America's willingness to back the pioneering entrepreneurs that have transformed its industries and fuelled its economy should not be underestimated. From
Loyalty to the visionary may go some way to explaining why, the day after Amazon warned that its operating loss in the coming September quarter could be as high as
The heads of British chief executives have rolled for less. Tesco's business may be shrinking, but it was still making a pounds 3bn profit when
But reaction to Amazon's profit warning among the analysts who set the tone on
The reasons given for the upcoming losses are a very diverse range of aggressive, well-funded investments. Amazon is investing in faster dispatch for all goods, with more Sunday and same-day deliveries. More ambitiously, it wants to become an online grocer, bringing fresh food to the doorstep just like
Even more ambitiously,
Amazon may make more money from general merchandise, but its window display has always been entertainment - books, music, films, TV series; a sector that will sooner or later be sucked into a black hole. Digital downloads are doing away with the need for warehouses full of CDs and box sets.
And Amazon is far from dominant in the download arena. The device makers and software writers -
Creating hit television series, running an online supermarket, making smartphones: these are difficult things to do well, even for companies that specialise in only one of them at a time. None the less, Amazon's can-do approach has proved doubters wrong in the past - most notably with its Kindle tablet.
But Bezos wants customers to live in a company town, in the same way that some of its authors write books that are published by Amazon, reviewed by Amazon customers, sold in its online store, and read on its Kindles. The model has a niche in the book trade, but how many people will watch The After on a Fire TV box, while munching popcorn delivered by AmazonFresh?
Amazon should focus on retail and forge alliances - with device makers, TV companies and studios. Unfortunately, while Bezos has achieved much, his turbulent relationship with the publishing industry suggests alliances are not his strong suit.
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