After a lengthy selection process Amazon has picked Long Island City in Queens, New York City as well as Arlington, Virginia, a Washington suburb, as its second headquarter locations.

The move makes sense from several perspectives. Locating on the East Coast, Amazon will be able to attract the highly educated not interested in moving to the Northwest. Both NYC and Washington are natural targets due to both their existing workforce as well as general preferences of top university graduates to move into the area. However, both locations are sufficiently far away from busy locations to provide the company with opportunities to grow at these locations.

Besides the locations, splitting their co-headquarters could likely entirely be explained by local governments’ incentives. Undoubtedly, tax breaks and general goodwill towards the company from two different entities for half a headquarter each exceeds what Amazon could have attracted from a single location. Moreover, the split likely dampens the negative effect on housing affordability in the chosen locations.

The reportedly 50.000 new employees, many with graduate degrees, would promise a boost to each local economy. What is more, there is hope and speculation that Amazon would attract other business to settle in the area. This led more than 200 US communities to pitch to Amazon.

In the end, the company’s leaders chose to locate close to the main circles of power in the nation. A move that potentially also signals that Amazon is seeking physical proximity to political decision makers.

Lastly, the enormous recent growth of Amazon and similar companies, who bet on consumer data to optimize targeted advertising as well as pricing, creates an enormous demand for highly skilled graduates from quantitative sciences with data analytics capabilities. The reported average salary of $150,000 makes Amazon (among others) a more and more serious competitor to academia as well. The Chronicle of Higher Education quotes me briefly on this last point.