The Amazon effect
July 2021 is a big month for Amazon founder and former CEO Jeff Bezos. Not only did he resign as CEO of the company in which he built a $ 1.63 trillion empire, it will also fly into space during the first crewed flight of its New Shepard rocket. And yet, space travel is just the most recent of Bezos’ groundbreaking efforts. Bezos and his company have revolutionized American businesses, expanding their reach to almost everything from retail to media, healthcare and cloud computing.
Brad Stone– the author, more recently, of Amazon Unbound: Jeff Bezos and the invention of a global empire– explains that the e-commerce giant has often seemed “loosed from the laws of business gravity”. As most companies eventually stabilize, Stone says Amazon has defied those business standards by continuing to grow rapidly. Stone, a senior editor at Bloomberg News with years of experience reporting on the company, examines Amazon’s various successes and Bezos’ considerable influence. Specifically, it traces Bezos’ transformation from a frugal tech nerd to a buff billionaire whose high-profile divorce made headlines. But what exactly explains Amazon’s extraordinary rise? If there’s one thing that drives Bezos, Stone points out, it’s his deep fear of stasis.
Three takeaway dishes:
- Despite being the least customer-oriented sector of the business, Amazon’s web services are the most profitable, bringing over $ 13.5 billion per year. The subsidiary even allows them to take advantage of their competitors: Netflix, Disney and Apple all use Amazon Web Services for the backend of their operations. As Stone notes, the cloud computing service allows the company to benefit “at every level of the ecosystem.”
- In 2013, Jeff Bezos bought The Washington Post for $ 250 million. After just three years under Bezos, the once struggling newspaper become profitable. “He completely reversed that atmosphere of melancholy decline,” says Stone. Stone also assumes that Bezos’ decision to buy the To post was probably fueled by a desire to expand its presence in Washington. But his ownership of the newspaper put him at odds with President Trump, who disliked his administration’s newspaper coverage, later dubbing him “Jeff Bozo.” Hostility peaked with Trump reportedly withdrew the $ 10 billion JEDI IT contract from Amazon in retaliation.
- Amazon has long been accused of violating antitrust laws, and Stone points out that the company “has taken a considerable image hit” over the past year. During the pandemic in particular, “we started to see it more as a monopoly that deserved regulatory and legislative attention,” he says. And indeed, in May, the District of Columbia Attorney General Amazon sued for overwhelming unfair competition. While Amazon may be forced to change some of its practices, Stone speculates that policymakers will find it difficult to significantly change its trends. He explains that “there is a market definition challenge,” according to which regulators have so far not clarified exactly which online marketplace Amazon dominates.
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