Amazon’s something-for-everybody largesse hints at the company’s future growth strategy

In the end, the hunt for a supposed second headquarters for Amazon turned into a parody of that famous episode of Oprah Winfrey’s talk show in which the host gave away cars to audience members.

“You get a headquarters! And you get a headquarters! And you get a headquarters! You, too!”

Or a technology development center, like Boston got earlier this year. Or an “operational center of excellence,” whatever that is, that has been awarded to Nashville. Or a distribution center, like just about every community already has received or soon will be getting. Or more offices ...

Amazon’s largesse seems to know no bounds.

Which is one of the points to take away from this entire expensive and excessive exercise that wound up with “headquarters” being awarded to New York City and Northern Virginia.

The others being:

▪ We’ve said all along that instead of studying Amazon’s criteria to figure out what city it would select (back when Amazon was doling out just one alt-headquarters), it would be more insightful to reverse engineer the decision to figure out which criteria really mattered to the company.

Now we can.

Livability and affordability for workers? So unimportant as to not even qualify for a ranking. You couldn’t come up with much worse combinations of bad traffic and eye-watering housing prices than the two locations that were picked provide.

Access to tech talent? Sort of, although neither area is home to universities considered leaders in the tech realm (if you wanted bad traffic, too-expensive housing and a strong academic base, Boston would have been the runaway winner).

Being in the eastern portion of the country evidently mattered. So did proximity to political power in the other Washington, and well it might, since Amazon will need some allies as it is sailing into increasingly choppy waters, both home and abroad, on tax, employment and antitrust policies. The choice of New York is harder to figure out on that front. Given its independent, disruptive streak, why would Amazon care if it’s close to a financial and media center?

▪ Very early in journalism school the instructors discouraged students from using hackneyed leads like “The dictionary defines (fill in word) as …” In this case, though, we need to ponder whether the word “headquarters” has been drained of meaning.

Here’s Merriam-Webster’s online dictionary on the subject: “A place from which a commander performs the functions of command.” Second definition: “The administrative center of an enterprise.”

A company can’t have two headquarters — not in reality, anyway. It’s not going to last long with important decision making spread across the landscape. Let’s be honest about it: In Amazon’s case, there’s just one headquarters, and that’s wherever Jeff Bezos happens to be that day.

▪ Why then go through this tortured exercise of doling out headquarters like Halloween candy? One argument that’s been made is that it gave Amazon some leverage against Seattle’s more aggressive efforts to grab tax revenue, although that seems a lot of work to go through for a warning shot to the Emerald City.

More realistically, the motivation gets back to the point about political influence. With three states claiming headquarters, and several more with major Amazon facilities, that’s a lot of clout the company can enlist when it has a cause to fight for or against.

▪ If you’re going to pretend you have three headquarters, why stop there? Why not four, five or six? You think we’re kidding? Note that Amazon’s press release mentions the “company’s three headquarters in North America.” Given its global aspirations, why not one in Europe, a couple in Asia, one for India …

▪ Here’s the biggest unanswered and overlooked question of all.

New York and Northern Virginia are each going to get 25,000 employees. Nashville gets 5,000. The company is adding offices in Boston and other cities, and there are suggestions it’s not done growing even in the Puget Sound region.

What are all these extra people going to be doing?

If Amazon has enough people to do the things it does now, that suggests that the company will need to carry through on all the hints and speculation about expansion into new sectors and lines of business.

It’s running out of room for growth from its original core business, retailing. Even if it makes a dent in grocery sales and delivery, even if it snares even more retailing pennies from competitors (who are not going to relinquish market share without an expensive fight), Amazon still needs new worlds to conquer. Cloud services. The Internet of Things. Business-to-business commerce. Media and information. Health care. Banking and financial services. Logistics. Entertainment. Energy and utilities. You name it, and Amazon is either there, will be or is taking a look at it.

What Amazon seems to dread is hitting the stage of maturity that is inevitable for all companies that survive long enough, in which growth is harder and more expensive to come by. It need only look down the street from its first and current headquarters to see what happens to even the splashiest of one-time growth companies. That would be Starbucks, which this past week cut 350 jobs in management and office positions, part of a broader expense-cutting retrenchment.

When that day comes, Amazon will face some decisions about what businesses it really wants to be in and do some restructuring. It might even do something terribly conventional — like deciding that one corporate headquarters is plenty, even for Amazon.

This story was originally published November 17, 2018 at 12:00 AM.