At 20 Amazon is bulking up. It is not yet slowing down

http://www.economist.com/news/briefing/21604559-20-amazon-bulking-up-it-notyetslowing-down-relentlesscom

by rahimnathwani • 12 years ago

89 29 12 years ago

economist.com

jessaustin• 12 years ago

Interesting: how little was said about AWS.

rgbrenner2• 12 years ago

AWS was 4% of Amazon's revenue for 2013. I think about 4% of the article was about AWS too... Seems appropriate.

omonra• 12 years ago

That said, AWS has something like 80% profit margin [1] vs almost no margin for the rest of the business :)

[1] http://venturebeat.com/2013/09/05/amazons-mountain-of-margin...

theworst• 12 years ago

Bezos has said he believes AWS could be amazon's biggest business.

http://techcrunch.com/2013/11/13/jeff-bezos-believes-aws-cou...

aragot• 12 years ago

Small, but relevant for history. In 2006, AWS was the first cloud. At the time, a datacenter with extremely low prices, super-massive customer base and where you could spin off/shut down instances on demand was crazy. The impact changed the way we think about computing.

I admit that, had they not been there, someone else would probably have invented it. Some dodgy website hosting service, for example.

mathattack4• 12 years ago

I'm amazed by Amazon. Some of their moves follow a playbook. Books -> Clothes -> Diapers. A non-technical CEO turning the company into an API machine that outsources it's own technology... Every textbook would say crazy, but he's on to something. Makes one wonder about the drones.

donflamenco• 12 years ago

Bezos graduated with a CS degree from Princeton. I wouldn't call that non-technical. He is extremely sharp.

mathattack4• 12 years ago

Monstorously smart. I consider him one of the top CEOs of all time because he succeeds on so many levels: Business design, technology enablement, hiring, surviving market ups and downs, investor relations...

I had (wrongly) assumed he was a business person first since he had most recently worked at Bankers Trust and DE Shaw. Thank you for the clarification. This explains his insights that would drive AWS.

coldtea2• 12 years ago

I'm amazed by Amazon

I, on the other hand, am underwhelmed.

Their AWS services is a pretty cool tech and business.

But as for their other stuff:

1) Their core business (the store) barely makes any profit. Their profit margins are razor-thin, and until recently operated at a loss IIRC.

2) Their ebooks and music store are ho-hum.

3) Their hardwares, Kindles (Fire and plain) are simply loss leaders for content sales. Which (1) is not that profitable in itself anyway. Not that difficult to sell stuff like readers and tablets at a cost or slight loss.

Anything else I forget about?

jib• 12 years ago

That's the genius though. They are the ultimate Walmart, and that is one of the best things to be. Even better, they are Walmart with the option to expand into anything, because they don't have the stigma of being cheap. They can sell luxury goods (at small margins), highly complex technical solutions (at small margins) etc etc. What Amazon have managed to do is essentially to brand a bunch of things that were highly commoditized before. The potential in that is amazing, and almost scary.

aquadrop• 12 years ago

I think all that things are considered investment in the future by Bezos. Amazon will probably eclipse Apple, Microsoft, Google etc in 5-10 years.

ubob• 12 years ago

Amazon MWS, their horrible piece of an API. If I were to give someone an example of a bad API it would be Amazon MWS, because it has everything:

-XML only (which is often strucured in the most obscure ways, and inconsistent through the API)

-shared reqeust throttling across all authorized applications (which turns the API from "barely useful" to "I can be lucky if I get a valid response")

-inconsistent across all marketplaces (of course I can't use the "fullfilmentLatency" attribute on the US-marketplace like in the rest of the world)

-unreliable (yeah Amazon, just ignore the list of prices I just sent you and mark them as processed, I am used to it)

That and many more things(e.g. hiding competitors in the responses) makes the API so useless that many people resort to just scraping the Amazon pages. An API that is so bad that nobody uses it is almost as bad as none at all.

I'm sorry, I didn't mean to rage but seeing that Amazon treats 3rd party developers and merchants like shit while doing everything to make the customers happy always makes my blood boil.

mistermann• 12 years ago

1) Their core business (the store) barely makes any profit. Their profit margins are razor-thin, and until recently operated at a loss IIRC.

The choose to do this. I read an excellent article on it some months back but can't find it again, but suffice it to say there is far more to their low margins than you think.

TomDavey• 12 years ago

The Kindle e-readers are excellent products in their own right. With the Paperwhite they've perfected the category IMO. The software -- e.g., the Xray feature, and the overall gesture UI -- and the hardware are equally good.

holri4• 12 years ago

Reasons not to buy from Amazon:

https://stallman.org/amazon.html

yeukhon• 12 years ago

Hmm. Every time I see the name Stallman I just conclude it's all about materials not distributed freely. Essentially, don't buy anything from anybody who don't support free redistribution (iTunes, App store, Play Store, etc).

holri4• 12 years ago

To conclude something from a name without reading the works and criticizing it factually is just prejudice.

At 20 Amazon is bulking up. It is not yet slowing down

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