Insider Inc. CEO Henry Blodget told CNBC on Wednesday that Jeff Bezos offered an invaluable piece of advice when the Amazon founder invested in his upstart media company.
Bezos, who will step down as Amazon CEO later this year, led a $5 million investment round in Blodget’s company back in 2013. It was about six years old at the time and known as Business Insider. In an interview on “Squawk Box,” Blodget recalled a discussion he had with Bezos about how he should allocate his time between management and editorial.
“I had been writing all the time. I was being an editor, and one of the things I asked him right after he invested was, ‘Listen, should I keep writing and doing TV and that kind of thing or should I stay CEO? Because the company’s gotten big enough that I really have to do one or the other,'” said Blodget.
Bezos responded by saying he really only had one request as an investor, Blodget recounted. “He said, ‘I am going to beg you to stay CEO.'” On Wednesday, Blodget, a former Wall Street analyst, also described pressing Bezos on the reason. “[Bezos] said, ‘Because you don’t even realize it, but every day you are making dozens of little course corrections. You all are inventing a new model for journalism. You have an instinct as to where that’s going.'”
According to Blodget, Bezos added, ”’If you bring in somebody else who is experienced, you’re going to want to give them a lot of room to make their own decisions. Those will take place over a long time and change things.’ He said, ‘I’m investing because I want you to make those course corrections.'”
Insider Inc. was sold to German publisher Axel Springer in a deal valued at nearly $450 million in 2015. Bezos sold out of his investment in the company in late 2016, Insider Inc. spokesperson Mario Ruiz told CNBC. Blodget remains CEO but in 2017 dropped the role of editor in chief.
Blodget recalled the conversation one day after Amazon announced Bezos will transition from CEO to executive chairman later this year. Andy Jassy will be taking the reins from Bezos, who founded the e-commerce titan more than 25 years ago and turned it into a global behemoth worth nearly $2 trillion. Jassy, a longtime Bezos lieutenant, currently leads Amazon’s highly profitable cloud-computing business.
The Insider boss said he has confidence in Jassy and that he thinks Amazon will “be in great shape for a while,” adding it’ll probably take three to five years before outsiders can determine whether the CEO change will “be a big deal.”
“With companies of this size, they are super tankers. They have enormous momentum,” Blodget said. “You can change several of the people at the top and you’re not going to see the impact from the outside for a long time because the company will continue to do what it’s raised to do.”
Before his tenure as a media CEO, Blodget covered Amazon as a closely watched Wall Street internet analyst during the dot-com boom. In December 1998, while working for brokerage firm CIBC Oppenheimer, he issued a notable price hike on Amazon, and shares soared 19% in the following session.
Blodget went on to work for Merrill Lynch, but his research came under scrutiny. Following an investigation into what the Securities and Exchange Commission called “undue influence of investment banking interests on research analysts at brokerage firms,” regulators permanently banned him from the securities industry in 2003. As part of a multimillion-dollar settlement at the time, Blodget did not deny or admit to allegations made by the SEC.
