https://www.forbes.com/sites/daviddo.../#3ba620e24ed9
Amazon Gets Neighborly With Madison Avenue
By David Doty
November 26, 2018
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It’s not too hard to figure out why, out of all the cities in the US, Amazon made a calculated decision to choose Long Island City for one of its two new “HQ2s.” It’s just across the East River, in a direct shot on the subway’s No. 7 train, from Grand Central Terminal—and Madison Avenue. That means it’s within an arm’s reach of the nation’s headquarters for agencies, ad content creators, media companies, and an immense pool of ad tech talent, stuff you just don’t find in such large numbers in Silicon Valley. And who can blame Amazon? By moving to LIC, Amazon has made more than a physical move; it’s made a strategic move to focus on its rapidly growing business: advertising.
Amazon’s overall growth has been on a rocket-fueled trajectory these last few years. But if you take a closer look at each business segment, you’ll see why this strategy to put emphasis on its advertising business makes sense for the mammoth e-tailer’s future. Subscriptions to Amazon Prime look to be flattening. Amazon missed revenue expectations in the third quarter, and its fourth-quarter outlook (ahem, the holiday season) has been trending below expectation.
Then there’s its advertising business. In the third quarter, Amazon brought in nearly $2.5 billion in advertising revenue. CNBC has been saying that the year’s total could add up to a whopping $10 billion. That’s up from $2.8 billion in all of 2017—an astounding 257% increase in a year. That’s a growth rate faster than, for example, mobile advertising itself has ever seen.
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Advertising is a high-margin operation with comparatively low overhead (no warehouses) and has been growing for Amazon this year at an almost magical speed and expectations are that it will outperform Amazon Web Services income by 2021. What’s more, the company’s advertising play is said to be already taking a bite out of the other behemoths in the game. As J.P. Morgan analyst Doug Anmuth said, “Google’s recent slump can also be blamed on ‘increasing concerns of direct competition with Amazon’s fast-growing advertising business.’” Anyone who observes the advertising industry should be keeping in mind that, despite Amazon’s tremendous ad revenue growth, it’s only getting started in this effort and has barely scratched the surface when it comes to unleashing product and sales resources.
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Positioning a new headquarters overlooking the towers of the mecca of the ad world is a no-brainer.
...Recognizing Amazon’s clear rise, and strategic intent to build a walled garden of advertising and product and data, is vitally important because it should relieve this industry of its myopia and inspire every one of us to do better, to think bigger, to “open the aperture,” as it were. Every new Amazon ad product, every overstuffed 7 train leading people to and from the literal Madison Avenue, is a persistent reminder that whoever’s on top will eventually fall down. Yesterday it was the Don Drapers who were in trouble. Today the Google/Facebook hierarchy is under threat of being overthrown. Tomorrow it’ll be Amazon teetering against the competition.
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http://gothamist.com/2018/11/27/prot..._m.php#photo-1
Protesters & NYC Politicians Vow to 'March Forever' Against Amazon Deal
BY GWYNNE HOGAN
NOV 27, 2018
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Protesters and local politicians vowed they’d “march forever,” if the terms of Amazon’s deal with Mayor Bill de Blasio and Governor Andrew Cuomo to build a second headquarters in Long Island City aren’t walked back.
Dozens of protesters draped in rain ponchos and shielded with umbrellas gathered in the pouring rain in Court Square Tuesday evening chanting, “in the rain and in the snow, Amazon has got to go.”
Councilmembers Jumaane Williams and Jimmy Van Bramer rallied the crowd, along with the former City Council speaker Melissa Mark Viverito, State Assemblyman Harvey Epstein and Councilwoman Helen Rosenthal, who led the group in a chant of “Bullshit.”
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Councilman Jimmy Van Bramer, who represents Long Island City, took issue with what he saw as one of the worst parts of the deal—a $505 million cash grant from the state for Amazon to build the headquarters.
“Jeff Bezos is rich enough to build any building he wants to build. Why are we giving him $500 million dollars in cash grants?... That’s outrageous,” he said, adding, “We will march forever until we get what we deserve.”
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Beyond the $505 million in a cash grant from the state, Amazon will get $1.2 billion in tax credits off wages for employees and won’t have to pay property taxes—instead putting that money toward an infrastructure fund for the surrounding area. Amazon will also be eligible for additional tax breaks at the federal level because the area is a designated "Opportunity Zone."
De Blasio and Cuomo insist the deal will create more than 100,000 direct and indirect jobs, more than $4 billion in state tax revenue, and 13.5 billion in city tax revenue. But other local leaders say the state has too much control over the scope of the project, and the city too little oversight. In its current form, the state will take control of all of the waterfront property for the project, bypassing the City Council.
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On Monday, in his weekly appearance on NY1, de Blasio was asked if he planned to “steamroll over the Amazon pushback,” or whether there was a chance the deal could still be killed.
“I believe that the merits are overwhelmingly clear and that the pathway to get this done is straightforward,” the mayor replied. “I think you’re going to see critique, I think you’re going to see oversight, but I believe it will move forward.”
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https://www.crainsnewyork.com/real-e...hink-tank-says
Amazon deal a boon for city priorities, think tank says
Regional Plan Association outlines areas where company’s influence can bolster key projects
MATTHEW FLAMM
November 26, 2018
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The Amazon deal will bring 25,000 jobs to Long Island City at a cost of nearly $3 billion in subsidies. But according to a report released Monday, the jobs are just the beginning. There's a chance that the ecommerce giant will align itself with the city and help push for greater investment in projects that would benefit both public and private interests.
That, at least, is the argument the Regional Plan Association is making in its new white paper, which targets three areas—affordable housing, expanding mass transit and protecting Long Island City from sea-level rise—where Amazon could lend a hand.
"The best way to make sure this deal is a win for all is for the city and state to continue to invest in infrastructure and get Amazon to help make it happen," the report says.
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Tom Wright, the RPA's chief executive, compares the Amazon deal to Disney's mid-1990s agreement to purchase the New Amsterdam Theater on 42nd Street and invest in Times Square. Eventually, he said, Disney and the city had the same goals.
"The city and Amazon are now going to be moving necessarily in the same direction because they need the same things," Wright said.
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