Friday, October 24, 2014

How can a Google Fail?

When I refer to 'a Google', I mean a company that seems to do amazing things and yet is struggling. This is the story with Amazon this week. They reported poor margins with a grim outlook for 4th quarter. Which from a financial point, their stock is struggling.

Think about it, Amazon.com is the e-commerce site in the United States. If you need something, you go to Amazon.com first. There are even sites related to track what Amazon.com's prices are (one of these is camelcamelcamel.com). Again, it begs the question, is Amazon not profitable?



Truth is, a lot of people do not think so. Amazon.com is a massive company with plenty of revenues coming in. However, their problem is that they are investing in every nook and cranny in the technology domain right now. If you go to Amazon.com's desktop site and scroll to the very bottom of the page, there are approximately 35 different companies that are subsidiaries of Amazon.com. That is a lot of companies!!! Not only that, Bezos and company are working on drones and phones. In recent years, they are trying to develop in everything from A-Z (see what I did there?). These various investments have not been able to keep up with the amount of revenue that comes in to the company.

Its rivals, Google and Apple, have mounds of cash coming in from search results and iTunes purchases. Amazon.com is a great company and I have it on my radar to read Bezos' book in the near future. However from a shareholder perspective, they need to slow down and concentrate some of their efforts. From a technology point, I commend what Amazon.com has done. They have provided a great service and several companies use AWS (Amazon Web Services) for their online development.

Who really knows what Amazon.com has in store for us though? Sometimes, companies put a lot of money into various initiatives, and when one of them sticks, they make a killer in their profits.

Post some comments below. Thanks for reading.
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