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Thats where I'd go first - but I think it's also worthwhile to break the shopping side of the business up to, into amazon eCommerce platform, amazon the seller

by Aloha 3y ago

Thats where I'd go first - but I think it's also worthwhile to break the shopping side of the business up to, into amazon eCommerce platform, amazon the seller of goods, Amazon logistics, and amazon fulfillment services as well - that would still leave a bag of leftover parts and businesses.

JumpCrisscross 3y ago
> it's also worthwhile to break the shopping side of the business up to, into amazon eCommerce platform, amazon the seller of goods, Amazon logistics, and amazon fulfillment services as well It's unclear how sustainable these parts are on their own. The incrementalist move would be to sever the money spigot that is AWS from the lower-margin parts.
- Aloha 3y ago
  I dont know if Amazons market balance is sufficiently altered by just severing AWS.
  - JumpCrisscross 3y ago
    > dont know if Amazons market balance is sufficiently altered by just severing AWS I don't either. Hence the caution. The deference to the status quo. It would be a mistake to over-sever and destroy a valuable, value-producing business out of haste. Perhaps the other legs' enduring advantage is merely an artifact of cheap internal capital. Perhaps not.
    - Aloha 3y ago
      My understanding of antitrust law is that's not a prime consideration.
      - JumpCrisscross 3y ago
        > that's not a prime consideration I don't have a deep understanding of the law in this matter. But I have seen the sustainability of units spun off as part of merger approvals discussed in court cases. (Counterfactual: Internet Explorer not being a viable standalone business wasn't a valid defence by Microsoft.)
  - NBJack 3y ago
    It would hurt them a lot. I mean a lot a lot. But maybe not in the way some think it will. Look back historically at when AWS details were suddenly included in the market earnings around 2015. I encourage you to draw your own conclusions, but I'm convinced they made such a move to keep investors happy despite the economic reality of razor thin profit margins in retail. Then there's how much of Amazon retail is actually powered by AWS.
    - lotsofpulp 3y ago
      Retail is a low single digit profit margin business, as evidenced by many publicly listed retailers financial reports going back decades. Scalable software is a high profit margin business. AWS is not subsidizing Amazon retail and logistics. AWS and Amazon video and other digital products is why Amazon is worth $1.3T while Walmart is worth $428B. The profits are in the digital products.
- lotsofpulp 3y ago
  Amazon retail and logistics were plenty sustainable before AWS profits came along. https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit-margins https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit... https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-graphfarm/ https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-gr... Even Walmart and the other retailers have the same 2% to 5% profit margins for their entire existence, without selling high margin web services. https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr...
tivert 3y ago
>> For starters, separate AWS from retail/logistics. (There is something loosely analogous to dumping in a high-margin business entering a low-margin trade.) > Thats where I'd go first - but I think it's also worthwhile to break the shopping side of the business up to Splitting up the ecommerce side of the Amazon isn't just worthwhile, it's necessary. > into amazon eCommerce platform, amazon the seller of goods, Amazon logistics, and amazon fulfillment services as well - that would still leave a bag of leftover parts and businesses. There's more ways to do a break up than by business function. It might make more sense to just divide it all down the middle to create two successor companies (e.g. one gets half the warehouses, and the other gets the other half). Then you have two peer competitors with all the skills, knowledge, and culture to compete viciously against each other. The biggest issue there is which one gets that branding, which I think should be solved by neither getting it. They should come up with new identities, and amazon.com becomes a simple ecommerce directory.

by Aloha 3y ago

JumpCrisscross 3y ago

> it's also worthwhile to break the shopping side of the business up to, into amazon eCommerce platform, amazon the seller of goods, Amazon logistics, and amazon fulfillment services as well It's unclear how sustainable these parts are on their own. The incrementalist move would be to sever the money spigot that is AWS from the lower-margin parts.

Aloha 3y ago
I dont know if Amazons market balance is sufficiently altered by just severing AWS.
- JumpCrisscross 3y ago
  > dont know if Amazons market balance is sufficiently altered by just severing AWS I don't either. Hence the caution. The deference to the status quo. It would be a mistake to over-sever and destroy a valuable, value-producing business out of haste. Perhaps the other legs' enduring advantage is merely an artifact of cheap internal capital. Perhaps not.
  - Aloha 3y ago
    My understanding of antitrust law is that's not a prime consideration.
    - JumpCrisscross 3y ago
      > that's not a prime consideration I don't have a deep understanding of the law in this matter. But I have seen the sustainability of units spun off as part of merger approvals discussed in court cases. (Counterfactual: Internet Explorer not being a viable standalone business wasn't a valid defence by Microsoft.)
- NBJack 3y ago
  It would hurt them a lot. I mean a lot a lot. But maybe not in the way some think it will. Look back historically at when AWS details were suddenly included in the market earnings around 2015. I encourage you to draw your own conclusions, but I'm convinced they made such a move to keep investors happy despite the economic reality of razor thin profit margins in retail. Then there's how much of Amazon retail is actually powered by AWS.
  - lotsofpulp 3y ago
    Retail is a low single digit profit margin business, as evidenced by many publicly listed retailers financial reports going back decades. Scalable software is a high profit margin business. AWS is not subsidizing Amazon retail and logistics. AWS and Amazon video and other digital products is why Amazon is worth $1.3T while Walmart is worth $428B. The profits are in the digital products.
lotsofpulp 3y ago
Amazon retail and logistics were plenty sustainable before AWS profits came along. https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit-margins https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit... https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-graphfarm/ https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-gr... Even Walmart and the other retailers have the same 2% to 5% profit margins for their entire existence, without selling high margin web services. https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr...

tivert 3y ago

>> For starters, separate AWS from retail/logistics. (There is something loosely analogous to dumping in a high-margin business entering a low-margin trade.) > Thats where I'd go first - but I think it's also worthwhile to break the shopping side of the business up to Splitting up the ecommerce side of the Amazon isn't just worthwhile, it's necessary. > into amazon eCommerce platform, amazon the seller of goods, Amazon logistics, and amazon fulfillment services as well - that would still leave a bag of leftover parts and businesses. There's more ways to do a break up than by business function. It might make more sense to just divide it all down the middle to create two successor companies (e.g. one gets half the warehouses, and the other gets the other half). Then you have two peer competitors with all the skills, knowledge, and culture to compete viciously against each other. The biggest issue there is which one gets that branding, which I think should be solved by neither getting it. They should come up with new identities, and amazon.com becomes a simple ecommerce directory.