March 10, 2009 -- While working for a hedge fund doing research on the Internet 14 years ago, Jeff Bezos had an idea, a big idea: The Internet, he thought, would be a good place to sell books.
He borrowed $300,000 from his parents -- who he said had one question: "What is the Internet?"
With his wife at the wheel, Bezos, the CEO of Amazon.com, headed west to Seattle, writing the company's business plan as he went.
Bezos launched Amazon.com, now a multibillion-dollar company, from his garage, and revolutionized the sale of books.
But while Bezos built his company around books, today he said he thinks that books in their current form are becoming obsolete, and he's giving them a shove off the shelf with a gizmo that does away with the need for paper and ink.
But Bezos says he's not announcing the death of the book.
"I am here to announce the birth of Kindle 2," which he thinks can co-exist with old-fashioned books -- for now, at least.
The Kindle 2 is the latest E-reader, manufactured and sold by Amazon. Books are downloaded to the device, which can hold up to 1,500 titles at a time. It is sleek and convenient, but not cheap, costing a whopping $359.
"You can do things with Kindle which you could never do with a paper book," he said. "For example ... there are 240,000 books on Kindle including 104 of the 111 New York Times Best Sellers. These are books people are reading. And when you see an author being interviewed on TV on a show at night, 60 seconds later you can be reading their book."
"Look, nothing goes away, but things do change," Bezos said. "There are things we have nostalgia for and I do, too. Like almost everybody I grew up with -- my parents reading to me as a small child.
"If you go back 14 years, no one was asking for an online bookstore," he said.
Bezos says he picks up a book for its content, not because of the physical object itself.
"It's the narrative," he said, "it's the story that's being told. And the book, the physical object is a technology and all technologies improve over time and that's what we're trying to do with Kindle."
Over time, Bezos explains, E-books will be the only way people read books. And while the notion may sound far-fetched, he has a pretty good record of predicting the future. Early on, Bezos understood the key to success wasn't just what Amazon sold, but how they sold it.
"We operate Amazon as a customer-centric company," he said. "We try and figure out what customers want, and then give it to them. And you need to listen to the customers to do that, but you also need to invent on their behalf. [It's] not a customer's job to invent for themselves.
"Books are a 500-year-old technology," he said. "It's had a really good run."
Kindle 2 Part of Amazon's Long-Term Focus
Bezos is one of America's big thinkers when it comes to the future of commerce and the American economy, and he has a lot to say about the lessons learned at Amazon and how they might help America out of its current economic woes.
He is also one of the few CEOs in this country right now who can point to his balance sheet and boast a healthy profit last year.
In 2008, sales were $19 billion, up more than 25 percent from the previous year. As for 2009, he says, "you'll have to wait and see."
"We're not changing our strategy," he said. "We're going to keep doing the things we do. And I think the way we run the company, by focusing on those very fundamental things like low prices [and] convenience; I think those things work in all economies."
Bezos says the lessons learned can apply to the current economic situation.
"Some of the things that we have been able to fix and do and prevent could never be done with a short-term mentality," he said. "And I see some companies who are very focused on the next three months. ... In the long-term, I am super optimistic about our economy, and our nation, and actually the whole world. And the reason is, everywhere I travel in the world, I meet people who are so inventive, so engaged in building a better future. ... And our world is going to get so much more productive over time because of that inventiveness. For me, it's very motivating."
And despite Amazon's new invention, Bezos, who spoke to "Nightline" in the main reading room of the New York Public Library, still sees a future in libraries.
"Well, I think first of all, these books that you see will be digitized, so they will be accessible from anywhere, and that can only be a good thing," Bezos said. "Libraries have always been embracers of technology and that's important. If you want to maintain, it's dangerous not to evolve. If you want to ensure your extinction [then] cease to evolve."
Kindle: 'Very Seductive'
The Kindle may have found an unlikely fan at the library.
"I love it," said Paul LeClerc, the head of the New York Public Library. "Well, how could I not? It's highly efficient, very user friendly. Very seductive. And the first time I turned it on, I found it very difficult to turn it off."
LeClerc, however, was happy to prove that all books are not created equal. Deep in the rare books section he showed off some of the library's treasures, books the Kindle will never replace.
"You couldn't touch the paper, you couldn't turn the pages. You couldn't appreciate the design of the book itself," he said.
"Look, I'm as nostalgic as the next guy," Bezos admitted. "I grew up with books, too. And I'll tell you, I did get curious about, why do I like the smell of a book? So I did some research on this, to find out, what is the smell of a book? And it's mostly the ink, the glue, and a little bit of mildew. And I asked myself, are those intrinsically delicious smells and I don't think they are.
"What it is, is ... the association. You've entered so many pleasant places, authors' worlds, and while you were entering them, that pleasant mental state, you've associated that with this smell."
But with books being Amazon's primary sell, are they in some danger of putting themselves out of business?
In the end, Bezos says he'll side with the customer.
"We're going to do the best job we can with physical books, and the best job we can with Kindle," he said. "And then we'll let customers decide."
May the best book win.