A series of articles and authoritative statements about Amazon have all surfaced more or less simultaneously, giving fresh perspective on the Bezos Behemoth, and where it may go from here. And also, on what kind of services you can expect from it in future – and whether all those knockers who insist that the Amazon ebook platform is in terminal decline and that you’d better give up on Kindle are right or not.
First, Kevin Kelleher in Time Magazine runs a comparison of Amazon versus Walmart, which unsurprisingly comes out in favour of Amazon, but for perhaps less expected reasons. His subtitular thesis is that “It’s not really about physical stores vs online anymore” – which also suggests that it’s not really about physical books/bookstores vs online/ebooks either. His point is that Amazon is not only way ahead of Walmart in market cap and dollar-value productivity per employee (nearly three times Walmart’s), it’s also that Amazon is reinvesting its proceeds in growth, instead of share buybacks and dividends. Walmart pays billions for these, which are essentially bribes to the market to prop up its share price, and it isn’t working. The markets are rewarding growth and future prospects, and Amazon will therefore keep investing in new growth drivers like the $50 Kindle Fire 7.
The second piece, in Inc., shows Jeff Bezos responding promptly and personally to a New York Times article describing ferocious working conditions and disgruntled employeers. Bezos sent an email, obtained by GeekWire, to Amazon employees, where he states: “The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly at firstname.lastname@example.org.” What’s more, he continues, “The article goes further than reporting isolated anecdotes. It claims that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter heard.” And he adds, “I don’t think any company adopting the approach portrayed could survive, much less thrive, in today’s highly competitive tech hiring market.”
Some of you out there will probably side with the NYT and find yet one more reason to never buy a book from Amazon again. Some may poo-pooh Bezos’s response. But what it does suggest is that Amazon will continue to push to innovate, and will try its hardest to attract and to keep the kind of leading minds it needs to do that.
And the third piece, from Business Insider, draws on a video “fireside chat” with Bill Gurley of Benchmark at a Sailthru e-commerce conference. Gurley compares Amazon very favourably to Google in the e-commerce space – actually, he states that Amazon is invalidating Google’s entire e-commerce business model, especially through Amazon Prime. His thesis is that Amazon Prime now has immense traction with its loyal customers, built up through competitive pricing and just-as-competitive delivery and fulfillment. Any existing Prime user needs a massive incentive to step outside Amazon and Google more widely for things.
So, Amazon will continue to invest in Prime, and is seeing all its efforts to build network effects rewarded. Bezos is not likely to take his foot off the innovation pedal any time soon, and we should all see the benefits in due course. Will that make Amazon a more lovable, caring company? We’ll see ...