Amazon will pick New York City and Northern Virginia as its second and third headquarters to conclude a long-running bake-off among cities.
The company said in a statement that it will go with Long Island City in Queens and Arlington County's National Landing as new locations for its headquarters. The news was first reported by the Wall Street Journal. Amazon said it will invest $5 billion in the locations and hire 50,000 evenly split between the locations. In addition, Amazon selected Nashville as a center of excellence for its operations such as fulfillment, transportation and supply chain.
Nashville is 212 miles from Memphis, home of FedEx and a lot of fulfillment and operations talent.
Here's a look at some of the perks of going with two locations instead of two.
Spread the tax break love. By splitting HQ2 into two cities, Amazon lowers its total operation costs. New York and Virginia will give Amazon tax breaks. And by having an open interview process Amazon did advance scouting for other locations, which will incidentally have a tax break template for the future. Amazon gets $1.525 billion in tax incentives to create 25,000 jobs in Long Island City. Virginia will give Amazon $573 million in direct tax incentives to create 25,000 jobs. Nashville, Davidson County and Tennessee will provide $102 million in direct tax incentives to create 5,000 jobs.
Each location plays into Amazon's growth areas. Long Island City has easy access to Manhattan and the ad tech companies as well as advertising and media firms that come with it. Advertising is a big growth area for Amazon's "other" revenue category. Northern Virginia gives Amazon Web Services more proximity to the government agencies moving to the cloud. And oh yeah, Jeff Bezos owns the Washington Post. Nashville adds a distribution and operations base. Hiring will begin in 2019, said Amazon.
Amazon will be neighbors with FreshDirect and that could make an acquisition much easier. With its Long Island City location, Amazon will have a front-row seat to observe FreshDirect, an online grocer that's popular in New York City and has expanded to Philadelphia. FreshDirect would make an interesting purchase for Amazon and perhaps proximity matters.
Location diversification only makes sense. Seattle only has so much talent and Amazon's growth has led to skirmishes with the city. By diversifying its headquarters, Amazon gets more access to talent and cultures. There is quite the cultural difference between the east and west coasts. Average wage assumptions for the three locations are $150,000.
Amazon everywhere. The reality is that Amazon's distributions centers are all over the U.S. AWS data center regions are also widely dispersed. The HQ2 bakeoff may even lead to HQ3 in a few years. Amazon has the east and west coasts covered, but don't be surprised is some of the runners up in the HQ2 bakeoff get play later. Places like Austin, Texas and Chicago may also become expansion areas in the future.
Best Black Friday 2018 deals:
- Amazon Seven Days of Black Friday Deals: All-time lows on office devices
- Amazon Black Friday 2018 deals: See early sales on Echo, Fire HD
- Buy Black Friday 2018 deals: Deep discounts on Apple Mac, Microsoft Surface
- Costco Black Friday 2018 deals: $250 iPad, $200 laptops
- Staples Black Friday 2018 deals: PC sales include $150 Chromebook
- Target Black Friday 2018 deals: $250 iPad mini 4, $120 Chromebook
- BJs Black Friday 2018 deals: Laptop, desktop, and tablet sales galore
- Walmart Black Friday 2018 deals: $99 Chromebook, $89 Windows 2-in-1
- Dell Black Friday 2018 deals: $120 Inspiron laptop, $500 gaming desktop
- Jet Black Friday 2018 deals: $195 Roomba, $70 off Nest Cam Indoor
- Newegg Black Friday 2018 deals: $50 off Moto G6, $70 off Nest thermostat
- Office Depot Black Friday 2018 deals: $300 off Lenovo Flex, $129 HP Chromebook
- Sam's Club Black Friday 2018 deals: Buy a 4K TV and get a free Xbox One S
- eBay Black Friday 2018 deals: See early sales on Galaxy Watch, Chromecast
- Lenovo Black Friday 2018 deals: ThinkPad laptops and more
- Microsoft Store Black Friday 2018 deals: Ad showcases Surface, laptop deals
- Google Store Black Friday 2018 deals: Home Hub, Pixel 3, and Pixelbook
- HP Black Friday 2018 deals: Pavilion laptops, desktops
- Windows laptops Black Friday deals: Dell, HP, Lenovo
- Chromebook Black Friday 2018 deals: Dell, Google, HP
- Best tablet Black Friday deals: Apple iPad, Amazon Fire
- Black Friday 2018 iPhone deals: $400 iPhone X gift card, BOGO iPhone XR
- Black Friday 2018 smartphone deals: OnePlus 6T, LG G7