I find her ideas (that Amazon is anti-competitive by being big) interesting, but I find her reasoning unconvincing. Her point is that breaking up large companies, merely because they are big, into smaller companies would improve the economy. She says:
"the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. "
She is upset because companies pursue growth over profits. I'm not sure I see this as a bad thing. Even if it were a bad thing, it's not something that only large companies pursue, it is probably more common among small companies.
Small companies can't lose billions in order to destroy a single competitor, and then recover it by jacking up prices when they're gone. Read the diapers.com story and tell me there's not a problem with Amazon.
Small companies can't lose billions in order to destroy a single competitor,
Just an FYI that is how Amazon started: as a small company that lost billions. So yes, it is possible.
I'm sorry, and perhaps my memory of things is rusty, but when did Amazon lost billions as a small company? The best I can remember is that it did aggressive reinvesting on itself, keeping shareholders at bay who were demanding unicorn-level dividends and fuming at Bezos plans for long-term operations.
It was after a while that it started running some operations "on the red" to either facilitate customer engagement (by selling kindle at a loss) or to drive a competitor to the ground.
But even then, the company has been profitable without registering billions of losses as you mentioned.
I am sorry, but this entire argument is strange to me. If you can lose billions, you are not a small company.
And even if it were, that's a unicorn. Just because Netflix was there at the right time to bury Blockbusters to the ground, it doesn't mean any company can do just that. There are specific market/social conditions that make unicorns possible.
They do not imply that unicorns are possible in the general economic sense. And although I'm not a fan of government going after big companies just because they are big, we need to recognize that there's something uniquely hegemonic about Amazon, and AWS in specific. There are no alternatives in the general case (and no, Digital Ocean, Google or Azure aren't, they require a certain type of customer profile to leverage opex comparable to using AWS.)
The way I see it, it might be beneficial to see a separation between Amazon, the retail store and content provider, and AWS (the cloud platform), akin to the breakout of the Bell System.
As a matter of fact, I think there needs to be a separation of retail operations, content provider operations and cloud/infrastructure operations, regardless of the owning company. If Facebook were to enter into the cloud provider business, it would need to be split. The moment Google were to enter retails or content provider sectors, it would need to be split as well.
Markets do not necessarily operate at efficiency (or sustainably for a nation) when there's too much concentration of something (which for whatever reason we tend to confuse with "vertical/horizontal" integration.)
Amazon was running a deficit before it went public. They followed the common growth strategy of losing money on each sale to gain market share. In those days people said, "buy it on the internet! It's cheaper!"
Amazon was running a deficit before it went public. They followed the common growth strategy of losing money on each sale to gain market share. In those days people said, "buy it on the internet! It's cheaper!"
Yes, I remember that, but I don't remember it was continuous and certainly not in the billions.
I mean, let's look at the time table. Amazon was founded in 1994, and, deficit or not, it was a sensation for those of us buying college textbooks (before that I was used other online/embryonic used book sellers.) I remember this because I clearly remember what books I needed in 1995 and my feelings of "holy shit, this is awesome."
The company went public, what, 1997? So, excluding inception (1994, literally r
You are right. By the time Amazon was losing billions, they were already a large company.
Losing money to gain market share is not an uncommon idea though, for example, Uber and Lyft did the same thing, and eventually lost billions. Twitter did the same thing.
WARNING TO ALL PERSONNEL:
Firings will continue until morale improves.
Her paper (Score:3, Insightful)
I find her ideas (that Amazon is anti-competitive by being big) interesting, but I find her reasoning unconvincing. Her point is that breaking up large companies, merely because they are big, into smaller companies would improve the economy. She says:
"the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. "
She is upset because companies pursue growth over profits. I'm not sure I see this as a bad thing. Even if it were a bad thing, it's not something that only large companies pursue, it is probably more common among small companies.
Her second argument addresses A
Re: (Score:5, Insightful)
Re: (Score:4, Interesting)
Small companies can't lose billions in order to destroy a single competitor,
Just an FYI that is how Amazon started: as a small company that lost billions. So yes, it is possible.
Re:Her paper (Score:2)
Small companies can't lose billions in order to destroy a single competitor,
Just an FYI that is how Amazon started: as a small company that lost billions. So yes, it is possible.
I'm sorry, and perhaps my memory of things is rusty, but when did Amazon lost billions as a small company? The best I can remember is that it did aggressive reinvesting on itself, keeping shareholders at bay who were demanding unicorn-level dividends and fuming at Bezos plans for long-term operations.
It was after a while that it started running some operations "on the red" to either facilitate customer engagement (by selling kindle at a loss) or to drive a competitor to the ground.
But even then, the company has been profitable without registering billions of losses as you mentioned.
I am sorry, but this entire argument is strange to me. If you can lose billions, you are not a small company.
And even if it were, that's a unicorn. Just because Netflix was there at the right time to bury Blockbusters to the ground, it doesn't mean any company can do just that. There are specific market/social conditions that make unicorns possible.
They do not imply that unicorns are possible in the general economic sense. And although I'm not a fan of government going after big companies just because they are big, we need to recognize that there's something uniquely hegemonic about Amazon, and AWS in specific. There are no alternatives in the general case (and no, Digital Ocean, Google or Azure aren't, they require a certain type of customer profile to leverage opex comparable to using AWS.)
The way I see it, it might be beneficial to see a separation between Amazon, the retail store and content provider, and AWS (the cloud platform), akin to the breakout of the Bell System.
As a matter of fact, I think there needs to be a separation of retail operations, content provider operations and cloud/infrastructure operations, regardless of the owning company. If Facebook were to enter into the cloud provider business, it would need to be split. The moment Google were to enter retails or content provider sectors, it would need to be split as well.
Markets do not necessarily operate at efficiency (or sustainably for a nation) when there's too much concentration of something (which for whatever reason we tend to confuse with "vertical/horizontal" integration.)
Re: (Score:2)
Amazon was running a deficit before it went public. They followed the common growth strategy of losing money on each sale to gain market share. In those days people said, "buy it on the internet! It's cheaper!"
does not compute (Score:2)
Amazon was running a deficit before it went public. They followed the common growth strategy of losing money on each sale to gain market share. In those days people said, "buy it on the internet! It's cheaper!"
Yes, I remember that, but I don't remember it was continuous and certainly not in the billions.
I mean, let's look at the time table. Amazon was founded in 1994, and, deficit or not, it was a sensation for those of us buying college textbooks (before that I was used other online/embryonic used book sellers.) I remember this because I clearly remember what books I needed in 1995 and my feelings of "holy shit, this is awesome."
The company went public, what, 1997? So, excluding inception (1994, literally r
Re: (Score:2)
You are right. By the time Amazon was losing billions, they were already a large company.
Losing money to gain market share is not an uncommon idea though, for example, Uber and Lyft did the same thing, and eventually lost billions. Twitter did the same thing.