readease Chapter 226 The Amazon Collapsed
Chapter 226 The Amazon Collapsed
Chapter 226 The Amazon Collapsed
The book subsidy war launched by PayPay was destined from the beginning to have a limited scope and could never break through the borders of the United States.
Anyone with even a little inside knowledge can see that Ernst would never use PayPay's real money to cultivate new users for Amazon.
The market in the northern United States is different. Amazon has a high profile here, and many people have heard of the Amazon website and may even have used it.
Therefore, even if PayPay's subsidy program indirectly brings some new users to Amazon, the number will inevitably be limited.
"Has the specific reason for Ernst's actions not been found yet?"
In the heart of Wall Street, inside the Goldman Sachs headquarters, Henry Paulson was frowning as he questioned his secretary.
This minor conflict has drawn attention not only from Ernst and Bezos, the two parties involved, but also from Wall Street giants.
As one of the underwriters for Amazon's IPO, Paulson was very fond of this dynamic company, believing that Amazon's business model and growth potential were of great investment value.
But who could have predicted that life is unpredictable?
Amazon, which he highly values, is now facing off against another company he also highly regards.
Moreover, this company is backed by Ernst, whose companies are all far more valuable than Amazon is today.
Recalling Amazon's IPO party, Bezos made almost no attempt to hide his hostility towards Ernst.
Paulson happened to be present and naturally couldn't miss the unusual atmosphere between the two.
Paulson could never understand why Bezos harbored such strong hostility towards Ernst.
Fortunately, no direct conflict broke out between the two parties after the party, and there was no obvious overlap or competition in their business areas. The matter was gradually shelved and eventually faded away.
Unexpectedly, just a few months later, Ernst suddenly took action against Amazon, which must have hidden reasons.
"Based on all the information we have gathered so far, we are not yet able to accurately determine why Ernst made such a decision, and we have not found any clues that can directly explain the problem." The secretary shook his head and helplessly reported the latest progress of the investigation to Paulson, his tone full of frustration.
Upon hearing this reply, Paulson stopped signing a document, slowly raised his head, and looked sharply at his secretary, continuing to press, "And what about Amazon? What's Bezos's statement on this matter?"
"Bezos's reasoning is that he believes Ernst's subsidy war is deliberately targeting him personally and Amazon. However, we have learned through various channels that things are probably not as simple as Bezos says, and there must be some hidden details and inside stories that we don't know about," the secretary quickly replied.
Seeing that Paulson's eyes were still full of doubt and he was obviously not satisfied with the answer, the secretary immediately added, "I learned through Amazon's internal network that Bezos seems to have harbored great hostility towards Ernst for a long time."
"He made disparaging remarks about Ernst on more than one occasion, both in public and in private conversations with executives within Amazon."
"What's the reason? What's the root of all this?" Henry Paulson muttered to himself. His voice was soft, and his tone was filled with confusion and bewilderment. It sounded as if he were talking to himself, or as if he were seeking an answer from his secretary.
However, the secretary could only shake his head helplessly. He couldn't give any answer because he didn't know the crux of the conflict between the two.
However, dwelling on the reasons for the conflict between the two is no longer of great significance. The urgent task is to understand the current situation of Amazon in order to make accurate judgments and decisions.
So he said to his secretary, "Continue talking about the problems Amazon is currently facing, especially the business and technology aspects."
The secretary immediately opened the document she was carrying and reported to the leader with a serious expression, "According to the latest data we have obtained, Amazon's server capacity has basically reached its limit, and the peak load situation is very serious."
"I specifically asked internal and external technical professionals to assess and analyze the state of Amazon's servers. They unanimously concluded that if Ernst launches the PayPay book subsidy program on time tonight, the massive data traffic surge caused by a large number of users flooding into the Amazon platform could directly lead to the complete collapse of Amazon's servers, leaving them paralyzed."
The secretary then explained to Paulson in detail the series of serious consequences that could result if Amazon's servers crashed.
After listening to his secretary's report, Henry Paulson fell into a brief silence. He tapped his fingers lightly on the table, his mind racing as he analyzed the current situation.
After a moment, he slowly spoke, "Ernst will absolutely not give up easily unless Bezos is willing to admit his mistakes and make concessions. But judging from the current situation, Bezos clearly has no such intention."
In Paulson's view, Bezos was an extremely arrogant and highly competitive person.
Even if Bezos backs down, he will still choose to find a mediator to mediate the conflict between the two sides and ease tensions.
Goldman Sachs is undoubtedly one of the best choices to act as an intermediary, as it possesses the necessary strength, influence, and relationship with both parties.
With this in mind, a shrewd glint flashed in Paulson's eyes. He decisively told his secretary, "Immediately notify the company's trading department and have them take immediate action to start shorting Amazon's stock."
This is Goldman Sachs, a financial giant that stands firm on Wall Street. When it comes to commercial interests, it never judges the right or wrong of an event, nor does it consider so-called human relationships. Its only concern is whether the event is profitable and whether it can bring considerable profits to the company.
Paulson sees this as an excellent opportunity to short sell, and he will not let it slip by easily.
This morning, after the Nasdaq stock market opened, Amazon's stock saw a significant increase, with the price climbing steadily, presenting a seemingly prosperous scene.
On the surface, this appears to be a normal market reaction to the positive news of Amazon's significant increase in user numbers. Investors are optimistic about Amazon's development prospects and choose to buy Amazon stock, driving up the share price.
But in Henry Paulson's eyes, this was Bezos's greed; at this moment, he actually wanted to take advantage of Ernst's scheme to boost his own stock price.
The higher the stock price, the greater the drop will be if negative news emerges. It will be more difficult to salvage the situation then, and it may even trigger panic selling, leading to a complete collapse of the stock price.
"Okay, I'll go and arrange for the trading department to execute the short-selling operation right away." After saying that, the secretary immediately turned around and quickly left Paulson's office.
For the rest of the day, the market seemed calm and peaceful, with no unusual events occurring.
For Amazon shareholders, it was undoubtedly a wonderful day. They watched the value of their shares rise steadily, filled with joy and anticipation, eagerly awaiting the market close and hoping for a good return.
But disaster struck before they could even finish their delicious dinner. At 7:08 p.m. that evening, just as most people were preparing to enjoy their meal, Amazon's servers couldn't withstand the massive surge of data traffic and crashed completely.
The atmosphere inside Amazon's headquarters was extremely tense.
Bezos stood in the technology department's office area with a livid face, his eyes filled with anger and anxiety. The oppressive atmosphere emanating from him made all the employees in the technology department feel suffocated. Everyone lowered their heads, not daring to speak easily, for fear of accidentally angering the furious CEO.
"Clack clack clack—" A series of rapid high heel sounds came from afar, breaking the dull atmosphere in the technical department.
Bezos's secretary quickly walked to his side, carefully leaned close to his ear, and whispered, "Mr. Bezos, we've received news from customer service that the customer complaint hotline is about to be overwhelmed. Many users are angrily asking why the website is inaccessible."
Upon hearing his secretary's report, Bezos's face instantly turned from ashen to pitch black, and his emotions became even more agitated.
He whirled around, his gaze fixed on Martial, the technical director who was working frantically not far away. He practically roared, "How long will it take for the website to be back online? How much longer until our users can access the website normally?"
The traffic surge from the PayPay subsidy campaign was so intense that it completely exceeded Amazon's expectations, leaving them no time to react or respond.
When the technical staff noticed the abnormal traffic and tried to activate contingency plans to alleviate the pressure, the entire server system had already completely crashed.
Martial nervously wiped the sweat from his forehead as his hands flew across the keyboard, his eyes glued to the code and data flashing across the computer screen.
After a long while, he finally looked up, looking tired and anxious, and said to Bezos, "It will probably take about twenty more minutes before the website can return to normal operation."
Time slipped away quietly, second by second, in a tense and oppressive atmosphere. Every second felt like an eternity to Bezos and Amazon's employees.
Finally, after everyone's anxious wait, Amazon's website was restored to normal access.
However, the restoration of the website did not improve Bezos's mood. His face remained expressionless, even more somber.
He looked at Martial and asked in an icy tone, "When will the newly purchased server equipment be fully integrated and officially operational?"
Martial quickly replied, "The new equipment has been delivered to the company one after another, and the technicians are working overtime to install and debug it. Some of the equipment has already been put into use."
"But even if all the storage devices are installed, debugged, and put into use, it will probably be of no use."
Upon hearing this answer, Bezos frowned even more deeply, staring at Martial with icy eyes, waiting for him to provide a reasonable explanation.
Martial took a deep breath, composed himself, and patiently explained to Bezos, "Before this PayPay subsidy war, we had about 96 registered users on Amazon, and at that time our servers were designed to handle a peak of 90 users online at the same time."
"Based on normal market conditions and user habits, it is impossible for all users to access the website at the same time. There will always be a time interval. Therefore, our server capacity is more than sufficient and can fully meet the needs of users."
"But the situation is completely different now. Yesterday, our user base only increased by 11, but today it has surged by 23.6. No one can predict what will happen tomorrow or whether the user base will continue to grow at such an astonishing rate."
"More importantly, now over 80% of users choose to shop on our Amazon website at 7 p.m. every night, which is when the PayPay subsidy program starts."
"The scale and intensity of this concentrated access is comparable to Black Friday every year. The speed at which we add and upgrade our hardware is simply not keeping up with the pace of the explosive growth in the number of users."
At this point, Martial paused, a troubled look on his face, but he still mustered his courage and continued, "There is another very real and serious problem. Once we decide to continue this long-term struggle with Ernst, in order to cope with the ever-increasing traffic, we must continuously increase our investment in hardware and purchase more servers and storage devices."
"But what will we do after this surge in traffic subsides? The number of users is likely to drop significantly, and the hardware we've invested heavily in will be left idle in the server room due to insufficient user traffic. This will result in a huge waste of resources and a financial burden for the company."
After hearing Martial's words, Bezos fell into a long silence.
The financial problems Martial mentioned are indeed a huge challenge he has to face.
Although Amazon has only recently completed its IPO and has a certain amount of cash reserves, these funds are not intended for such unrestrained squandering.
In particular, Bezos must be accountable to the company's shareholders. If he acts arbitrarily due to a momentary emotional outburst, causing shareholder dissatisfaction and leading to a large number of shareholders reducing their holdings of the company's stock, which in turn causes the company's stock price to plummet, the consequences would be unimaginable.
Thinking of this, Bezos couldn't help but picture Ernst's seemingly gentle, but in his view, hypocritical smile full of provocation and smugness.
"You want me to bow down to you? Dream on."
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