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This whole article seems predicated on a couple of misconceptions. To whit: 1) getting bought out is losing 2) buying is winning. The fact that Amazon has more
by moomin 9y ago
This whole article seems predicated on a couple of misconceptions. To whit: 1) getting bought out is losing 2) buying is winning.
The fact that Amazon has more money than Whole Foods is nothing to do with its performance in the groceries market. The fact that Amazon has bought Whole Foods suggests, in fact, that they think there's value to be had there that isn't reflected in their current market capitalisation.
And none of this actually means that the Whole Foods acquisition will work. It sounds like a good idea, and I wouldn't risk money betting against Jeff Bezos but Amazon aren't a dominant player in the groceries market yet. They've just bought one of the few successful insurgents.
In short, this is just a move in the game. Calling the match is pretty premature.
- majewsky 9y ago> The fact that Amazon has bought Whole Foods suggests, in fact, that they think there's value to be had there that isn't reflected in their current market capitalisation. Not necessarily. They might be thinking that WF's value can be increased by integrating it with Amazon, making its market cap smaller than its actual value conditional on the acquisition.
- moomin 9y agoTrue, but that's typically a big bet. Very few acquisitions go smoothly. Put it this way, imagine the same article being written about the Tumblr acquisition. It's unclear why he believes Whole Foods constituted an obstacle to Amazon, either. As I say, I'm not betting against Bezos. But not every move he makes is genius, and it's currently too early to call. And groceries are _hard_: history is littered with successful firms and their disastrous expansions. Heck, I remember reading articles about why Apple's new "physical stores" strategy was doomed to failure.
- cpr 9y agoI think you missed the point of the article, which was that buying Whole Foods had nothing to do with winning or losing, but with providing a first, best customer for their grocery sales efforts.
- dsjoerg 9y agoI don't see what in the article gave you the impression that Whole Foods lost. Or that Amazon won.
- jimbokun 9y agoHe drew an analogy between the Whole Foods CEO about Amazon and the groceries market and the Palm CEO about Apple and the phone market.