I predict that Amazon will cease to be as big as it is today by the end of this decade. At max, they will be worth 50B but bankruptcy is possible as well. Reasoning: Amazon is a GIANT. It operates in a lot of industries and continues to expand every year. From ecom to cloud to iot to Healthcare, the company continues to "innovate". But this innovation has come at a cost. Every business has to keep 3 things in mind: revenue, cost of revenue and where they put the profit. Amazon's strategy has been to continue investing their profit into new industries. This helps them show higher revenue. In reality, this is just an "empire building" strategy. Easiest example is Alexa. That product was expected to kill Google as it propheced that modern people will use it more than typing. While it was somewhat true, the investment Amazon put into it was gigantic. There are about 10k engineers working on Alexa, from hardware to AI to integration software for third party products. Those people cost about 2.5B every year, at 250K total cost to company per employee. Alexa also has high server cost. Other bets Amazon is doomed to fail in: Zoox, Twitch, Whole foods, Amazon Go, Healthcare, Rivian investment, Kuiper. All of the above are pure money pits. About 1B loss per product per year, if not more. No profits from any of them expected within a decade. But what will trigger the sell off? Amazon's inability to attract talent which can innovate and work fast at the same time. These people have many other options now. 5 years ago tech was all about websites and bits in general. Now tech is much broader, people with interest in finance, biotechnology, space, electric cars have ways to explore their interests. What put nail in coffin? High interest rates. Amazon is like a pyramid scheme. They have the same problem as Lehman Brothers did in 2008. Confused leverage for innovation and genius. Continuing to buy risky, highly innovative and competitive products without good profit margins. But the stock is doing well? It is, for now. The PE is 90 right now with no clear indication of where the E is supposed to come from. "AWS"? Yes, aws is great. They make money and work on a critical product. BUT in last 5 years plethora of tech startups have come up in cloud space. Their products have higher profit margins too. They are backed by VCs who know Amazon's limitations. Basically, Amazon is trying to compete with collective $$$ power of all VCs. They won't be able to continue doing that with 5 consecutive quarters of decreasing operating income. Just my 2 cents. Happy Thanksgiving đŚ
I read it. Good points, but even before Meta? Idk about that. Meta canât survive by sticking to just ads. Zuck knows this, which is why he keeps pushing the metaverse. The metaverse or something like it, might come to fruition, but for now, itâs just a pipe dream. Likely too early
Metaverse has distracted people so much. In reality, Meta has 3 largest daily consumed apps on the planet. FB, Insta and whatsapp. Apart from RL, Meta has made huge investments in monetizing these apps. For example, in India they have invested in the largest internet provider - Jio. They own 10% of it. Meta also has good WLB and employees in general enjoy working there. With Meta, only 1 product is a problem. With Amazon that number is above 10.
Amazonâs operations infrastructure is at least a decade ahead of anyone elseâs. Instagram will die before another competitor can offer 2 day delivery at scale. Meta is the most at risk of collapse because its apps are not timeless. With time, society moves towards the next media app (I.e TikTok). Meta will have to keep acquiring the next IG. Bezos famously said âin 100 years you will still want fast deliveryâ. In 100 years, there definitely wonât be Instagram. Will Meta own/create the next media app, that will be seen.
I don't think amazon will ever go bankrupt.Their business model is solid.
What do you think their business model is? Just want to contrast it with my claim that they grew purely on low interest rates. There is no business model to applaud. Forcing long working hours on all employees while leadership continues to buy new companies so they can show higher revenue and get promoted. That's their business model imo.
Nothing to applaud.They have amazon.com selling products directly to customers. They have amazon web services selling products directly to customers. all this is good business model from first principles. You sell a product directly to your customer and customer gives you money. This is the basis on which Walmart,target, Costco all have born and lived until now.
Seize: https://www.merriam-webster.com/dictionary/seize Cease: https://www.merriam-webster.com/dictionary/cease
Corrected. Thanks
Stopped reading after âbankruptcy is possibleâ for Amazon. Biggest online merchant, largest cloud services provider, huge amount of talented engineers and not afraid to cut costs and fire like other FAANGS. Iâd wager Amazon is one of the least likely companies to go bankrupt.
They said the same things about Lehmann brothers. We will see.
Ooor maybe finish the reading before you come to conclusions? OP makes some good points. Maybe the points are things you didnât think of before?
seize -> cease Your critical thinking and analysis is good as your English.
Amazon was never about profits. It was about constantly BSing Wall Street with the growth prospecting by investing in tons of useless projects. The stock price is the most important for Amazon leadership.
Thank you, your bitterness
I get my business analytics from my barber and cab driver, not an LE from teamblind
If you worked somewhere else you could afford a financial advisor.
Coming from meta lmaooo
Lol sure. Amazon has tangible assets that arenât just vaporized in a bad economy. I personally think Meta is at highest risk of crashing out of the âbig techâ category
Tangible assets are good but they come at high operating costs.
You know whatâs not good? Users who can disappear in a matter of months when the next trendy app comes along or when a particular generation just doesnât engage with an ecosystem. Amazonâs customer base espc prime members, and their AWS investments are more than tangible. The investments in Rivian, Kuiper, etc are definitely profit suckers right now but that wonât be the case for long.
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What's your take on Twitter ?
I think people should stop commenting on twotter and start learning from it. It shows us how just because a website is popular and used by millions, it cannot make money. They are doomed to fail its just a matter of when. That's why all other Amazon subsidiaries I mentioned above will fail.
Funny this is coming from 'Meta'