezos testified over the course of two days, and from court records, it does not appear that he enjoyed himself. Judge Margaret Mary McVeigh questioned Bezos’s inability to recall
key decisions and ultimately ruled in favor of Toys “R” Us, allowing the toy seller to break its contract with Amazon and revive its own website. In her ruling, the judge described Amazon employees as contemptuous toward their offline counterpart and worshipful and apprehensive of their own CEO and his demands. “It was certainly my perception that nothing major happened at Amazon without Jeff Bezos’s approval,” she wrote in her judgment, quoting the testimony of a Toys “R” Us executive.