If you want to read my realtime reactions to the nonsense, there's a fairly long Twitter thread. If you want a short summary, it's this: everyone who spoke is angry about some aspect of these companies but (and this is kind of important) there is no consensus about why and the reasons for their anger is often contradictory. The most obvious example of this played out in regards to discussions that were raised about the decision earlier this week by YouTube and Facebook (and Twitter) to take down an incredibly ridiculous Breitbart video showing a group of "doctors" spewing dangerous nonsense regarding COVID-19 and how to treat it (and how not to treat it). The video went viral, and a whole bunch of people were sharing it, even though one of the main stars apparently believes in Alien DNA and Demon Sperm. Also, when Facebook took down the video, she suggested that God would punish Facebook by crashing its servers.

However, during the hearing, there were multiple Republican lawmakers who were furious at Facebook and YouTube for removing such content, and tried to extract promises that the platforms would no longer "interfere." Amusingly (or, not really), at one point, Jim Sensenbrenner even demanded that Mark Zuckerberg answer why Donald Trump Jr.'s account had been suspended for sharing such a video -- which is kind of embarrassing since it was Twitter, not Facebook, that temporarily suspended Junior's account (and it was for spreading disinfo about COVID, which that video absolutely was). Meanwhile, on the other side of the aisle, Rep. Cicilline was positively livid that 20 million people still saw that video, and couldn't believe that it took Facebook five full hours to decide to delete the video.

So, you had Republicans demanding these companies keep those videos up, and Democrats demanding they take the videos down faster. What exactly are these companies supposed to do?

Similarly, Rep. Jim Jordan made some conspiracy theory claims saying that Google tried to help Hillary Clinton win in 2016 (the fact that she did not might raise questions about how Jordan could then argue they have too much power, but...) and demanded that they promise not to "help Biden." On the other side of the aisle, Rep. Jamie Raskin complained about how Facebook allowed Russians and others to swing the election to Trump, and demanded to know how Facebook would prevent that in the future.

So... basically both sides were saying that if their tools are used to influence elections, bad things might happen. It just depends on which side wins to see which side will want to do the punishing.

Nearly all of the Representatives spent most of their time grandstanding -- rarely about issues related to antitrust -- and frequently demonstrating their own technological incompetence. Rep. Greg Steube whined that his campaign emails were being filtered to spam, and argued that it was Gmail unfairly handicapping conservatives. His "evidence" for this was that it didn't happen before he joined Congress last year, and that he'd never heard of it happening to Democrats (a few Democrats noted later that it does happen to them). Also, he said his own father found his campaign ads in spam, and so clearly it wasn't because his father marked them as spam. Sundar Pichai had to explain to Rep. Steube that (1) they don't spy on emails so they have no way of knowing that emails were between a father and son, and (2) that emails go to spam based on a variety of factors, including how other users rate them. In other words, Steube's own campaign is (1) bad at email and (2) his constituents are probably trashing the emails. It's not anti-conservative bias.

Rep. Ken Buck went on an unhinged rant, claiming that Google was in cahoots with communist China and against the US government.

On that front, Rep. Jim Jordan put on quite a show, repeatedly misrepresenting various content moderation decisions as "proof" of anti-conservative bias. Nearly every one of those examples he misrepresented. And then when a few other Reps. pointed out that he was resorting to fringe conspiracy theories he started shouting and had to be told repeatedly to stop interrupting (and to put on his mask). Later, at the end of the hearing, he went on a bizarre rant about "cancel culture" and demanded each of the four CEOs to state whether or not they thought cancel culture was good or bad. What that has to do with their companies, I do not know. What that has to do with antitrust, I have even less of an idea.

A general pattern, on both sides of the aisle was that a Representative would describe a news story or scenario regarding one of the platforms in a way that misrepresented what actually happened, and painted the companies in the worst possible light, and then would ask a "and have you stopped beating your wife?" type of question. Each of the four CEOs, when put on the spot like that, would say something along the lines of "I must respectfully disagree with the premise..." or "I don't think that's an accurate representation..." at which point (like clockwork) they were cut off by the Representative, with a stern look, and something along the lines of "so you won't answer the question?!?" or "I don't want to hear about that -- I just want a yes or no!"

It was... ridiculous -- in a totally bipartisan manner. Cicilline was just as bad as Jordan in completely misrepresenting things and pretending he'd "caught" these companies in some bad behavior that was not even remotely accurate. This is not to say the companies haven't done questionable things, but neither Cicilline nor Jordan demonstrated any knowledge of what those things were, preferring to push out fringe conspiracy theories. Others pushing fringe wacko theories included Rep. Matt Gaetz on the Republican side (who was all over the map with just wrong things, including demanding that the platforms would support law enforcement) and Rep. Lucy McBath on the Democratic side, who seemed very, very confused about the nature of cookies on the internet. She also completely misrepresented a situation regarding how Apple handled a privacy situation, suggesting that protecting user's privacy by blocking certain apps that had privacy issues was anti-competitive.

There were a few Representatives who weren't totally crazy. On the Republican side, Rep. Kelly Armstrong asked some thoughtful questions about reverse warrants (not an antitrust issue, but an important 4th Amendment one) and about Amazon's use of competitive data (but... he also used the debunked claim that Google tried to "defund" The Federalist, and used the story about bunches of DMCA notices going to Twitch to say that Twitch should be forced to pre-license all music, a la the EU Copyright Directive -- which, of course, would harm competition, since only a few companies could actually afford to do that). On the Democratic side, Rep. Raskin rightly pointed out the hypocrisy of Republicans who support Citizens United, but were mad that companies might politically support candidates they don't like (what that has to do with antitrust is beyond me, but it was a worthwhile point). Rep. Joe Neguse asked some good questions that were actually about competition, but for which there weren't very clear answers.

All in all, some will say it was just another typical Congressional hearing in which Congress displays its technological ignorance. And that may be true. But it is disappointing. What could have been a useful and productive discussion with these four important CEOs was anything but. What could have been an actual exploration of questions around market power and consumer welfare... was not. It was all just a big performance. And that's disappointing on multiple levels. It was a waste of time, and will be used to reinforce various narratives.

But, from this end, the only narrative it reinforced was that Congress is woefully ignorant about technology and how these companies operate. And they showed few signs of actually being curious in understanding the truth.

You may recall that, approximately a year ago, Jeff Bezos put out quite a Medium post, entitled: No thank you, Mr. Pecker, in which he exposed an attempt by David Pecker's National Enquirer to engage in what sure looks like a blackmail effort to silence Washington Post (which Bezos owns) reporting efforts. The post came about a month after the National Enquirer had released evidence of an affair that Bezos was having, including releasing personal text messages (the National Enqurier release came hours after Bezos himself announced he was getting a divorce from his wife). According to Bezos' blog post, the Enquirer had also threatened to release personal photos of Bezos if he did not call off an investigation he had launched into how the National Enquirer had obtained those text messages.

A little over a month and a half later, the investigator that Bezos had hired, Gavin de Becker, announced that he believed Saudi Arabia was involved in obtaining Bezos's personal data, adding a bit of international intrigue to the whole thing. de Becker argued that the evidence pointed to the Saudis much more than Michael Sanchez, the brother of the woman with whom Bezos was having the affair, who had claimed that he had given the data to the National Enquirer. As de Becker noted, Sanchez seemed to be a fall guy to distract from the possible Saudi connection:

My office quickly identified the person whom the Enquirer had paid as a source: a man named Michael Sanchez, the now-estranged brother of Lauren Sanchez, whom Bezos was dating. What was unusual, very unusual, was how hard AMI people worked to publicly reveal their source’s identity. First through strong hints they gave to me, and later through direct statements, AMI practically pinned a “kick me” sign on Michael Sanchez.

de Becker's investigation pointed out that the National Enquirer had contacted Sanchez first about the affair, suggesting that the attempt to work with him may have been a case of parallel construction, rather than an original source.

Saudi Arabia's potential involved was fascinating -- as the Saudi government, and MBS, have apparently been upset about the Washington Post publishing columns critical of the Saudi government by Jamal Khashoggi -- the journalist who was then killed by Saudi operatives in late 2018, in an operation that many blamed on MBS, and which MBS has eventually taken responsibility for. That murder has brought a lot more critical attention to MBS and his efforts to stomp out criticism.

So now we finally get to the latest news, in which the Guardian first reported that the real way that Bezos' text messages and photos were accessed was because MBS sent Bezos a Whatsapp message that contained the malware payload.

The encrypted message from the number used by Mohammed bin Salman is believed to have included a malicious file that infiltrated the phone of the world’s richest man, according to the results of a digital forensic analysis.

This analysis found it “highly probable” that the intrusion into the phone was triggered by an infected video file sent from the account of the Saudi heir to Bezos, the owner of the Washington Post.

The two men had been having a seemingly friendly WhatsApp exchange when, on 1 May of that year, the unsolicited file was sent, according to sources who spoke to the Guardian on the condition of anonymity.

A related story noted that Bezos and MBS had met a few weeks earlier at a Hollywood dinner organized by filmmaker Brian Grazer and agent Ari Emanuel (what a dinner that must have been) at a time when MBS was trying to ingratiate himself with both the American tech and entertainment industries (efforts that began to run into some issues after the murder of Khashoggi). Bezos and MBS apparently began communicating by Whatsapp after that dinner, and in the midst of the conversation, MBS passed along the link.

The Guardian understands a forensic analysis of Bezos’s phone, and the indications that the “hack” began within an infected file from the crown prince’s account, has been reviewed by Agnès Callamard, the UN special rapporteur who investigates extrajudicial killings. It is understood that it is considered credible enough for investigators to be considering a formal approach to Saudi Arabia to ask for an explanation.

While the Guardian does not share the full report (or even say who wrote it), Vice Motherboard has since obtained the report, and provides even more details:

The report, obtained by Motherboard, indicates that investigators set up a secure lab to examine the phone and its artifacts and spent two days poring over the device but were unable to find any malware on it. Instead, they only found a suspicious video file sent to Bezos on May 1, 2018 that “appears to be an Arabic language promotional film about telecommunications.”

That file shows an image of the Saudi Arabian flag and Swedish flags and arrived with an encrypted downloader. Because the downloader was encrypted this delayed or further prevented “study of the code delivered along with the video.”

Investigators determined the video or downloader were suspicious only because Bezos’ phone subsequently began transmitting large amounts of data. “[W]ithin hours of the encrypted downloader being received, a massive and unauthorized exfiltration of data from Bezos’ phone began, continuing and escalating for months thereafter,” the report states.

The report highlights that this new massive amount of data flow "never returned to baseline" suggesting that the link certainly did something to his phone that started sending all Bezos' data elsewhere. The report includes some fairly fascinating screenshots, including first how Bezos and MBS connected on Whatsapp:

And then there's a screenshot of the random video link that supposedly lead to the infection of Bezos' phone:

The story then gets even crazier, as it alleges that a few months later, MBS sent two more odd texts to Bezos:

The first such text was sent to Bezos from MBS' account on November 8, 2018, and contained a single photograph of a woman resembling Lauren Sanchez, with whom Bezos was having a then-secret personal relationship. For context, this was after the relationship would have been obvious to persons with access to private texts, calls, and images on Bezos' phone, but months before the relationship was known or reported publicly. The photo and the cryptic caption were sent precisely during the period Bezos and his wife were exploring divorce. "Arguing with a woman is like reading the Software License agreement. In the end you have to ignore everything and click I agree." (Memes such as this were available on the Internet, however the content of the text was not typical of any past communication from MBS, making it likely it was sent with reference to Bezos' personal life events at the time.

The second text was also somewhat creepy -- and also somewhat counterproductive. The two hadn't communicated for a while, and yet just a couple days after Bezos was given a briefing about how the Saudis were mounting a big online campaign against him, MBS randomly texted Bezos not to believe everything he's heard:

The second text demonstrates awareness of non-public information that could have been gained via surveillance of Bezos' phone was sent to Bezos from MBS's WhatsApp account, after more than three (3) months of no communication between the parties. On February 14, 2019, Bezos was provided a detailed briefing about the extent of the Saudi online campaign against him. The briefing was provided in two (2) calls on the Bezos' phone. This text evinces an awareness of what Bezos had just been told:

It seems a bit galaxy brain to suddenly pop up with a message like, telling Bezos not to believe all he'd heard about Saudi attempts to hack him, in a manner that basically would confirm that the Saudi's had access to his private conversations. Though, to be fair, it is possible that MBS's message was not in reference to private briefings, but rather in reference to Bezos' own Medium blog post (referenced at the top of this story) which had come out a week earlier, and had mentioned the possibility of Saudi involvement with the National Enquirer. So there is a potentially non-nefarious explanation for this particular text.

However, it does seem that it was this latter text that caused Bezos and de Becker to begin seriously investigating whether or not the Saudis had hacked Bezos' phone, because it was the very next day that de Becker agreed to get Bezos' phone analyzed.

In response to all of this, two UN Special Rapporteurs, Agnes Callamard, UN Special Rapporteur on summary executions and extrajudicial killings, and David Kaye, UN Special Rapporteur on freedom of expression, have put out a call for an investigation into MBS's role in all of this:

"The information we have received suggests the possible involvement of the Crown Prince in surveillance of Mr. Bezos, in an effort to influence, if not silence, The Washington Post's reporting on Saudi Arabia. The allegations reinforce other reporting pointing to a pattern of targeted surveillance of perceived opponents and those of broader strategic importance to the Saudi authorities, including nationals and non-nationals. These allegations are relevant as well to ongoing evaluation of claims about the Crown Prince's involvement in the 2018 murder of Saudi and Washington Post journalist, Jamal Khashoggi.

"The alleged hacking of Mr. Bezos's phone, and those of others, demands immediate investigation by US and other relevant authorities, including investigation of the continuous, multi-year, direct and personal involvement of the Crown Prince in efforts to target perceived opponents.

"This reported surveillance of Mr. Bezos, allegedly through software developed and marketed by a private company and transferred to a government without judicial control of its use, is, if true, a concrete example of the harms that result from the unconstrained marketing, sale and use of spyware. Surveillance through digital means must be subjected to the most rigorous control, including by judicial authorities and national and international export control regimes, to protect against the ease of its abuse. It underscores the pressing need for a moratorium on the global sale and transfer of private surveillance technology.

"The circumstances and timing of the hacking and surveillance of Bezos also strengthen support for further investigation by US and other relevant authorities of the allegations that the Crown Prince ordered, incited, or, at a minimum, was aware of planning for but failed to stop the mission that fatally targeted Mr. Khashoggi in Istanbul.

At a time when Saudi Arabia was supposedly investigating the killing of Mr. Khashoggi, and prosecuting those it deemed responsible, it was clandestinely waging a massive online campaign against Mr. Bezos and Amazon targeting him principally as the owner of The Washington Post."

The whole story is completely crazy -- and feels like a made up Hollywood movie of the kind Grazer might produce -- rather than a true story involving two of the world's richest and most powerful men. Anyway, in the meantime, never click on random videos sent to you by rich autocrats with a history of oppression.

More footage of the incident appeared later providing a bit more context, making the obvious racism seem less obvious. But the Twitter ship had sailed and there was little hope of turning it around. Lessons could have been learned from rushing to judgment, but Nick Sandmann and his family's lawyers have decided this lessons should be taught via libel lawsuits. They've got an uphill battle as nearly everything said about Sandmann and the incident was protected opinion, but a lack of credible arguments has never prevented lawsuits from being filed.

As Buzzfeed reports, one of the first targets is the Washington Post. Sandmann's complaint [PDF], composed by attorneys Lin Wood and Todd McMurtry, is about half op-ed, half federal complaint. Here's the lead off:

The Post is a major American daily newspaper published in Washington, D.C. which is credited with inventing the term "McCarthyism" in an editorial cartoon published in 1950. Depicting buckets of tar, the cartoon made fun of then United States Senator Joseph McCarthy's "tarring" tactics of engaging in smear campaigns and character assassination against citizens whose political views made them targets of his accusations.

In a span of three (3) days in January of this year commencing on January 19, the Post engaged in a modern-day form of McCarthyism by competing with CNN and NBC, among others, to claim leadership of a mainstream and social media mob of bullies which attacked, vilified, and threatened Nicholas Sandmann (“Nicholas”), an innocent secondary school child.

The Post wrongfully targeted and bullied Nicholas because he was the white, Catholic student wearing a red “Make America Great Again” souvenir cap on a school field trip to the January 18 March for Life in Washington, D.C. when he was unexpectedly and suddenly confronted by Nathan Phillips (“Phillips”), a known Native American activist, who beat a drum and sang loudly within inches of his face (“the January 18 incident”)

Moving along…

The Post ignored basic journalist standards because it wanted to advance its well-known and easily documented, biased agenda against President Donald J. Trump (“the President”) by impugning individuals perceived to be supporters of the President.

[Scrolls to the bottom of the filing to make sure it wasn't composed by Larry Klayman...]

In this country, our society is dedicated to the protection of children regardless of the color of their skin, their religious beliefs, or the cap they wear.

But the Post did not care about protecting Nicholas. To the contrary, the Post raced with a reckless disregard of the facts and truth because in this day and time there is a premium for being the first and loudest media bully.

The Post wanted to lead the charge against this child because he was a pawn in its political war against its political adversary – a war so disconnected and beyond the comprehension of Nicholas that it might as well have been science fiction.

Let's just try to find the factual allegations. It's established that Sandmann's lawyers wish to offer their opinion that the Washington Post is a bully that targeted Nick Sandmann because he supported a president the Post dislikes. But that's all that's been established -- despite the use of the term "defamation" here and there -- by the time the lawsuit drops its first mention of damages. Some weird eye-for-an-eye demand is being made by Sandmann's attorneys.

In order to fully compensate Nicholas for his damages and to punish, deter, and teach the Post a lesson it will never forget, this action seeks money damages in excess of Two Hundred and Fifty Million Dollars ($250,000,000.00) – the amount Jeff Bezos, the world’s richest person, paid in cash for the Post when his company, Nash Holdings, purchased the newspaper in 2013.

Eight pages in, we finally have an allegation that doesn't sound like an angry blog post:

On January 19, 20 and 21, the Post ignored the truth and falsely accused Nicholas of, among other things, “accost[ing]” Phillips by “suddenly swarm[ing]” him in a “threaten[ing]” and “physically intimidat[ing]” manner as Phillips “and other activists were wrapping up the march and preparing to leave,” “block[ing]” Phillips path, refusing to allow Phillips “to retreat,” “taunting the dispersing indigenous crowd,” chanting “build that wall,” “Trump2020,” or “go back to Africa,” and otherwise engaging in racist and improper conduct which ended only “when Phillips and other activists walked away.”

Seems straightforward except for a number of inconvenient facts. As the lawsuit admits, these reports were based on an edited video that led many, many people to the same conclusions. The lawsuit claims the Post acted carelessly by not acting on information it became aware of four days after it published its first article.

By January 23, the Post conceded that the @2020fight account that was largely responsible for the edited video going viral on social media may have been purchased from Shoutcart.com for that specific purpose.

With no investigation into the @2020fight account, the Post actively, negligently, and recklessly participated in making the 2020fight Video go viral on social media when on January 19 at 9:21 a.m., Post reporter Joe Heim re-posted the 2020fight Video.

The lawsuit says the Post recklessly published a piece on the incident on January 19th, four hours after the edited video went viral. Somehow this is defamatory because the Post "recklessly" did not act on information it didn't have (the extended video posted a day later) prior to publishing this article. Then the lawsuit wanders off to discuss the investigation of the incident by a firm hired by the Catholic school Sandmann attends, as though this should have some bearing on an article published prior to an investigation the Washington Post wasn't involved with.

When it comes to narrow down the alleged defamation, the lawsuit somehow gets even worse. It spends four paragraphs enumerating "false and defamatory gists" -- a legal concept usually offered as a defense, rather than an accusation. Then it accuses the Washington Post of defaming Sandmann by publishing statements made by other people to the Post reporter.

In its First Article, the Post published or republished the following false and defamatory statements:

(a) The headline “‘It was getting ugly’: Native American drummer speaks on the MAGA-hat wearing teens who surrounded him.”

(b) “In an interview Saturday, Phillips, 64, said he felt threatened by the teens and that they suddenly swarmed around him as he and other activists were wrapping up the march and preparing to leave.”

(c) “Phillips, who was singing the American Indian Movement song of unity that serves as a ceremony to send the spirits home, said he noticed tensions beginning to escalate when the teens and other apparent participants from the nearby March for Life rally began taunting the dispersing indigenous crowd.”

(d) “A few people in the March for Life crowd began to chant ‘Build that wall, build that wall,’ he said.”

(e) “‘It was getting ugly, and I was thinking: ‘I’ve got to find myself an exit out of this situation and finish my song at the Lincoln Memorial,’ Phillips recalled. ‘I started going that way, and that guy in the hat stood in my way and we were at an impasse. He just blocked my way and wouldn’t allow me to retreat.’”

(f) “‘It clearly demonstrates the validity of our concerns about the marginalization and disrespect of Indigenous peoples, and it shows that traditional knowledge is being ignored by those who should listen most closely,’ Darren Thompson, an organizer for the [Indigenous Peoples Movement], said in the statement.

(g) “Chase Iron Eyes, an attorney with the Lakota People Law Project, said the incident lasted about 10 minutes and ended when Phillips and other activists walked away.”

(h) “‘It was an aggressive display of physicality. They were rambunctious and trying to instigate a conflict,’ he said. ‘We were wondering where their chaperones were. [Phillips] was really trying to defuse the situation.’”

(i) “Phillips, an Omaha tribe elder who also fought in the Vietnam war, has encountered anti-Native American sentiments before . . . .”

From there, it discusses about a second article by the Washington Post, alleging it was somehow defamatory for the Post to publish a statement from the Covington Diocese decrying the teen's behavior. It also says a third article from the Post was defamatory -- again listing only things other people said to the Post's reporter. Then there's more stuff about "defamatory gists." And on it goes for several more pages, highlighting each Post article about the subject while failing to point out any defamatory statements actually made by the Washington Post.

This is a garbage lawsuit. It makes zero credible defamation accusations, spending its entirety either stating its own opinions about the paper or attempting to hold it legally responsible for statements made by other people. It's not winnable. Its sole purpose appears to be to exist loudly, hoping to create a deterrent effect simply by banging about the place self-importantly. It will go nowhere, but it will do so as noisily as possible. If this is all Sandmann's parents wanted from their legal representation, they should have accepted the pro bono offers being made, rather than sink money into this ostentatious waste of time.

• Blue Origin has successfully landed a rocket after it launched to a suborbital altitude. Elon Musk rightly points out that this isn't exactly the first time a suborbital rocket has landed in reusable condition, but it's still nice to see rocket technology improving and getting cheaper to operate. [url]
• Jeff Bezos is moving his space company to Florida to build and launch its rockets near NASA's government facilities -- the Kennedy Space Center and the Cape Canaveral Air Force Station. Blue Origin will be making its rocket engines in the good ol' USA, and its BE-3 engine is the one that will be reusable. (note: The BE-3 isn't as powerful as Blue Origin's BE-4 engine which is more comparable to SpaceX's reusable rocket.) [url]
• Lots of people credit Jules Verne for inspiring spaceflight, but the first proposal of rocket-based spaceflight actually comes from Canadian William Leitch in 1861. Leitch's paper was written 4 years before Verne's book "From the Earth to the Moon" -- and decades before plausible rocket-powered space plans from Russian Konstantin Tsiolkovsky and American Robert Goddard were written. But does it matter who thought of something first, or who actually executes it? [url]

Amazon remains the only US internet giant in the Fortune 500 that has not yet released a report detailing how many demands for data it receives from the US government.

Although people are starting to notice, the retail and cloud giant has no public plans to address these concerns.

Word first spread last week when the ACLU's Christopher Soghoian, who's spent years publicly denouncing companies for poor privacy practices, told attendees at a Seattle town hall event that he's "hit a wall with Amazon," adding that it's "just really difficult to reach people there."

Microsoft has contracts with various governments to provide Windows and Office software. Google offers a range of open-source and cloud-based services to the government, and Apple provides iPhones and iPads to government and military users, thanks to earning various certifications.

With its smartphone and tablet line-up, the company is taking on even more data -- including browsing history through its Silk browser, reading habits, and other data like IP addresses. The company is slated to be moving into the enterprise and work-based email provider space.

• Pierre Omidyar is the latest billionaire to invest in a journalistic enterprise and create a new kind of sustainable journalism. Omidyar was considering buying the Washington Post, but he decided to start from scratch, so he'll find out whether his millions would have been better spent on an existing news organization. [url]
• Jeff Bezos bought the Washington Post for $250 million, and everyone will be watching the natural experiment of how the Washington Post evolves, compared to Omidyar's new media startup. Will any Washington Post journalists cover this story? [url]
• Chris Hughes bought The New Republic last year, and he wasn't the first billionaire to buy a media outlet -- but he might be one of the youngest. TNR has re-designed its layout, and Hughes thinks editorial decisions can't be isolated from the business side of his magazine. Hughes aims to make the company profitable in the next few years.... [url]

"Patents are supposed to encourage innovation and we’re starting to be in a world where they might start to stifle innovation. Governments may need to look at the patent system and see if those laws need to be modified because I don’t think some of these battles are healthy for society. I love technology, I love invention, I like rapid change, and really it’s the golden age of wireless devices and mobile devices."

In a way, that is like the nicest compliment I�ve ever gotten. First of all, I think we have gotten pretty lucky recently. You should anticipate a certain amount of failure. Our two big initiatives, AWS and Kindle � two big, clean-sheet initiatives � have worked out very well. Ninety-plus percent of the innovation at Amazon is incremental and critical and much less risky. We know how to open new product categories. We know how to open new geographies. That doesn�t mean that these things are guaranteed to work, but we have a lot of expertise and a lot of knowledge. We know how to open new fulfillment centers, whether to open one, where to locate it, how big to make it. All of these things based on our operating history are things that we can analyze quantitatively rather than to have to make intuitive judgments.

When you look at something like, go back in time when we started working on Kindle almost seven years ago�. There you just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you haven�t invented for too long.

If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company. AWS also started about six or seven years ago. We are planting more seeds right now, and it is too early to talk about them, but we are going to continue to plant seeds. And I can guarantee you that everything we do will not work. And, I am never concerned about that�. We are stubborn on vision. We are flexible on details�. We don�t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn�t give up.

But. if you get to a point where you look at it and you say look, we are continuing invest a lot of money in this, and it�s not working and we have a bunch of other good businesses, and this is a hypothetical scenario, and we are going to give up on this. On the day you decide to give up on it, what happens? Your operating margins go up because you stopped investing in something that wasn�t working. Is that really such a bad day?

So, my mind never lets me get in a place where I think we can�t afford to take these bets, because the bad case never seems that bad to me. And, I think to have that point of view, requires a corporate culture that does a few things. I don�t think every company can do that, can take that point of view. A big piece of the story we tell ourselves about who we are, is that we are willing to invent. We are willing to think long-term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.

I believe if you don�t have that set of things in your corporate culture, then you can�t do large-scale invention. You can do incremental invention, which is critically important for any company. But it is very difficult � if you are not willing to be misunderstood. People will misunderstand you.

Any time you do something big, that�s disruptive � Kindle, AWS � there will be critics. And there will be at least two kinds of critics. There will be well-meaning critics who genuinely misunderstand what you are doing or genuinely have a different opinion. And there will be the self-interested critics that have a vested interest in not liking what you are doing and they will have reason to misunderstand. And you have to be willing to ignore both types of critics. You listen to them, because you want to see, always testing, is it possible they are right?

But if you hold back and you say, �No, we believe in this vision,� then you just stay heads down, stay focused and you build out your vision.

And in the U.S., the Constitution prohibits states from interfering in interstate commerce. And there was a Supreme Court case decades ago that clarified that businesses � it was mail-order at that time because the Internet did not exist � that mail-order companies could not be required to collect sales tax in states where they didn�t have what�s called �nexus.�

And that�s a very clear decision.

Our point of view on this is that we should simplify the sales tax system, and we�ve been consistent on this for about 10 years. It�s called the Streamlined Sales Tax Initiative. I think 22 or 23 states have signed onto it. Because the right way to fix this is with federal legislation. That�s where it can be fixed properly.

Sales tax collection is very complicated. And, you know, we�re no different from big chains of retailers � they don�t collect sales taxes in states where they don�t have nexus, either. So everybody is following the same rules. And I don�t think our customers would say, �Why don�t you just optionally collect the tax? I know you�re not required to do it, but aw, go ahead.�