MISSED OPPORTUNITY

In 1998, Amazon bought the website poised to become Facebook. Then they killed it.

Somewhere, Mark Zuckerberg is wiping sweat from his brow and sighing with relief. Had Amazon developed the promising social networking site it acquired in 1998—when Zuck was just 14—instead of merely absorbing it, the internet might look very different today.

PlanetAll was arguably the first social networking site, and its similarities to Facebook are eerie—down to the Harvard origins. Billed as a platform “to make the world a smaller place by helping people effortlessly find and stay in touch with friends, colleagues, and groups important to them,” PlanetAll’s goal was world domination.

By the time Amazon acquired it, the company was two years old and had 1.5 million users and was adding thousands more every day. In a statement, Jeff Bezos said, “PlanetAll is the most innovative use of the Internet I’ve seen.”

Two years later, it was basically a memory. Eight years after that, Facebook became the largest social network in the world.

PlanetAll cofounder Warren Adams, a native of Montclair, N.J., dreamed up the idea way back in 1986. He was president of his fraternity at Colgate University, and a social butterfly who wanted to keep in touch with the friends he’d made as an undergrad. After finishing Harvard Business School in 1995 and starting work as a consultant, he met his future business partner, Brian Robertson. Together, they signed a lease on an office in the back of St. Peter’s Episcopal Church in Cambridge.
Adams lived like a prototypical startup founder. He slept on a futon at the office and showered at the YMCA across the street. On the rare days he did commute from home, he Rollerbladed. He had two pairs of pants and one jacket, remembered his wife, Michelle Toth, whom he met in the same office building.

By 1997, PlanetAll had 340,000 users and 7,000 more were joining every day, according to the Boston Globe. Nearly one-third of users were from outside North America. Fiscal year revenues topped $500,000. That summer, the company raised $4.5 million in its first investment round. Users mainly joined to find friends with whom they had lost touch. It sounds strange today, but that was a novel idea. Other major internet players, such as GeoCities, which PlanetAll would later partner with, connected mostly strangers.

After signing up for a free PlanetAll account, users filled out their profiles with personal information—name, job, interests, etc. Once they established contact with friends, who they could find through alumni or occupational groups, they could send messages, RSVP to events, and get birthday reminders. “Tell it where you went to school and you’ll get a list of your classmates who’re also signed on to the service. Request a link to an old drinking buddy and, pending his approval, each of you can access the other’s contacts,” wrote Wired in 1999. Sound familiar?

Amazon.com, then just an online book retailer, saw an opportunity. In August 1998, it purchased PlanetAll for 800,000 shares, the equivalent of roughly $90 million. The company insisted it wanted to buy PlanetAll for its user base—but not for social networking. Bezos denied rumors that Amazon would turn into some sort of “portal,” with email and news features. Yahoo was already doing that. Instead, as he told the Boston Globe, Bezos wanted to use PlanetAll’s technology to create a community of regular customers. Amazon told Wired it hoped to create automated gift shopping. It wanted to market more books, and that was it.

At first, Amazon let PlanetAll remain in its cute Cambridge offices. But founders Adams and Robertson, along with CEO Jim Savage, moved to Seattle the following year. Savage was all in. After the sale, he hoped everyone in the world who was online would sign up for PlanetAll: “This works a lot better if everybody’s in it. You have to think big.”

By 1999, PlanetAll had over 2 million users and 100,000 groups. But in July of 2000, Amazon shut it down and incorporated a couple of its features into “Friends” and “Favorites” tools. An email to customers read, “We are pleased to announce that we have completed the integration of the key e-commerce related features of PlanetAll.com into our main site at Amazon.com… Although PlanetAll.com will be going away, you’ll still be able to enjoy some of the tools that help you keep in touch with like-minded folks.”

It took eight years for Bezos to realize his error. By 2008, Facebook membership had surpassed MySpace, and in May of that year, Amazon filed a thirsty patent application for a “social networking system.” The patent, which was created by PlanetAll cofounders Adams and Robertson, read:

“A networked computer system provides various services for assisting users in locating, and establishing contact relationships with, other users. For example, in one embodiment, users can identify other users based on their affiliations with particular schools or other organizations.

“The system also provides a mechanism for a user to selectively establish contact relationships or connections with other users, and to grant permissions for such other users to view personal information of the user.

“The system may also include features for enabling users to identify contacts of their respective contacts. In addition, the system may automatically notify users of personal information updates made by their respective contacts.”

The U.S. Patent and Trademark Office approved the patent in 2010. But it was too late. Facebook was already a thing, and as of June 2017, the king of social media sites serves 2 billion users worldwide and has a market capitalization of $435 billion.

Maybe Bezos was just spouting sound bites when he called PlanetAll “one of the most important online applications.” What’s clear is he didn’t see PlanetAll’s potential in relation to colossal future interest in social media. “For whatever reason, Jeff Bezos decided not to pursue social networking,” wrote Fortune in 2011, with plenty of Facebook-tinted hindsight, “but adapted some of PlanetAll’s features into Amazon—like the one that tells you that others who attend, say, the Harvard Business School are also reading Inside of a Dog.”

A few critics insist it wasn’t all Amazon’s lack of foresight. Former PlanetAll employee Jeff Mather blogged in 2011, “Unlike Facebook, the web wasn’t mature enough to keep you on the site long enough or to make you want to come back. It just wasn’t interactive enough. No chat. No posting of photos or videos. No good way to see a stream of status updates. [The] web just wasn’t ready to be used as a platform.”

But it wasn’t a total loss for all involved. In the 19 years since it acquired PlanetAll, Amazon’s share price has gone from roughly $14 to $975 per share. If they are still owned, intact, the 800,000 shares the PlanetAll founders received would be worth north of $6 billion in Amazon stock today. Adams and his wife spent some cash on a property in Martha’s Vineyard, then traveled the world for a year. He would go on to found Patagonia Sur, a land acquisition company with conservationist values. It owns 60,000 acres in South America, plants trees, and offers eco-lodge memberships.

Robertson joined the executive suites of solar companies like SunEdison and Amonix. He died in a plane crash in 2011; he was the pilot and only person aboard. The year before, he had reminisced about PlanetAll’s fate. “It exhibited [a] very similar growth curve as Facebook,” he observed. “These things need critical mass; if you don’t care for and nurture it, or take it away, it dies.”

Today, Jeff Bezos is worth $83 billion.

This article was originally published on Timeline. Sign up to their newsletter here.

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