Is Amazon simply an online retailer?

Amazon’s e-commerce, cloud computing, AI, movies and music, space, grocery, health, media, and lobbying businesses, etc.

Naturally, Amazon is being destroyed by humans every day. But Bezos’s Amazon is happy. Its logo is a smile—a smile of happiness. Today, I want to write about Bezos, the world’s richest man, who appears in the newspapers every day, and his happy, smiling Amazon. Amazon is not the simple e-commerce company we imagine it to be.

Bezos, who came from a Wall Street hedge fund, observed how that firm used data and made “data collection and utilization” the core of his own business. He initially chose books as his online business category because they let him group many items into a single category, enabling him to create a large online marketplace. Eventually, Amazon built an online book catalog as extensive as seven New York City phone books. Although it started with books, Bezos already had a vision to expand into all kinds of products, and Amazon actually became an “online mall”—a department store on the internet—by bringing in third-party sellers. However, while serving as a platform for third-party sellers, Amazon also continued to operate as a seller itself.

In 2005, Amazon launched Amazon Prime, a membership program offering free two-day delivery, which has since expanded to include same-day delivery. As the service expanded, Amazon naturally began building its own warehouses. To deliver goods quickly, it established a delivery service system through third-party contractors and even acquired its own fleet of cargo planes worldwide. Amazon has now become the so-called “gatekeeper” of e-commerce. This means that online sales are difficult without using the Amazon platform.

Amazon is also expanding into the entertainment industry. An Amazon Prime membership provides access to movie and music services. While Netflix currently ranks first among streaming service platforms, Amazon Prime Video ranks second. Hulu ranks third, and HBO fourth. The comedy series “Fleabag,” produced by Amazon Prime, won two Golden Globe Awards, and the series “Transparent” won an Emmy Award.

Its most important business—cloud computing (on-demand delivery of IT resources via the Internet)—is a major revenue driver. As a global technology service provided by Amazon Web Services (AWS), cloud computing is used in a variety of ways, ranging from infrastructure services (compute, storage, databases) to the Internet of Things, machine learning, and data analytics. In 2013, Amazon signed a 10-year contract with the U.S. CIA, which helped establish its reputation for data reliability, leading many companies—from large corporations to small and medium-sized businesses—to adopt Amazon’s cloud system. For example, as highlighted in AWS advertisements, healthcare companies use it to provide personalized treatment for patients, financial institutions use it for fraud detection and prevention, and video game companies use it to deliver online games to millions of players worldwide. In the global cloud infrastructure services market, Amazon’s AWS holds approximately 35% market share, followed by Microsoft at 15% and IBM, Google, and Alibaba, each accounting for less than 10% (as of 2018, source: Synergy Research Group). Amazon is the overwhelming leader in the global cloud computing market. Even within Amazon, AWS accounts for 13% of Amazon’s total revenue and 52% of its total operating income (as of 2019).

Amazon’s AI business includes the Amazon Echo “Alexa.” Alexa is a personal assistant that answers people’s questions well; as it continues to receive questions, its algorithms improve, allowing it to learn on its own and become smarter. Amazon has also partnered with police departments to expand into the “Ring” indoor camera business and facial recognition technology. Facial recognition is a technique that allows police departments to easily identify faces captured on camera by paying a monthly service fee of just $13 to access facial data provided by Amazon. Additionally, Amazon founded “Blue Origin,” a company dedicated to missions to Mars.

On top of this, it is encroaching on the grocery industry, the healthcare market, and media companies. Bezos even bought a house in D.C. and built a large ballroom inside where he can host guests. Amazon is the tech company that spends the most on lobbying, and it seems Bezos is now moving in next to the White House... He has now fully entered the lobbying business to build his kingdom...

07/03/2020 by Dr. Lan Joo