The end of the diversified development of amazon?

note: hunting cloud for a long time, amazon is a global business enterprise model and frame of reference, from a key order to logistics system, from large data to cloud computing, published to the film and television, etc., becoming a monster. But diversification continued expansion strategy is still a long-term losses, plus hardware strategic defeat, to amazon’s strategy of diversifying need reviewing. The following is tencent’s foreign language translation of science and technology content.

on February 6, e-commerce giant amazon last week revealed in fiscal year 2014 the fourth quarter than Wall Street expectations. In October last year, the company announced third quarter loss of $437 million, and 14 years. Amazon disclosed in the latest results, the company’s Prime membership project is the main reason for the profit growth. News is released, the stock spiked 13%.

does this mean that the amazon to return to the track? Wharton management professor Daniel Ralph (DanielRaff) that the company still has a lot of goals to achieve. He was surprised by the amazon’s deep pockets, the company CEO Jeff bezos (JeffBezos) “is a billionaire… And usually want to try things clear to him, “thus shareholders tend to amazon and its senior management team is very trust. “They are looking for interesting new task.” He said.

professor at Syracuse university school of business and retail practice Whitman, and motor nickerson (AmandaNickolson) pointed out that amazon has from an e-commerce company grow into a diversified enterprise groups, business scope covers the book publishing, film and television production and cloud computing and other fields. “Speaking of amazon, it feels like talking a monster.” She said.

Ralph to bezos. “He have long been aware that the prospect of Internet retailing, and the radical action.” Early, “he said.” he smelled the Internet business.” Ralph, points out that raised $54 million in 1997 to coincide with amazon. Com bubble peak. Was valued at $438 million, then is the most expensive, but now the amazon market value has surged to $168 billion. “He has the investment capital early, he’s always aggressive investment way.”

Nicholson also think bezos “obviously very talented, and laid hands on him early”. He added that the traditional warehouse supermarkets until recently just aware of the potential of electronic commerce and opportunities.

cost and profit

however, Ralph and Nicholson in praise of amazon, at the same time also mentioned some of the company, in the process of the growth and the threat. Although amazon revenue growth of 20% in 2014, to $89 billion, but annual losses of $241 million, by contrast, the company profit of $239 million in 2013. She points out that the amazon’s gross profit margin on the growth, in the most recent quarter, mainly thanks to the increasing number of third party merchants. But at the same time, the cost of the company is “unusually high” and continue to grow. “Unless operating margins upgrade, can’t let these costs rising.” She said.

Ralph said, investors may be worried about the prospect of amazon web services (AWS), it is a rental server resources of cloud computing business via the Internet. Although its growth within the amazon may be in the first place, but it is facing capital technology giants such as Google has abundant of mounting competition. “It’s not clear their network service can realize what kind of profit margins in the future.”

Nicholson said that amazon has introduced a successful product such as the Kindle, but also encountered some failure, the Fire last year the mobile phone is one of them. “But bezos knows how to exploit for sellers groups in different ways. Bezos opens up a market to be all things to all people, so he has unlimited market space… Because he always says, ‘I don’t have to control you, you can use my system. ‘”

Ralph think, amazon into many fields show that bezos “not afraid” to try all kinds of business philosophy. He pointed out that the amazon take patterns could be “plenty of trying to”, then put the financial and human resources to focus on real project with success potential. “This is actually a kind of exploration.” He said. Nicholson also agree with this statement, but he also warned that the process mistakes could lead to high costs to amazon and its shareholders. “The key issue is that investors can also support how long they?”

prospect

Ralph and Nicholson are questioning the future of the amazon Prime service, the service can provide two days free service for members, the annual fee is only $99 (students only $49). Amazon last week announced that global Prime membership has reached “tens of millions” of the total, up 53% from 2013 in 2014.

Nicholson thinks, in the amazon Prime membership shopping spending three times of Prime membership, it is really encouraging. But she also pointed out that the amazon to start selling more and more third party goods, and many of the traditional retailers also started to offer free delivery. In such cases, the Prime membership may raise the question: “buy this membership is really worth it?”

Nicholson said the amazon while planning for unmanned aerial vehicle (uav) delivery plan for a long time, but its prospect is also very fuzzy, especially in the face of the cases of potential regulatory hurdles. Ralph agrees, he said, the White House will certainly improve the regulatory hurdles unmanned aircraft crash.

Ralph and Nicholson, amazon of recent acquisitions on the verge of bankruptcy chain retailers RadioShack, seem unable to form a clear positive. Ralph said, amazon may use these shops sell Kindle and other electronic products – the effect is similar to apple retail stores. Nicholson, points out that many RadioShack stores are very old, “the anchor is not good.”

the content of the amazon strategy also faces some questions. The company recently with woody Allen (WoodyAllen) sign television and attention. “They are very hard, because from many Angle, they are content providers, the only problem is to achieve economies of scale.” Ralph said. Nicholson, argues that the strategy has a risk. “Investors are tired of film and television content, this area there are too many competitors.” She says, “but this strategy is reasonable. If the method is proper, can be rewarding. (song)