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How Henry Blodget Convinced Jeff Bezos to Give Him Millions

Spoiler: It wasn't very hard.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Back in the first tech bubble, Henry Blodget became famous by betting big on Jeff Bezos. Now Bezos has bet on Blodget, by putting his own money — twice — into Blodget’s Business Insider site.

How’d that happen? And why’d that happen? And what does Bezos want from Blodget — beyond advice on the Washington Post, his other content play?

I’d never heard Blodget talk about this, so I asked him, as part of an interview we taped recently for Re/code Radio. Here’s an edited transcript of that part. (Disclosure! I, too, own part of Business Insider. Jeff Bezos has many more shares than I do.)

Peter Kafka: How did Bezos end up investing in you?

Henry Blodget: Basically, Jeff reached out to me a few years ago and said, “Do you want to have dinner?”

[I said] “Of course! That sounds great.” I hadn’t seen him for 10 years.

We had a great two hours. We talked about a whole bunch of things. And one of the things that came out of that dinner is there are a lot of differences, but also a lot of similarities, between what Amazon is doing in commerce, and what we and many others are doing in digital media. And he’s very intrigued by the business. And some of those similarities caught his attention.

And some months later he reached out and said, “I’d like to invest.” And my reaction was, “Send the check! It sounds great!” Which is basically what happened.

Everyone was startled when he bought the Post. To me, what that shows is that he’s very interested in what is going on with content. He loves reading. He’s already making a lot of subtle changes at the Post, which I think is good for the publication. I think it will help them get through this transition. He’s definitely engaged in journalism.

So what’s his relationship with your site now? Is he offering advice on headlines?

He’s definitely not helping us write headlines. I’ve talked to him several times about what’s going on. He is a wonderful model for anybody who wants to build a business that becomes great and sticks around for the long haul.

You can listen to what he says. You can also just look at what Amazon does, and the way Amazon behaves, relative to a lot of other companies.

But is he giving you any specific input?

What he said to me, which was so powerful for me, was, “Look, you’ve got to understand: Relative to all the companies that are started, you guys have been wildly successful. You’ve figured this thing out. But just remember that effectively, you are just a little flame. And the flame has been kindled, and it’s in the palm of your hand, and all around you, these big winds are swirling. And if you’re not paying attention, they can snuff that flame out, immediately.” That was powerful for me. I shared it with the team immediately. I said, “This is the image.”

So he’s not giving you headlines. He’s giving you metaphors.

Yes — business metaphors, not journalism.

You can hear the rest of my chat with Blodget in the widget below — our conversation starts at around the 14 minute mark. But really, you should listen to the whole show, featuring Kara Swisher and many other members of the Re/code family.

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