Amazon Picks Arlington

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After months of deliberations, data dumps, short lists and wish-lists, Amazon has finally announced the location of its second headquarters, HQ2, and as it has been widely reported, “2” is the important detail here: Amazon has named not one, but two different cities, New York (specifically, Long Island City in Queens) and Arlington, Virginia, as the sites for its new major offices, which will sit alongside its current Seattle, WA location — making three global headquarters for the e-commerce and cloud services giant.

Separately, Amazon said Nashville will also become a new Center of Excellence for its Operations business. It will be focused on fulfillment, transportation, supply chain and related areas, with 5,000 jobs to be filled.

“We are excited to build new headquarters in New York City and Northern Virginia,” said Jeff Bezos, founder and CEO of Amazon, in a statement. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

Amazon says it will invest $5 billion ($2.5 billion in each location) and create more than 50,000 jobs across the two new locations, with more than 25,000 employees each in New York City and Arlington.

But it will also be getting some money, too. Specifically, “Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington,” and “Amazon will receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City,” the company noted.

The new Washington, D.C. metro headquarters in Arlington will be located in National Landing, and the New York City headquarters will be located in the Long Island City neighborhood in Queens, Amazon said.

It’s hard to say whether this was not just an elaborate marketing ploy, where Amazon was able to amass a huge swathe of data of a run of cities across the U.S. — which it can now use to build out other services in those regions more intelligently — rather than a genuine search for a location (or locations, as it turned out) that, at the end, of the day, felt very obvious when you think more about it.

The selection of New York and Washington, D.C. are notable nonetheless. In both cases, they are very strategic choices for Amazon:

Arlington puts Amazon in striking distance of DC — it is only three miles away from the city, Amazon notes — which is a huge market for the company in terms of government procurement and its AWS business, but perhaps even more importantly because of its increasing need to play nice with regulators. Positioning itself close to the halls of power gives it a much more immediate relationship, making it far less remote than the rest of the tech world.

At a time when we are seeing a lot of friction between the tech and government — Amazon getting called out specifically by President Trump, who also happens to hate the newspaper owned by Jeff Bezos, The Washington Post — it will be interesting if Amazon’s approach of promoting access to itself by way of proximity will give it a warmer place in Washington.

New York, on the other hand, gives the company a base much closer to the media industry and also the world of finance.

Amazon is shaping up to be a huge advertising behemoth — on par with Google and Facebook among tech players that have upended traditional advertising leaders. And it has also become a content juggernaut in its streaming business, alongside publishing and other areas where it was already strong. It so happens that NYC is the unofficial capital of both of those industries, advertising and content. Putting itself in the heart of all that is a symbolic move, but also a practical one as Amazon seeks to partner with more of these companies in its growth. Before it eats them all up, at least. :-)

What will be interesting to see is how Amazon develops and whether it will continue to view Seattle as its spiritual home and “real HQ,” or whether it really does make a significant shift of power and administration to these other locations. It’s worth noting that the company has made huge efforts globally to build large centers of operations and R&D, so it’s no stranger to globalization and distributed work.

More to come.

https://techcrunch.com/2018/11/13/amazon-hq2/