An Amazon In Paris
Champagne glasses clinked merrily along the banks of the Seine as Jeff Bezos worked to make a splash that was huge, yet somehow low key. The founder of Amazon.com knew it would be all too easy for the world's biggest, brashest bookseller to offend the French. After all, Paris had greeted even Mickey Mouse as an Ugly American. So Bezos planned the bash for Amazon's launch in France carefully. He rented 11 barges, but moored them respectfully in the shadow of the spanking-new national library. He toasted Paris as the most beautiful city in the world, promised to respect French culture and wooed the local Internet glitterati by doing the official countdown in carefully rehearsed French. Yet between toasts at the party last Thursday night, Bezos did not downplay his ambition to make Amazon a place to shop for "anything--and when I say anything, I mean anything--on the Net at any time."
Bezos has been the quintessentially aggressive American Netpreneur, losing money faster than he makes it in order to build a dominant global brand. Yet France may prove to be the last Amazon conquest for some time. Since the market shocks of April, Amazon stock has fallen by more than 60 percent to $42 a share. Mounting losses and debts (now $1.5 billion) have raised increasingly tough questions about the Seattle company's relentless expansion. From its 1995 start in books, Amazon pushed into music and videos, and more recently into riskier ventures like cars, garden tools and furniture. Bezos first set his sights on Europe two years ago, launching Amazon Web sites in Germany and Britain. Amazon quickly became the No. 1 online retailer in both countries, but France could prove much tougher to crack. Now that Bezos has a beachhead in the three major European markets, says Morgan Stanley analyst Michael Steib, he is shifting focus from expansion to making his conquests pay.
The French launch was delayed two years as Bezos studied the treacherous business terrain and sought a way in. Back in 1981 Minister of Culture Jack Lang, a voluble critic of American cultural imperialism, pushed through a law designed to protect small booksellers and publishers. It prohibits book discounts of more than 5 percent, and to this day the French still take the time to buy their books from local brick-and-mortar stores. Lang's law will also impede Amazon, which wields deep discounts as its competitive edge. Says Gartner Group analyst Alexander Drobik, "I have to assume that Amazon people are betting that Lang's law won't last."
Bezos insists he can compete under French rules by providing better service and selection. Amazon's French site offers books, videos, compact discs and DVD movies--its widest inaugural offerings yet. Amazon also spent months poaching French-speaking staff from direct competitors like FNAC, currently the largest bookstore and online book retailer in France. Amazon lured recruits in part by offering "substantial stock options," which many Frenchmen still disdain as a crass tool of American capitalism. And that's not the only threat they see to French business etiquette. In a recent report, Goldman Sachs figures that Amazon's 24-hour service will be a particularly big advantage in France, where the 35-hour workweek has made some companies cut back their working hours, and most stores are closed on Sundays.
Amazon figures any cultural backlash won't last. The French embrace new technology as warmly as tradition, and had their own homegrown dial-up network, the Minitel, before there was an Internet. Nowhere in Europe is the number of Internet users growing as fast as in France, where it quadrupled last year to more than 12 million. By 2005, Goldman Sachs predicts, the French will account for 14 percent of a $175 billion e-retail market in Europe. Amazon senior VP Diego Piacentini says he's sure online commerce "will boom" in France, someday.
Competitors have been gearing up for Amazon's arrival. Responding to its inaugural offer of free 48-hour delivery, FNAC promised free delivery within 24 hours. "We are not going to make it any easier for them," says Patrice Magnard, president of A La Page, an e-commerce subsidiary of Wanadoo, France Telecom's Internet branch. A La Page plans to launch an improved Web site this week, and has set up a system that allows small booksellers to restock online and earn commissions on Web sales as well. All that is unsettling to Emmanuel Delhomme, owner of a 20-year-old Paris bookstore, Livre-Sterling. Surrounded by stacks of new and used books to which he has taped his personal comments, Delhomme says customers come back because they trust his recommendations. Entrepreneurs like Bezos, sniffs Delhomme, "come here with their blinking screens, but they don't understand that books require a certain environment." After Amazon, though, the French business environment will never be the same.
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Scott Johnson was named Africa Bureau Chief in April 2007, after serving two years as Baghdad Bureau Chief since the spring of 2004. In the summer of 2007, Johnson co-authored, with Sharon Begley, Newsweek's July cover story "Slaughter in the Jungle," about a spate of rare mountain gorilla killings in the Democratic Republic of Congo. He has also been covering, for the magazine and Newsweek's Web site, the economic collapse of Zimbabwe, health initiatives across the continent and the rise of China in Africa.
Prior to coming to Africa, Johnson worked on assignment in Iraq and elsewhere in the Middle East. He was on assignment in Iraq during the invasion and returned several times during 2002 and 2003 to report on the post-invasion occupation. During his two years as Baghdad bureau chief, Johnson covered the rise of Iraq's sectarian war, the trial and execution of Saddam Hussein and the American military's attempt to quell the insurgency in places like Ramadi and Baghdad. He contributed exclusive reporting on the growth of death squads in Baghdad, Iran's growing influence in Iraq and American military and political developments in Baghdad.
Before coming to Iraq, Johnson covered the war in Afghanistan from October 2001 to April 2002, reporting on the fall of the Taliban from the front lines of Kunduz and Taloqan. Later on, Johnson traveled across Afghanistan reporting on the hunt for Al Qaeda and the resurgence of the Taliban as American forces drew down its presence. In both Iraq and Afghanistan, Johnson has done exclusive war reporting, often under fire and in the most dangerous situations. In Iraq, he covered the hunt for Saddam Hussein with exclusive access to the 3rd Armored Cavalry Regiment and the 4th Infantry Division. He also contributed extensive exclusive reporting early in 2003 on the nascent Iraqi insurgency from Fallujah.
In between posts to Baghdad, Johnson was provisionally based in Mexico City from 2002 to 2006. When not covering the war, Johnson reported on political and economic developments across Latin America. In 2002 he authored a Newsweek International cover story on the rise of China in Mexico. In 2004 he received an Overseas Press Club Honorable Mention for "Best Reporting in any Medium on Latin America" for "Latin America Lags Behind," about economic trends across the hemisphere. In Latin America, Johnson also covered violence along the U.S-Mexico border, the creation of Mexico's freedom of information act and an experimental drug treatment center in Peru.
Previously, Johnson reported for Newsweek out of Paris, France, since October 1998. During that time, he has reported on many of the biggest stories to come out of the continent, including Europe's mad cow scare, the backlash against globalization, and Newsweek's military coverage of the Kosovo war out of southern Italy. He has also developed in-depth investigative pieces from Europe, and he contributed heavily to Newsweek's worldwide report on pedophilia and the Internet. He has also covered North Africa, covering terrorism pre-and-post 9/11.
Johnson is a frequent contributor to radio, most recently from Iraq where he has interviewed on NPR, The World and other national stations, and he has been seen on MSNBC, Fox and CNN. In addition to Newsweek, his writing has appeared in Le Courrier International and Letras Libres. Johnson was also part of the Iraq team that contributed to Newsweek's 2003 National Magazine Award.
Johnson is a 1996 graduate of the University of Washington, where he received double degrees in Comparative Literature and Comparative History of Ideas. Postgraduate work included Arabic language and Middle Eastern Studies in Fes, Morocco. He is a member of the Anglo-American Press Association in Paris.
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