Who knew that Amazon C.E.O. Jeff Bezos chose his wife in part because he felt she could, if necessary, get him out of a third-world prison? Long after most other dotcom founders have moved on, Bezos, 44, remains one of the internet’s success stories. In 2007, his business pulled in revenue of nearly $15 billion, up 38 percent from the previous year. Amazon’s stock keeps rising, and Bezos becomes ever richer. His estimated worth is about $8 billion.

The 13-year-old company is the biggest online retailer in the world, but recently Bezos has taken Amazon beyond retailing; it now sells its computing, warehousing, and delivery services to other companies. Even tiny startups can rent just about anything Amazon does. And the company made news with its debut of the Kindle, a slim electronic book reader with iPhone-like cachet.

Yet Bezos is not without challenges. Slowing consumer spending could put the kibosh on Amazon’s growth, even though it just hired 500 more employees and is building a new distribution center. The company is also pushing hard into the market for digital downloads of music and movies, taking on entrenched leader Apple. Most ominously, Google recently announced that it would launch a competing, and free, service for small businesses called Google Apps.

Condé Nast Portfolio contributing editor Kevin Maney interviewed Bezos before a packed auditorium at New York University’s Stern School of Business. The following is an edited transcript. (Watch video.)
 
You’re hiring 500 people and building a new distribution center. Aren’t you worried about the economy? The fourth quarter of last year was tough for a lot of consumer companies, and we had a terrific Q4. We’re probably not a good leading indicator for the economy as a whole, just because we don’t have a lot of operating history.

Let’s talk about the Kindle. What do you want it to be? Any book, in any language, ever in print should be available in less than 60 seconds. We worked on it for three years. It’s been selling out since being released.

You sold how many? You asked that so innocently, but you know I’m not going to answer. We have a long-standing practice of being very shy about disclosure, and I’ll stick to that practice. The Kindle has substantially exceeded our expectations.

Every effort at e-books has failed. Why should this one work? We decided we were going to improve upon the book. And the first thing we did was try to determine the essential features of a physical book that we needed to replicate. The No. 1 feature is that it disappears. When you’re in the middle of reading, you don’t notice the ink or the glue or the stitching or the paper—all of that disappears, and you’re in the author’s world. Most electronic devices today do not disappear. Some of them are extraordinarily rude. Books get out of the way, and they leave you in that state of mental flow.

How do you improve on that? We looked at things that physical books could never do. One of them is that you can look up any word that you’re reading. It used to be that if I came across a word that I didn’t know, I guessed from context. I’m astonished at what a bad guesser I am. Now that I’m looking up the words, I’m like, “Huh. Really?”

When you founded Amazon, how did you decide to sell books? I went to a catalogers association and started looking at product categories that do well by mail order: No. 1 was apparel, and gourmet food was very high. Way down on the list, like No. 20, was books. But there are more items in the book category than any other. We thought we could build a store with a complete selection. Big book superstores have about 150,000 titles. When Amazon launched in 1995, it had a million. With that kind of founding idea, we drove across the country.