ANALYSIS: CLIENT PROFILE - Control-driven Amazon measures its message. Expectations for the country's most famous e-tailer have deflated with stock prices. Aimee Grove examines information management under company CEO Jeff Bezos

Few companies embody the promise and the pitfalls of the so-called 'New Economy' as well as Amazon.com. Launched in 1995, the e-commerce pioneer has enjoyed an exhilarating ride, cheered on by people from Wall Street to Main Street.

Few companies embody the promise and the pitfalls of the so-called 'New Economy' as well as Amazon.com. Launched in 1995, the e-commerce pioneer has enjoyed an exhilarating ride, cheered on by people from Wall Street to Main Street.

Few companies embody the promise and the pitfalls of the so-called 'New Economy' as well as Amazon.com. Launched in 1995, the e-commerce pioneer has enjoyed an exhilarating ride, cheered on by people from Wall Street to Main Street.

CEO Jeff Bezos eagerly embraced the role of Internet business icon and pop culture superhero, appearing on everything from Oprah to the cover of Time as 1999's 'Person of the Year.' In fact, were PRWeek to profile Amazon just a year ago, it would have been hard to give the Seattle books and music giant less than an A-plus for its PR.

What a difference a year - and a stock market tumble - makes. Today, Amazon has fallen from its perch, and the company's PR troops are spending more time fighting fires than igniting hype. Last month when officials announced the layoff of 1,300 people, they demonstrated PR savvy by offering additional severance to displaced workers who agreed not to talk to reporters.

In the 18 months that preceded the layoffs, Amazon had amassed a dollars 2.1 billion debt as the company expanded from an online book-peddler to a virtual mall with toys, DVDs and consumer electronics. At the time of the layoffs, the stock price had plunged to a dismal dollars 19, down from a 52-week high of dollars 91.51.

Amazon's most vocal critic is Lehman Brothers' analyst Ravi Suria. He was quoted in The New York Times, saying, 'In 1999 Amazon was a growth story. In 2000 it became a credit story, and in 2001 it's a distress story.'

The company has been showered with bad publicity during the past year, first when its warehouse workers threatened to unionize, and then with concerns over consumer privacy and criticism of affiliate marketing patents.

So what are communications staffers doing about it? According to Bill Curry, the most senior in-house PR executive, they are combating misperceptions surrounding reasons for the company's lack of profits. 'It's just not the case that we are throwing money around. We have a very strong cash balance, and we are in the investment phase of our life cycle,' he says.

Not surprisingly, Curry, a reporter for the Los Angeles Times and The Washington Post before he joined Amazon in 1999, believes most of the media have focused too intently on Amazon's falling stock price. 'There's much more to talk about than that,' he points out. 'Our sales are way up, our customer base grew by more than 12 million this year, and our gross profit margin is up 140%.'

Curry stuck to the company line, declining to disclose strategy, tactics or specific programs. Controlled access - to both executives and information - and strictly controlled messaging are central to the PR approach.



Journalists rail against fire wall

Red Herring senior writer Justin Hibberd says he stopped trying to cover Amazon because, 'no one ever returned my calls.'

Of a recent Business Week article, he says, 'You could tell that Bezos' remarks were completely scripted. The story was basically a puff piece, and even the cover shot looked like stock photography.'

Echoes another tech business reporter, who requested anonymity, 'Bezos is very tight-lipped and consistent with his answers. In fact, you'll often see the exact same quotes from him in several different articles.'

Reporters also complain about the fire wall Amazon maintains between company executives and press. 'Unlike Yahoo!, for example, Amazon's PR department never gives out direct phone numbers to anyone,' says another tech business reporter. 'Instead, they channel everything through one main PR number, even if I want the number just for a quick follow-up question. And even (senior PR manager) Patty Smith wouldn't give me her direct number. I finally got her mobile number off my caller ID. Bill Curry, though, is actually really good about getting back to us.'

For his part, Curry says he and his team 'try to be as open and accessible to the press as we can, and on any given day, we have dozens of executives talking to reporters. But does every reporter get to talk to every executive whenever he or she wants? Certainly not.'



IR a thin life raft

To be fair, analysts - even those who have dinged the company's stock - rate the performance of Amazon's IR folks as above average. 'I think they do a very good job at communicating with (the analyst community), considering how hard it must be with all the hype surrounding the company and all the people out there watching them,' says Fay Landes, an analyst with Sanford W. Bernstein.

In fact, according to at least one analyst, Amazon's IR team has become 'even more accommodating to our needs' now that the stock has dropped.

'I think they realized they were arrogant and had burned some bridges early on,' says Alan Alper, a senior analyst with Gomez Advisers.

According to a recent article in Fortune (December 18), Bezos seems to have mastered the push-for-profitability mantra. Writer Katrina Brooker begins her piece, 'A year ago, getting Jeff Bezos to talk about making money was a bit like getting Bill Clinton to define sex ... Today you can't get Bezos to stop talking about making money ... During one recent hourlong interview, the word 'profit,' or some variation thereof, came up 25 times ...'

Bezos might have memorized the rhetoric, but some say his delivery is still lacking. As Alper explains, 'He's way too happy-faced. If only he would stop laughing like a jackal all the time. It's time to get serious now.'

Others fault Amazon for being too reactive, missing opportunities for better long-term programs, such as promoting each of the different online stores. That could be because recent cuts to the marketing budget have reportedly resulted in a significant scaling back of PR funds. Golin/Harris, which has worked with the company since October 1998 and handles launch and promotion-oriented PR, would not grant PRWeek an interview for this story.

Former senior PR manager, Paul Capelli, now VP corporate communications at CNBC, says focusing only on its financial viability and neglecting category-specific PR efforts, could be the company's biggest mistake.

'I think they would do well to remember that - bottom-line - Amazon is a retailer. And they should be looking at more of a store-by-store approach, focusing on and drilling down deep within each product category, and focusing on designing PR programs to reach these specific customers,' he says.

In the end, communications might not be enough to save - or sink - Amazon.

'The old saying goes, 'First you have to do good work, and then you can talk about it,'' says Dan Millar, a consultant with the Institute of Crisis Management. 'The bottom line is, Amazon needs to either show a profit or do something to assure its investors and analysts that it will soon.'



AMAZON.COM

Public Relations

VP of marketing: Alan Brown

Senior director of PR, corporate: Bill Curry (reports to Brown)

Director of PR, corporate: Patricia Smith

Director of PR, US retail: Lizzie Allen

Director of PR, international: Margaret Dawson

Investor Relations

Director of IR: Tim Halliday

Public Affairs

VP of global public policy: Paul Misener

Employee Communications

Handled by the strategic growth department

External Agencies

Golin/Harris International

PR Budget: Would not disclose.



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