From USA Today:
The list of technology companies in the cross-hairs of Amazon and its CEO Jeff Bezos grows longer every year.
And the Seattle-based company’s operating history shows being in that position could spell trouble for shareholders of those firms.
Amazon’s ever-expanding product portfolio has taken expected growth away from rivals ranging from eBay to Walmart.com.
Revenue at Amazon is expected to reach roughly $130 billion this year, thanks to growth of 20%.
Netflix is the most obvious new target, now that Amazon’s Prime service — which includes digital video entertainment — has signed up nearly half of U.S. households.
. . . .
The jargon evokes another term that became popular during the dotcom era, around the time Amazon went public in 1997.
The word was ‘disintermediation,’ and it was used to describe how companies like Amazon could use the Internet to lower the costs of products and supply chains by eliminating pesky middlemen.
At the time, the people using the term — mostly startup CEO and venture capitalists — assumed that the businesses to be disintermediated would be of the bricks-and-mortar variety.
. . . .
It is true that music, video and bookstores have nearly vanished from the American landscape, as have retail travel agencies.
Meantime, Amazon has become the fifth-most valuable tech firm, with a market cap of $295 billion.
. . . .
Amazon was building warehouses filled with servers before anyone, even Salesforce CEO and fellow cloud pioneer Marc Benioff, was signing ‘cloud’ contracts.
Those massive buildings filled with humans, robots and computers place the company in a prime spot (no pun intended) as corporate America shifts to cloud services.
The problem for Microsoft, Netflix and other tech firms is that Amazon’s cost structure in most of its markets is lower than theirs.
Earlier this month, in a telling reminder, Microsoft slashed the price of some of its cloud services by 17%, a week after Amazon cut its prices 5%.
It was just the latest in a series of price cuts by the two companies.
Bezos has already shown that he can prevail in almost any low-margin market, while the cloud and Amazon Prime give Amazon the chance to attack higher-margin ones.
Link to the rest at USA Today
The story was mostly about tech, but PG noted that USA Today, generally regarded as the largest-circulation newspaper in the US, states that bookstores “have nearly vanished from the American landscape.” While it hasn’t actually happened, in the words of Lee Atwater, “Perception is reality.”