BEST OF THE WEB: Cooling the growth engine? Amazon and the air conditioners

Internet retailing might be built around low labour costs, but even the world’s biggest online retailers can’t avoid the human factor. Across America, hundreds of thousands of workers fly around the floors of the giant warehouses operated by Amazon and other retailers to fulfil the millions of orders placed every week.

It’s hard, hot and poorly paid work. It’s also very dangerous. One of the most controversial tech articles of last year came out of a publication called Morning Call and documented the oppressive conditions inside an Amazon warehouse in a town called Allentown.

The lasting image of the article was of a line of ambulances waiting in the parking lot of the warehouse, ready to take heat-stressed workers away.

“During summer heat waves, Amazon arranged to have paramedics parked in ambulances outside, ready to treat any workers who are dehydrated or suffered other forms of heat stress. Those who couldn’t quickly cool off and return to work were sent home or taken out in stretchers and wheelchairs and transported to area hospitals. And new applicants were ready to begin work at any time.”

Happily, things have changed. According to an update posted by Morning Call this week, 40 air conditioners have been installed on the roof of that particular warehouse, part of $52 million Amazon is spending to cool its fulfilment centres.

However, is Amazon motivated by its employees or something else? The article quotes a Forrester analyst, Sucharita Mulpuru, who said the air conditioners were most likely designed to keep the electronic products the company sells nice and cool.

“I would like to think there was an element of humanity to the decision, but there’s nothing in Amazon’s history or in Jeff Bezos’s public persona that would lead me to think that was the driver of the decision,” she is quoted as saying. Ouch!

How big is too big for Amazon?

Bezos comes in for some more insults in a lengthy piece in The Nation looking at Amazon’s impact on the publishing industry.

The article looks at how Bezos cleverly targeted the book sector as the vehicle that would help him grow an internet business very quickly, and very big.

“In 1994, four years after the first Internet browser was created, Bezos stumbled upon a startling statistic: the internet had been growing at the rate of 2,300% annually,” journalist Steve Wasserman writes.

Bezos was intrigued.

“You know, things just don’t grow that fast,” he observed. “It’s highly unusual, and that started me thinking, ‘What kind of business plan might make sense in the context of that growth?’”

Of course, Amazon’s rise has had a devastating impact on the book industry. First, bookstores big (think the bankrupt Borders) and small (thousands of independent stores) were hit. Now, as Amazon moves further into eBooks and launches its own publishing arm, it’s the publishers that are under threat.

Amazon’s incredible market share gives it incredible power over all sections of the book industry. Publishers bristle at that power, but authors and the reading public arguably have better access to each other than ever before.

Jeff Bezos got his wish to get big fast and he hasn’t had to worry too much about the consequences.

But these two Amazon articles challenge us: Does big and cheap always mean best?

Cavemen of the internet

A sexism scandal at Melbourne tech incubator York Butter Factory in April has forced many to think about how women are treated in the tech sector. Silicon Valley is now being forced to address the same question.

Ellen Pao, a junior partner at the well-known venture capital firm of Kleiner Perkins Caufield & Byers, filed a sexual discrimination lawsuit against the company and her colleagues, alleging, among other things, that she faced “professional retaliation” after spurning sexual advances.

New York Times journalist David Streitfeld sums up beautifully the reaction of the Valley.

“Instead of talking about the New New Thing, people are discussing an old, old problem. And they are taking sides.

“Although the accusations have yet to be heard in court, even some of Ms. Pao’s critics concede that she is exposing an uncomfortable truth about Silicon Valley: starting tech companies in 2012 is still a male game, and so is funding them.

“Her complaint goes further. It depicts venture capitalists here as a group of 21st century men who may be hard at work building the 22nd century but, when it comes to dealing with women in the workplace, are stuck firmly in the caveman era — or at least in the 1950s. It’s a portrait that many women in tech find all too familiar.”

Pao and Kleiner Perkins aren’t talking right now, but The Times’ story depicts a deeply male world forced to confront a very good question: Why aren’t there more women at the top of the tech world?


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