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Amazon’s Tale Of Two Cities

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After a year of speculation over the location of Amazon’s second headquarters, new information suggests e-commerce giant has made a decision

After a year of heated speculation and even more intense lobbying by a number of cities in the running to host Amazon’s second headquarters, reports emerge that the e-commerce giant is now going to split up its HQ2.

After disclosing 20 finalists out of 238 cities in January, the Wall Street Journal and the New York Times, both citing unnamed sources, now say this is a tale of two cities.  

“The company is nearing a deal to move to the Long Island City neighborhood of Queens, according to two of the people briefed on the discussions,” NYT reported Monday, adding that “Amazon is also close to a deal to move to the Crystal City area of Arlington, Va., a Washington suburb, one of the people said”.

Effectively, that would mean that instead of getting 50,000 employees in a single ‘headquarters’, the ‘winning’ cities would each get 25,000, but as NYT points out, the two above-mentioned venues are already home to more Amazon employees than anywhere outside of Seattle and the Bay Area.

But there’s another game being played alongside this one—a game that suggests anti-trust threats from Washington are playing a role in Amazon’s HQ2 venue choice.

In an interview with Axios, Trump recently raised the specter of antitrust action against Amazon, Google and Facebook. Related: Deloitte Paves The Way For Next Gen Digital Identification

"I leave it to others, but I do have a lot of people talking about monopoly when they mention those three in particular," Trump said. “We are looking at [antitrust] very seriously ... Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."

Trump’s relationship, particularly with Amazon, has been hard to nail down precisely. While he says Amazon has been profiting at the expense of the U.S. Postal Service, and has raised concerns of a “monopoly”, he also seems bent on allowing its CEO, Jeff Bezos, to become one of the most influential tech figures in Washington, while at the same time attacking Bezos personally for his ownership of the “Amazon Washington Post”.

Moving closer to D.C. would help with lobbying efforts, clearly. While moving to, say, Toronto—one of the finalists--won’t score any points with a president trying to make good on a promise to create more American jobs.

But more to the point, as Citi’s Mark May wrote in a note to clients carried by Axios: “By separating the retail and [cloud] businesses, Amazon could minimize or avoid the risk of increased regulatory pressure”.

Bezos is all about cooperating with Washington these days, and particularly with the Department of Defense (DoD), even if the Washington Post remains exceptionally critical of every move Trump makes.

In this game of smoke and mirrors, Amazon is favored to win a Pentagon contract worth as much as $10 billion—a contract that will make whoever wins it one of the biggest federal contractors in the country and responsible for moving all of the DoD’s classified and unclassified data on to the cloud.

By Michael Scott for Safehaven.com

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