What would you do if it was announced that you were one of the richest people alive? How about buying a Beverly Hills mansion for US$12.9 million to celebrate? That’s what Jeff Bezos just did when it was announced he took the first position in the top-ten list of America’s richest people with a cool US$90.7 billion in net worth. Bezos owns 81 million shares in Amazon Inc., the company he founded. His prominence was short-lived and he quickly went back to being number two behind Bill Gates just a week later. The net worth of the two men fluctuates with the stock value of the companies they own.
This is not the only house Bezos owns in Beverly Hills. In fact, the newly purchased house might better serve as a guest house for his existing Beverly Hills estate that he bought in 2007 for $24.45 million which sits on about two acres. The newly purchased home is on an adjacent property, so the parcels can easily be combined and used together. The new home is on a lot of about half an acre, so that brings the land Bezos owns in Beverly Hills to a magnificent total of 2.5 acres. That is more than enough land to build virtually any type of home.
LA Times reported the new home is 4,586 square feet with four bedrooms and six bathrooms. The house was not listed for sale and Bezos bought it in a privately negotiated off-market transaction. That is fairly modest size as Beverly Hills homes go, so this really could be the guest house for those who Bezos invites for a short visit.
Bezos started Amazon before the “dot bomb” that knocked out many of the internet start-ups. He was very lucky to have gotten enough traction and raised enormous amounts of financing before the tech-bubble burst. This allowed him to weather the many years of building out his company without making any profits. For a long time, investors have been using other metrics besides profits to calculate the value of Amazon shares. Even now, Amazon profits are modest because the company continues to extend its marketing and distribution systems globally. Amazon is headquartered in Seattle, Washington where Bezos also maintains a lavish estate. Like all billionaires, Bezos has a house just about everywhere he wants to go.
Amazon is a retail juggernaut that is creating a disruption in the normal retail marketing channels and challenging the likes of Walmart. Amazon continues to push its delivery and distribution capabilities so that in many major market areas orders are delivered the same day, often with free shipping, and within a few hours. There is not even the need or expectation to tip the UPS or FedEx delivery person. This convenience convinced millions of customers to stop driving to a retail big box store for shopping when by simply using a few click on the Amazon website, everything one needs can be ordered and then magically arrives.
We hope Bezos enjoys his new home and hopes he invites us to his housewarming party. We would love to stay in his new guest house.