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"selling books to selling everything" seemed a reasonable change to me, and I think it was articulated as a strategy by bezos early on. As you say, books were a

"selling books to selling everything" seemed a reasonable change to me, and I think it was articulated as a strategy by bezos early on. As you say, books were a starting point. Selling books to selling computing on demand... That was a big leap, and the most profit generating "pivot" I can think of. Alexa, video streaming, kindle and ono...these are really Amazon becoming like Google. They're now defined as a business by the skills/abilities they have, not the services they provide. Technology company, not search company. ..this justifies investing more on self driving cars or nuclear power and less on search engines. For most companies this would just be pr/hr-speak, and impossible in practice. Usually companies have to spend most of their money on core products, because it takes money to deliver those products. Tesla or Walmart could define themselves however they want, but they'll never be able to spare more than a penny or two of car dollars on stuff that isn't related to making cars. The margin isn't there. To be a Google, you need a legitimate cash cow. Amazon now have one, aws.

jeron 9y ago
"Selling books to selling computing on demand... That was a big leap, and the most profit generating "pivot" I can think of." is it a pivot if that was the intention from the start?
- joncrane 9y ago
  AWS was never an intention from the start. Some Amazonian in the mid 2000s saw the opportunity, wrote a three-pager about it, Jeff Bezos agreed, and now we have AWS.
  - drewmate 9y ago
    I’d be interested in reading more about this. That employee changed Amazon’s future (and indeed the future of computing in general) immensely. I hope he/she was fairly compensated and relaxing on a beach far from Seattle now.
    - philk10 9y ago
      Try this blog post - http://blog.b3k.us/2009/01/25/ec2-origins.html http://blog.b3k.us/2009/01/25/ec2-origins.html
    - pmiller2 9y ago
      I wonder what the actual likelihood of that is. The stock has increased at least 20x since 2008, so, assuming the employee had options beginning in 2004, they could have made a decent amount of money off that.
    - scarface74 9y ago
      Here you can find an interview of the Amazon CTO back in 2006. http://www.se-radio.net/2006/12/episode-40-interview-werner-vogels/ http://www.se-radio.net/2006/12/episode-40-interview-werner-...
- dalbasal 9y ago
  I would say so, but that's mostly semantics. Define "pivot" however you like :) But, I don't think amazon of the 90s "planned" on aws in any meaningful way.
- mrkstu 9y ago
  Doubtful. Too far down the pike. What Amazon is great at is turning its own infrastructure needs into revenue instead of a cost- Marketplaces (White labeling it's shopping market) AWS (Digital Infrastucture) Shipping/Transport (FBA (Fulfillment) first, now SWA (Shipping)) It also leverages revenue streams, to open new markets: Prime Shipping -> Prime Video/Music, Pantry That doesn't even include Fire/FireTv/Alexa ecosystem plays. They have been playing for keeps while others inch along with incrementalism.
  - reaperducer 9y ago
    > What Amazon is great at is turning its own infrastructure needs into revenue instead of a cost Let's hope that it decides to offset the cost of all those planes hauling its boxes around the country by selling tickets to paying passengers. It could be Spirit Airlines, but without the terrible customer service, terrible conditions, and nickel-and-diming of its customers. All we want is a safe, reliable, solid, FAIRLY PRICED airline ticket. Do you hear me, Jeff? Hello? Is this thing on?
    - tjr225 9y ago
      Anecdotally, I have never had an issue flying spirit and have done so on many occasions. They have a couple cheap direct flights from KC - Detroit/Chicago (family is right in between) and seasonally Portland - Detroit that are mega cheap
      - reaperducer 9y ago
        I had a Spirit flight to Charlotte that never took off. I ended up having to cancel my trip entirely. And the interwebs are full of Spirit horror stories. Also, conventional wisdom is to not fly Spirit if you're of average height or above.
        tjr225 9y ago
        I'm 6'1" and I've been uncomfortable on every flight I've ever been on as an adult that was coach...not really special to Spirit.
yomly 9y ago
The hilarious thing was that when I worked at Amazon, the majority of Amazonians I met thought Amazon was a Retail company...
- notyourwork 9y ago
  It’s not hilarious if your teams focus is retail related.
  - kgwgk 9y ago
    And the company focus is retail oriented.
    - oh-kumudo 9y ago
      Not in AWS
      - notyourwork 9y ago
        Retail is an AWS customer, isn't that obvious?
deleted 9y ago
[deleted]
simula67 9y ago
Ideally if Google management wants to run these types of companies, they should pay dividend on the shares, taking money out and then invest in these businesses. The only reason I can think of for allowing Google management to throw other peolpe's money at their pet projects is taxes
- jacksmith21006 9y ago
  Not following. Paying a dividend and the money is gone versus reinvesting. So the opposite of what you are suggesting so maybe not following?
  - simula67 9y ago
    The profits generated from Google's business belongs to the shareholders ( owners ) of the company. If the money can be used to defend the business ( Android, Chrome etc ) it can be - and should be - reinvested. Is self-driving cars related to search ? You could argue that it defends the brand. But otherwise, the money should be paid out as a divident and the cash thus obtained by Google's management ( Larry and Sergey still hold a lot of Google stock ) can be used to fund these type of projects. Other shareholders who do not believe in such projects can invest their dividents in businesses they believe in
saalweachter 9y ago
AWS was surprising. A lot of what Google does, or fails at, makes a lot more sense when you actually think about what its core competencies are: big data, anything that works best with an exabyte of data, a billion CPU-years, and some crazy machine learning / good ol' fashion statistical elbow-grease. It's obvious how this relates to their original business, Search, and how it relates to their more successful spin-offs and their failures. Spam filtering and self-driving cars are more big data problems (though spam filtering is less impressive nowadays), and the Cloud and YouTube make a lot more sense when you realize that Google already runs a really efficient data-center. Meanwhile, eg, Google Reader was something that didn't really need a Google to run, and suffered for it. It's not as obvious to me how AWS grew out of Amazon; it doesn't seem obvious to me that you need that much data center to run Amazon (or at least, Amazon-at-that-time).
- dalbasal 9y ago
  I wish I'd said it like that. Surprising, for just that reason. Your Google point (besides being a contrast to amazon's surprising athena) is an interesting way of describing things. Youtube, Android and even adwords & web analytics were bought fairly formed, and clearly were quite good already. That's a skill in itself. When you think of examples of ebay, skype and how few buy-outs really do succeed like that. Google could make the web work too. Remember how slow yahoo a basic webmail service was. The idea that they'd make an excel that worked.. it wasn't trivial. But I think you're right on the lead skill. If it works best with an exabyte of data, a billion CPU-years... it works best on a google.
  - 220V_USKettle 9y ago
    I think that is an interesting insight - the majority of Google's offerings are from aquisitions of 'established' implementations, whereas Amazon's are developed in-house to solve a pain-point, that is felt by other businesses, too. So, is Amazon really more B2B, while Google is B2C? Is Amazon using e-commerce like a US university looks at undergrads for funding?
    - 9y ago
IncRnd 9y ago
If the leap to AWS had not happened, Amazon would likely not be here today. All of Amazon's operating income comes from AWS. The other departments ranging from moon launches to book selling are just cost centers. http://www.zdnet.com/article/all-of-amazons-2017-operating-income-comes-from-aws/ http://www.zdnet.com/article/all-of-amazons-2017-operating-i... http://www.businessinsider.com/amazon-web-services-cloud-online-shopping-profits-chart-2017-5 http://www.businessinsider.com/amazon-web-services-cloud-onl... https://www.geekwire.com/2016/amazon-without-aws-online-retailer-posted-big-loss-not-booming-cloud-business/ https://www.geekwire.com/2016/amazon-without-aws-online-reta...
- kgwgk 9y ago
  “Cost center” doesn’t mean “unprofitable department”. And actually two of the three segments appearing in Amazon financial reports are profitable.
  - IncRnd 9y ago
    > “Cost center” doesn’t mean “unprofitable department”. That's unnecessarily pedantic. A cost center is an organizational subunit that incurs cost but does not directly contribute to the company’s profits. Since I said "department" and "cost center" it really should be clear what was meant. Why, it is just like the article itself using "Amazon" as both a noun and a verb! > And actually two of the three segments appearing in Amazon financial reports are profitable. Amazon had 6 segments in 2017 not 3. If you look at the Operating Profit, Operating Margin, and P/E considering the context of my comment about AWS vs. the other departments, I think you will see why AWS has kept Amazon (and AMZN) afloat.
    - kgwgk 9y ago
      Using “cost center” in the first place was unnecessarily pedantic. And wrong. According to note 11 in the annual report for 2017 “We have organized our operations into three segments: North America, International, and AWS.”
  - Spooky23 9y ago
emodendroket 9y ago
Walmart has got their fingers in a lot of pies too. I am not sure you meant to use them in that sentence anyway because they don't do "car stuff."
thewhitetulip 9y ago
That he came up with AWS tells us a lot about his acumen. Google reportedly has failed to build a viable rival although they had kubernetes in their internal system for a long time.
ci5er 9y ago
https://www.cbinsights.com/reports/CB-Insights_Amazon-Strategy-Teardown.pdf https://www.cbinsights.com/reports/CB-Insights_Amazon-Strate...

jeron 9y ago

"Selling books to selling computing on demand... That was a big leap, and the most profit generating "pivot" I can think of." is it a pivot if that was the intention from the start?

joncrane 9y ago
AWS was never an intention from the start. Some Amazonian in the mid 2000s saw the opportunity, wrote a three-pager about it, Jeff Bezos agreed, and now we have AWS.
- drewmate 9y ago
  I’d be interested in reading more about this. That employee changed Amazon’s future (and indeed the future of computing in general) immensely. I hope he/she was fairly compensated and relaxing on a beach far from Seattle now.
  - philk10 9y ago
    Try this blog post - http://blog.b3k.us/2009/01/25/ec2-origins.html http://blog.b3k.us/2009/01/25/ec2-origins.html
  - pmiller2 9y ago
    I wonder what the actual likelihood of that is. The stock has increased at least 20x since 2008, so, assuming the employee had options beginning in 2004, they could have made a decent amount of money off that.
  - scarface74 9y ago
    Here you can find an interview of the Amazon CTO back in 2006. http://www.se-radio.net/2006/12/episode-40-interview-werner-vogels/ http://www.se-radio.net/2006/12/episode-40-interview-werner-...
dalbasal 9y ago
I would say so, but that's mostly semantics. Define "pivot" however you like :) But, I don't think amazon of the 90s "planned" on aws in any meaningful way.
mrkstu 9y ago
Doubtful. Too far down the pike. What Amazon is great at is turning its own infrastructure needs into revenue instead of a cost- Marketplaces (White labeling it's shopping market) AWS (Digital Infrastucture) Shipping/Transport (FBA (Fulfillment) first, now SWA (Shipping)) It also leverages revenue streams, to open new markets: Prime Shipping -> Prime Video/Music, Pantry That doesn't even include Fire/FireTv/Alexa ecosystem plays. They have been playing for keeps while others inch along with incrementalism.
- reaperducer 9y ago
  > What Amazon is great at is turning its own infrastructure needs into revenue instead of a cost Let's hope that it decides to offset the cost of all those planes hauling its boxes around the country by selling tickets to paying passengers. It could be Spirit Airlines, but without the terrible customer service, terrible conditions, and nickel-and-diming of its customers. All we want is a safe, reliable, solid, FAIRLY PRICED airline ticket. Do you hear me, Jeff? Hello? Is this thing on?
  - tjr225 9y ago
    Anecdotally, I have never had an issue flying spirit and have done so on many occasions. They have a couple cheap direct flights from KC - Detroit/Chicago (family is right in between) and seasonally Portland - Detroit that are mega cheap
    - reaperducer 9y ago
      I had a Spirit flight to Charlotte that never took off. I ended up having to cancel my trip entirely. And the interwebs are full of Spirit horror stories. Also, conventional wisdom is to not fly Spirit if you're of average height or above.
      - tjr225 9y ago
        I'm 6'1" and I've been uncomfortable on every flight I've ever been on as an adult that was coach...not really special to Spirit.

yomly 9y ago

The hilarious thing was that when I worked at Amazon, the majority of Amazonians I met thought Amazon was a Retail company...

notyourwork 9y ago
It’s not hilarious if your teams focus is retail related.
- kgwgk 9y ago
  And the company focus is retail oriented.
  - oh-kumudo 9y ago
    Not in AWS
    - notyourwork 9y ago
      Retail is an AWS customer, isn't that obvious?

deleted 9y ago

[deleted]

simula67 9y ago

Ideally if Google management wants to run these types of companies, they should pay dividend on the shares, taking money out and then invest in these businesses. The only reason I can think of for allowing Google management to throw other peolpe's money at their pet projects is taxes

jacksmith21006 9y ago
Not following. Paying a dividend and the money is gone versus reinvesting. So the opposite of what you are suggesting so maybe not following?
- simula67 9y ago
  The profits generated from Google's business belongs to the shareholders ( owners ) of the company. If the money can be used to defend the business ( Android, Chrome etc ) it can be - and should be - reinvested. Is self-driving cars related to search ? You could argue that it defends the brand. But otherwise, the money should be paid out as a divident and the cash thus obtained by Google's management ( Larry and Sergey still hold a lot of Google stock ) can be used to fund these type of projects. Other shareholders who do not believe in such projects can invest their dividents in businesses they believe in

saalweachter 9y ago

AWS was surprising. A lot of what Google does, or fails at, makes a lot more sense when you actually think about what its core competencies are: big data, anything that works best with an exabyte of data, a billion CPU-years, and some crazy machine learning / good ol' fashion statistical elbow-grease. It's obvious how this relates to their original business, Search, and how it relates to their more successful spin-offs and their failures. Spam filtering and self-driving cars are more big data problems (though spam filtering is less impressive nowadays), and the Cloud and YouTube make a lot more sense when you realize that Google already runs a really efficient data-center. Meanwhile, eg, Google Reader was something that didn't really need a Google to run, and suffered for it. It's not as obvious to me how AWS grew out of Amazon; it doesn't seem obvious to me that you need that much data center to run Amazon (or at least, Amazon-at-that-time).

dalbasal 9y ago
I wish I'd said it like that. Surprising, for just that reason. Your Google point (besides being a contrast to amazon's surprising athena) is an interesting way of describing things. Youtube, Android and even adwords & web analytics were bought fairly formed, and clearly were quite good already. That's a skill in itself. When you think of examples of ebay, skype and how few buy-outs really do succeed like that. Google could make the web work too. Remember how slow yahoo a basic webmail service was. The idea that they'd make an excel that worked.. it wasn't trivial. But I think you're right on the lead skill. If it works best with an exabyte of data, a billion CPU-years... it works best on a google.
- 220V_USKettle 9y ago
  I think that is an interesting insight - the majority of Google's offerings are from aquisitions of 'established' implementations, whereas Amazon's are developed in-house to solve a pain-point, that is felt by other businesses, too. So, is Amazon really more B2B, while Google is B2C? Is Amazon using e-commerce like a US university looks at undergrads for funding?
  - 9y ago

IncRnd 9y ago

If the leap to AWS had not happened, Amazon would likely not be here today. All of Amazon's operating income comes from AWS. The other departments ranging from moon launches to book selling are just cost centers. http://www.zdnet.com/article/all-of-amazons-2017-operating-income-comes-from-aws/ http://www.zdnet.com/article/all-of-amazons-2017-operating-i... http://www.businessinsider.com/amazon-web-services-cloud-online-shopping-profits-chart-2017-5 http://www.businessinsider.com/amazon-web-services-cloud-onl... https://www.geekwire.com/2016/amazon-without-aws-online-retailer-posted-big-loss-not-booming-cloud-business/ https://www.geekwire.com/2016/amazon-without-aws-online-reta...

kgwgk 9y ago
“Cost center” doesn’t mean “unprofitable department”. And actually two of the three segments appearing in Amazon financial reports are profitable.
- IncRnd 9y ago
  > “Cost center” doesn’t mean “unprofitable department”. That's unnecessarily pedantic. A cost center is an organizational subunit that incurs cost but does not directly contribute to the company’s profits. Since I said "department" and "cost center" it really should be clear what was meant. Why, it is just like the article itself using "Amazon" as both a noun and a verb! > And actually two of the three segments appearing in Amazon financial reports are profitable. Amazon had 6 segments in 2017 not 3. If you look at the Operating Profit, Operating Margin, and P/E considering the context of my comment about AWS vs. the other departments, I think you will see why AWS has kept Amazon (and AMZN) afloat.
  - kgwgk 9y ago
    Using “cost center” in the first place was unnecessarily pedantic. And wrong. According to note 11 in the annual report for 2017 “We have organized our operations into three segments: North America, International, and AWS.”
- Spooky23 9y ago

emodendroket 9y ago

Walmart has got their fingers in a lot of pies too. I am not sure you meant to use them in that sentence anyway because they don't do "car stuff."

thewhitetulip 9y ago

That he came up with AWS tells us a lot about his acumen. Google reportedly has failed to build a viable rival although they had kubernetes in their internal system for a long time.

ci5er 9y ago

https://www.cbinsights.com/reports/CB-Insights_Amazon-Strategy-Teardown.pdf https://www.cbinsights.com/reports/CB-Insights_Amazon-Strate...