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I wish they'd try harder with their payments business - they could be in a position to compete with Stripe or Paypal but instead force users to pay with their Amazon accounts. That doesn't make sense as a business strategy to me.

Wouldn't that be a blatant abuse of dominant position?

If they had any monopolies, as interpreted by the us government, that could be an issue.

It's interesting you didn't mention Square, I think a sign of how much Square has fallen. Two years ago payment and Square were often mentioned in the same breath around here.

I just opted to mention Stripe and Paypal because PayPal is still the dominant force overall, and Stripe has the kind of API that developers love - a combination that Amazon is capable of creating.

Square is primarily focused on working with brick & mortar vendors to accept physical credit card payments. Stripe and Paypal are solutions for individuals, businesses, and retailers to accept payments online. I think iLoch was suggesting Amazon should compete on the latter front.

Is Square not doing well? I've actually been seeing it a lot more recently -- lots of food carts and street vendors do the iPad-and-cardreader setup, and I've seen a number of the POS systems in coffee shops and the like. I've also noticed cab drivers using it.

I'm not seeing people use it for splitting bills and the like as much, but I got the impression Square was making a conscious shift away from that market and toward small brick-and-mortar (or truck-and-van?) businesses.

> Is Square not doing well?

Square reached too high a valuation off of low value business with merchants. They have burned through staggering amounts of cash, canceled high profiled products, and purchased payment-unrelated startups and made other changes. The high valuation they've had in funding rounds makes them an unattractive purchase because the business they have isn't worth what it would cost. To get new money they'd have to do something like foursquare did to raise money, which dilutes everyone's current equity to very little.

They probably can turn it into some kind of business but the growth has stalled, the equity employees have is at risk and they've all but lost the sparkle that excites the press when they talk about the company. They could gain momentum back, it's not impossible, and they have really, really good engineers and designers so that's a plus.

So, they'd have to, you know... actually have revenue in excess of their expenditures? Shocking!

I don't believe this. Looking up recent "Square should panic" articles [1][2], it seems they have about $350M cash on $100M/year losses, so roughly 3.5 years of runway left.

The key point about Square's business is that they're in a new market. Their primary users are small businesses that would not otherwise be able to accept credit cards. I just bought a bottle of vodka directly from a distillery using Square: they had no cash register, no front office, you walk up to the door and the guys who run it will sell you a bottle on an iPad. Last Christmas, I bought our Christmas tree directly from a family-owned tree farm in the Santa Cruz mountains using Square. I paid for Maker Faire with Square.

If you follow Steve Blank's Lean Startup thought process, new markets take an average of 7 years to reach profitability. It's not just a matter of convincing customers to switch; you have to wait for people to enter the new lines of business that you have made possible. That's finally starting to happen for Square: I see people on HN down on it, but I talk to their actual customers, the ones who pay money for it, and they are all very happy with it.

[1] http://www.forbes.com/sites/stevenbertoni/2014/04/21/why-squ...

[2] http://fortune.com/2014/05/14/squares-status-its-complicated...

> If you follow Steve Blank's Lean Startup thought process

I know an engineer who works at Square, they are not a lean startup, they have all the various excesses that people love to hate which is expensive catering, free shit, expensive furnishings. Square is not lean, and when you're losing $100,000,000 a year, I don't care if you're an ancient business like Ford or IBM, that's not good, and you wont have 7 years to reach profitability profitability, you got about half that, if you don't hire anymore. If Square stops hiring, that's also not good. They're going to have to let people go, like their recruiting operation, which is world class.

> they are not a lean startup

"Lean" in this context doesn't mean "cheap." http://steveblank.com/2009/11/02/lean-startups-aren%E2%80%99...

The key point from the article: "If you confuse Lean with Cheap when you do find a repeatable and scalable sales model, you will starve your company for resources needed to scale."

I'm pretty familiar with the lean methodology and I'm a bit confused how you could use it to scale up to 100MM/year losses. If they had a repeatable and scalable business model, surely they should either (1) be making money or (2) have that 100MM/year make them tremendous money fairly quickly (as they scaled up so soon, clearly the got the evidence of profit very quickly, which should mean a one or two year turnaround on investment, tops, given their timeline?). Clearly this isn't happening, as far as I can tell, because they're still losing money.

Your point about lean and cheap is fair but a bit confusing in context.

It's really easy to scale up to large losses: hire more people. Which is what Square's been doing in spades. Amazon did this as well, they went public in 1997 on huge losses and didn't break even until 2003, and even now the company is basically run at break-even with all revenues reinvested into the company.

The reason this works is because once you have that repeatable and scalable business model, you can be fairly sure that hiring a person (plus all the other operational costs) at $X will bring in >$X in new business. So you spend money for growth; the expenses are booked this year, the revenue doesn't happen until next year when contracts are inked, product improvements are launched, more people hear about Square, etc. The number to pay attention to is gross margins (the amount of money they make off each transaction); the 2nd article I linked lists that at 34%, which is comparable to Amazon's 30% and Apple's 39%. As long as that is positive and high enough to cover fixed operational costs, Square can instantly get to profitability by laying off people (or, with current revenue growth, simply by slowing down hiring).

The risk with this strategy is that the market turns out to be smaller than expected, and your product appeals only to a small number of early adopters. Growth then slows down markedly right as expenses ramp up, and there's no way to jump-start growth again. I think this is what's happened with Quora. Square seems different, though: the customers I've talked to are decidedly non-technical, and yet they love the product.

> I've actually been seeing it a lot more recently

Me, too. I live in Japan and it blew me away when I saw Square readers for smartphones in convenience stores the other day.

Now that Amazon's competing in that space as well (http://localregister.amazon.com/) I wonder how Square will leverage their userbase...

Well, if they were a payment provider they might end up providing services to their competitors. Maybe they don't want to give away a single benefit.

Amazon is in many ways a more interesting company than google. Amazon's offerings are becoming more and more diversified and they're industry leaders in more than one area. And they are making a strong push at maintaining growth/expansion.

Amazon has a strong history of expanding their business and building new highly valuable products with staying power. Google has only expanded a little in terms of actual functional products, most of their additions have been via acquisitions, and they have not done well at monetizing or even supporting many of their new product offerings. Google is primarily search + backbone ISP, that's where almost all of their revenue comes from, everything else falls into a tiny "other" category. Indicative of their utter inability to effectively spinoff new products and high revenue businesses.

The only downside is that the work environment is more than a little dysfunctional.

I wouldn't say gmail, maps, chrome, docs, calendar indicate 'their utter inability to effectively spinoff new products.' Also, buying a product doesn't mean you're done with it. I personally think what the folks at Android, Youtube and Nest etc have been doing is incredible.

How many of those are actually well monetized? Almost none. How many of them contribute a major portion of revenue back to the company? Absolutely none of them.

Google is good at launching products, they're not good at maturing them. Chrome is a fantastic piece of software, and it fulfills it's purpose for google quite well, but it's not a product in the way that AWS or the kindle is a product.

Google is good at development, excellent in fact. But they get stuck in the hard middle parts of product development. They fail to monetize products well and they fail to mature products into their full potential. Partly that's because product development at google is basically just play-time. As I said, revenue for google derives from a tiny subset of products (search and network almost exclusively), everything else is just a side project. As such, when a product doesn't meet its potential or doesn't bring in billions in revenue that is not an issue at all at google, it's the expected case. In some ways that's good, but in other ways it's bad. Docs/drive has stagnated relative to what it could have been for years.

Amazon is almost diametrically opposite. They productize well, extremely well, but they have a horrid working environment in regard to devs.

They aren't based in the valley, but Amazon does have a large presence in SV - both it's Lab126 office(s) in Sunnyvale/Cupertino and SF offices.

I always wondered why Amazon never launched a search engine. The only thing I could think of was a fear of invoking regulation.

They do have the world's best search engine for products.

Not if you are looking for something outside the typical scope.

I buy tons of wierd automotive parts that are not 'well known' and usually end up using Google to find products on Amazon.

Their search engine is actually pretty limiting in some ways.

There's truth in this. Generally, I search for part numbers on google or rockauto, and then you can find them on amazon. The UX for finding parts that fit your car on amazon is either confusing or broken, I'm not sure which.

Both. This may because of the existing parts distribution system already in place. It doesn't see to be a place they have been putting much effort into. There wasn't even auto part search until recently.

Really? I thought they have the worst. Check https://twitter.com/chx/status/360508662227292160 this for example.

I tried to reproduce this result. After searching "Nexus 7 bluetooth keyboard case", I got a page full of relevant results. I could get to a page full of awful results by first selecting a department, then sorting by average rating.

Not really, almost every search requires me to apply filters. I wouldn't say it's very smart at all.

Last I checked, it's impossible to do a useful "sort by price" for many items. I was looking for...I think it was a 3.5mm audio splitter, and I wanted to find the cheapest one. Searching by relevance mostly returned 3.5mm audio splitters, but dozens and dozens in no particular order. Searching by price returned every single thing in the database with "splitter," "audio," or "3.5mm" in the name or description. Frustrating.

They did launch a meta-search site, a9.com, in 2004 and discontinued it in 2008. http://en.wikipedia.org/wiki/A9.com

I think A9 still exists as a search subsidiary, it's just that the consumer-facing portions were discontinued. A lot of A9 alumni now hold leadership positions in Google Search.

They're not as secretive as Apple. We use AWS and I'm often talking to our account manager or support, and they're always talking about upcoming products and features in the pipeline. They just don't give ETAs, which is sensible, to ensure customers aren't banking on feature X being available on date Y.

They also advertise some of their working practices when it benefits them (eg datacentre physical staff don't have logical access), but to be honest, there aren't a lot of big companies out there that openly advertise their internal processes. They're also being extremely open about wanting to be The Middle Man when it comes to cloud, nothing stealthy about it at all. I just went to a free AWS summit, where the VP giving the keynote said as much - how is it possible to accuse them of secrecy when they paid for a big venue for me to visit, just in order to tell me exactly that factoid?

They are worth watching due to monopolistic concerns, sure, but there's so much FUD out there about them.