Corporate ambitions: Amazon, the world’s most remarkable firm, is just getting started

Corporate ambitions
Amazon, the world’s most remarkable firm, is just getting started
from The Economist

Amazon, the former bookseller, is now a leading provider of cloud computing, TV programs and original physical products include Amazon Echo

Since 2015 its share price has jumped by 173%. It’s the fifth-most-valuable firm. But 92% of its value is due to profits expected after 2020

Investors anticipate a rise in sales from $136bn to $500bn (2016-17). It will have to grow faster than any company to justify its valuation

Microsoft has cloud-computing ambitions; Walmart has $500bn revenues & online services. All depends on Bezos. How can he achieve this goal?

Amazon’s unusual approach 1) time: Amazon is resolutely focused on the distant horizon. Mr Bezos emphasises two businesses: e-commerce & AWS

The more customers use Amazon’s services, the more Amazon can invest in new services: two-hour shipping; streaming video and music; Alexa

So long as shareholders retain their faith in this model, Amazon will be able to keep spending, which will keep making it more powerful

2) the breadth of activities: logistics; search engines; SNS; foods; all types of medias. Stockmarkets apply a “conglomerate discount”

Amazon could be a new kind of utility, providing the infrastructure of commerce: AWS; warehouse; air-freight; payment system; drone delivery

For now, Amazon is unlikely to attract the attention of regulators b/c US’s antitrust enforcers look at its effect on consumers & pricing

But Amazon may be accused of using its clout as a digital platform to extend its power to adjacent businesses like Google in Europe

If it become a utility for commerce, the calls will grow for it to be regulated as one, which will bring it into conflict with government

Amazon’s stock price (2001-2017)