> how you'd break it up?
For starters, separate AWS from retail/logistics. (There is something loosely analogous to dumping in a high-margin business entering a low-margin trade.)
For starters, separate AWS from retail/logistics. (There is something loosely analogous to dumping in a high-margin business entering a low-margin trade.)
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.
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.
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.)
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.
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.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit...
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-pr...
> 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.
Forces the non-AWS units to compete without cheap capital.
> solves none of the concerns raised by the FTC
Sure. So far, I will reflect care for their concerns inasmuch the courts do. (“Pressuring sellers” and merely “setting prices” isn’t illegal under current law. Maybe it should be! But that isn’t the FTC’s job when it brings enforcement.)
and then maybe put the streaming services and media production into it's own entity.
you could even split kindle+audible out, too.