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3 Questions for Jeff Bezos

For an investor, little-noticed news is gold. Here's a nugget that you might have missed: (Nasdaq: AMZN  ) CEO Jeff Bezos last week invested in Twitter through his personal fund, Bezos Expeditions.

Don't know Twitter? It's social networking -- ahem, microblogging -- for the terminally connected. The overcaffeinated, I'll-sleep-when-I'm dead crowd. Many of my Facebook friends use it to tell me exactly what they're doing throughout the day.

I'm dying to know exactly why Bezos is making this bet. Here are three questions for you, sir, and the Foolish reasons why I'm asking them:

Question 1: Why are you investing in Twitter?
Amazon doesn't do social networking. Not in the purest sense, anyway. Sure, there are ratings and reviews. It's also possible to create and share lists. But are these really social tools? Loosely, yes, but they don't do much to foster connectedness. My Amazon friends -- those who can see my wish lists -- aren't plugged into what I'm reading or listening now. Would Twitter help to change that?

Perhaps. At the very least, we know that social networking is serious business. Microsoft (Nasdaq: MSFT  ) has invested millions in Facebook. News Corp. (NYSE: NWS  ) has MySpace working with music labels, which leads to my next question ...

Question 2: What's next on Amazon's shopping list? Social networking? Facebook, perhaps?
Amazon has been making small acquisitions recently. in January, for example. What's interesting is that sites like Audible can be social -- an audio book club could meet and share notes via the site.

And Audible isn't the only one. uses Amazon as a storefront and has a small following on Facebook. Wouldn't it make sense to tighten the connections between the two sites? How about an Amazon-aware application for Facebook, wherein your recent purchases and rated favorites appear at your profile?

Question 3: How much will Web 2.0 and software-as-a-service add to Amazon's growth?
Amazon is one of many firms invested in Web 2.0 and software-as-a-service -- otherwise known as software accessed over the Web, rather than installed on an individual computer's hard drive. What's interesting is that, unlike peers such as EMC (NYSE: EMC  ) , Amazon can benefit directly from providing tools for Web computing.

Why? Amazon, like eBay (Nasdaq: EBAY  ) , benefits from network effects. The more offers it aggregates from specialty retailers -- or from content providers via the red-hot Kindle -- the greater its opportunity for growth.

But that's obvious. It's less clear whether Amazon can be a retail portal in a Web 2.0 world. That certainly seems logical. Trouble is, the history of the Web shows a distinct lack of respect for incumbents -- ask anyone who owns shares of Yahoo! (Nasdaq: YHOO  ) . Could Twitter help Amazon become the king of social retail? I don't see how.

These questions, therefore, fall to you, Mr. Bezos, and to you, dear reader. Think you know the mind of the man behind Amazon? Then use the comments box below to answer my queries -- or propose some of your own.

When you're finished, get your clicks with related Foolishness:

Amazon and eBay are Stock Advisor selections. Microsoft is an Inside Value pick. Try either of these market-beating services risk-free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers, ranked 20,395 out of more than 110,000 participants in CAPS, also writes for Rule Breakers. He didn't own shares in any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 30, 2008, at 3:07 PM, LouieJunior wrote:

    Question #4 --

    How many Kindles have been sold?

  • Report this Comment On June 30, 2008, at 6:56 PM, karthikeleven wrote:

    Hi Tim

    I think the investment made by Mr . Bezos in twitter is a personal investment , through his VC firm. Correct me if i am wrong.

  • Report this Comment On July 01, 2008, at 1:47 AM, turb0kat wrote:

    Bezos expeditions investments are highly unlikely to be involved with Amazon - if Amazon ended up interested in Twitter that would look extremely bad for Jeff.

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