They always say to be nice to people while you're on your way up, so they will catch you when you are on your way down.
Back in 1998, when Henry Blodget was a senior Internet analyst for CIBC Oppenheimer, he made a name for himself, and for Amazon, when he predicted that Amazon's stock would go above $400 a share. A month later, that is exactly what happened, putting both of them on the map. Now Amazon CEO Jeff Bezos is returning the favor.
Bezos, along with some existing investors, will be investing $5 million into Blodget's current project, Business Insider, it was revealed in an internal memo posted on the site Friday. Business Insider has previously raised $13.6 million, bringing its current total to $18.6 million.
Bezos's investment, Blodget revealed, came from a dinner the two had around a year ago, in which he expressed interest in the business. A month later, he said he was interested in investing in the company.
"Jeff's vision, leadership, and philosophy at Amazon have inspired a whole generation of startups and entrepreneurs, including me. Amazon has always focused on customers first, knowing that, if they do a great job at that, everything else will take care of itself. This obsession with customers and long-term focus are the reasons that Amazon has been so successful. And this philosophy is something that we very much want to emulate," Blodget wrote in the memo.
"Jeff's interest, and Business Insider's extraordinary success over the past year, are due to your efforts on behalf of our readers and our clients. We have improved and grown dramatically, and we were pretty good to begin with."
Blodget also revealed that the money the company is raising will be used to invest in numerous areas, including editorial, tech/product, sales and marketing, subscriptions, and events. In addition, Business Insider will also be expanding its office.
"Our goal is simple: To become the best digital business publication on the planet. We're making great progress toward that. And this investment will help us get there."
Business Insider was founded in 2007 by Kevin P. Ryan and Blodget, who was five years removed from being banned from trading on Wall Street. He was charged with civil securities fraud by the U.S. Securities and Exchange Commission after then New York State Attorney General Eliot Spitzer published e-mails that Blodget wrote working as an Internet analyst for Merrill Lynch that conflicted with what the firm was saying publically. He was fined $2 million, plus forced to pay a $2 million disgorgement.
Business Insider is widely seen as Blodget's way of rehabilitating his image and himself following the scandal. With such a big investment from such a prominent tech pioneer, it looks like the redemption might be complete.
(FULL DISCLOSURE: Technically, Blodget is my former boss, since I was once a writer for Business Insider. But in the 10 months or so that I worked there, I never met him.)
(Image source: http://www.wired.com)