What will Amazon do next?

By Deane Barker on September 16, 2012

E-Commerce: Will Amazon Take Over the World?: I’ve been a huge fan of Amazon ever since I got on the Internet back in 1995 or so.  In the last few years, that admiration has accelerated as I maintain that Amazon is doing some of the most interesting things on the Net of any company today.

This article is a nice summation of what the company is doing, and why it’s working.  From the Kindle…

[…] the development of the Kindle and the Kindle Fire isn’t just a quixotic attempt to poke its tech rivals in the eye. Bezos realized that these products were necessary to maintain Amazon’s strong presence in the digital-media business. While books, movies and music don’t account for nearly as much of Amazon’s revenue as they once did, they still account for 37% of it — and a high-margin slice of it at that.

…to the cloud…

Amazon’s most daring gambit, and the one that may position the company for the kind of earnings growth that the stock market expects, is its foray into business-to-business services.

…and who knew that the 3rd-party reselling business was so big?

retailers who use Amazon’s third-party marketplace now account for 35% to 40% of all units that Amazon sells per year. Amazon takes a healthy commission off each sale it makes — making third-party sales a higher-margin venture than its core retail business — without having the risk of developing those products or holding the inventory.

I once argued in a conference panel that Amazon was the first Web 2.0 site out there. It was certainly the first shopping site that elevated shopping to a much more contextually rich activity, and one that I didn’t hate.

How well Amazon did this dawned on me when I noticed that if I was stuck on a thorny business or technical problem, I would often go search Amazon for answers.   The existence of books on some aspect of the topic would often lead me down a new path, many of which contained solutions I never would have thought of otherwise.  I still do this.

We’ve talked before about how Amazon’ s capitulation on the sales tax issue is opening up the possibility of local Amazon warehouses, and the same-day delivery potential that offers.  I’m going to take this a step further –

How long before Amazon just purchases Barnes and Noble?  Barnes and Noble is struggling and has been for years.  Since Amazon soon will have no dog in the sales tax fight, which was the biggest reason it had to limit its physical presence, how long before they scoop up a chain with 723 retail stores?  When an Amazon logo appears on your street corner, how will that change local retailing?  And what are the unique dynamics of a company that did the Internet first, and brick-and-mortar second?

I don’t know which direction Amazon is headed in next, but I’m awfully interested to find out.

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