I love amazon. They have refined their operation and it works well, but unfortunately, they are about to become extinct. When I say ‘about’ it could be longer than a decade but it will happen. As I’m writing this Jeff Bezos is probably making his exit strategy.
Here is how it will happen:
Basically, after its all said and done Google will be to Wal-Mart as Amazon will be to K-Mart. Yup. Jeff did an outstanding job with Amazon but in some games even that doesn’t matter. The problem with Amazon in this game is they are just one dimensional where as Google will exist (and dominate) in five dimensions. When you compete with the likes of Amazon you can’t really beat them on anything except the things that “appear” to be unchangeable. In a nutshell Google will be able to offer merchants ( and themselves) significantly reduced credit card fees/ shipping fees / shipping time / advertising (search) fees / and other operation related fees. From a consumer standpoint they will own 80% of the hardware market ie. new cell phones by Motorola that dock and replace laptops and computers. This will come at a time when Merchants will be desperate for a solution after being uplifted then battered by Google. So the final analysis will be: Extremely Low Cost Merchant Solutions + New Customer Benefits + Heavy Organic Search Petting + Moving Competition to the Back Row + New Consumer Hardware Device Domination= Amazon (and all etailers) being reduced to gnats on the ass of an elephant.