PUBLIC LIVES
Online Booksellers: A Tale of Two C.E.O.'s
By ELISABETH BUMILLER
ere is a great war story. On one side is Amazon.com, the giant online bookseller (market value
$5.5 billion), led by its 35-year-old Seattle-based founder, Jeffrey P. Bezos. On the other side is
Barnesandnoble.com, the small but aggressive No. 2 with the brand name and a very rich
partner (Bertelsmann A.G.), led by our subject today, Jonathan Bulkeley.
Bulkeley, 38, who started America Online's British
operation, was hired last month in an attempt to make
Bezos as miserable as possible. He starts Jan. 4 at the new
Barnesandnoble.com headquarters on Ninth Avenue at
15th Street, in a Port Authority warehouse renovated
into a post-modern lair of exposed computer cables and
sleek cement floors.
Thomas Middelhoff, the Bertelsmann chief executive
who hired him -- and invested $300 million for a 50
percent stake in Barnesandnoble.com -- said yesterday
that Bulkeley was "the answer to Jeff Bezos. The future
will show who will be better, Jeff or Jonathan.
Personally, I bet on Jonathan. Jonathan is one of the
reasons that Bertelsmann invested so heavily in the
Barnesandnoble.com venture. I believe that for the first
time ever Jeff will have real competition."
The response from Bezos? Kay Dangaard, his
spokeswoman: "About 18 months ago, somebody said we
were Amazon.toast because Barnes & Noble was
coming online. And 18 months later, we're 12 times
bigger than Barnesandnoble.com. I think it's wonderful
to be in a position where other people are trying to be you."
So there was Bulkeley in his office last week, sounding necessarily tough. "It's early," he said. "We're
motivated. We've got a killer team." He estimated Barnesandnoble.com had about 10 percent of the
online bookstore market compared to what he said was Amazon.com's 80 percent, although no one
knows for sure.
Interestingly, Bulkeley was working at America Online's Virginia headquarters in 1994 when AOL
called Barnes & Noble to set up an online bookstore. "They never called back," he said. In 1994
Amazon.com was up and running; Barnes & Noble finally crept online in 1997.
"But let's take this all in perspective," Bulkeley said. "Three years does not end the war."
Bulkeley ticked off what he saw as the advantages of Barnesandnoble.com: Some 4.5 million titles
compared with Amazon.com's 3 million; better access to out-of-print, used and rare books, and a
brand name that will mean something to the millions of new customers expected to buy online in the
coming years. Industry analysts describe Amazon.com's current 4.5 million customers as the "Internet
elite."
(On Monday, in a blow to Amazon, Microsoft named Barnesandnoble.com the exclusive bookseller on
its MSN network of World Wide Web sites. The New York Times has a marketing partnership with
Barnes & Noble that allows readers of the newspaper's Web site to order books directly from the
bookseller.)
Bulkeley also said that Barnes & Noble's purchase last month of the Ingram Book Group, the nation's
leading book wholesaler, had the potential to speed up the delivery of a Barnesandnoble.com book to
consumers. Right now, if a Denver resident buys a Barnesandnoble.com book that isn't in the
company's distribution center in New Jersey but is available in Ingram's Denver warehouse (one of 11
around the country), the book goes first to the distribution center in New Jersey, then back to the
Denver customer. "That's called inefficient," he said. Bulkeley's hope is to eventually send the book
directly. "Does that win the game?" he asked. "No. Does it help? Yeah."
Ingram also supplies more than half of Amazon.com's books, which
Bulkeley said would continue. "Ingram sells to everybody and will continue
to sell to everybody," he said.
Bulkeley, who is prematurely bald and has the manner of a genial salesman,
grew up in Hartford, where his father was an Aetna vice president and his mother was a national
executive for the Junior League. He went to Hotchkiss, graduated from Yale in 1982 and landed in
New York as an ad salesman for PCjr, a magazine that followed I.B.M.'s computer of the same name.
He went on to Time Warner, where he was publisher of a college magazine that is now defunct, and
then Money, where he sold such Money products as "Wealth Builder," a software program that
provided early online access. "I thought, 'This is cool,'" Bulkeley said.
By 1993 he was at AOL, where he worked to persuade media companies -- including The New York
Times -- to go online, back in the pre-World Wide Web dark ages. In 1995 Bulkeley went to London
to start AOL U.K., a subsidiary of AOL Europe, which is half-owned by Bertelsmann. In three years,
Bulkeley got the company 500,000 customers -- and impressed Middelhoff. "After one year he was
profitable," Middelhoff said.
Bulkeley is married with three children and will live on Fifth Avenue "if we pass the co-op board," he
said. One of his first jobs is to take Barnesandnoble.com public this spring. One of his first problems is
to figure out what to do about people who can't find barnesandnoble.com at all because they are typing
the brick and mortar store's ampersand -- a symbol that doesn't work on the Internet.
"Give me a couple of days," Bulkeley said. |
