Despite solid earnings results across the tech industry, shares in Facebook (NASD: FB) and Apple (NASD: AAPL) are down – yet Amazon (NASD: AMZN) is up. Amazon Chief Executive Jeff Bezos has long been an anomaly in terms of tech strategy -he is known to pressure executives and innovators to write essays and to be thoughtful and comprehensive when taking the podium at his strategy meetings. His approach is decidedly academic, more so than classic business.
The approach Bezos has taken has long been unique, and perhaps that is one reason that Amazon is so successful. While Apple enjoys reaping massive margins, Amazon takes an entirely different approach to their distribution strategy. Amazon often sells products close to cost, if not below, and they he invades markets where they normally wouldn’t belong – like consumer electronics at the time he was selling books, cloud services at the time he was big-retail, or devices when he became a publisher.
Amazon enjoys breaking the traditional rules, and despite running a successful business for well over a decade now, the firm is still largely run like a bunch of start-ups. Bezos insists that the firm takes the long view, in contravention of Wall St culture that puts so much emphasis on short-term results.
Amazon is arguably the most successful Cloud company out there, unparalleled in the online business, and has taken customer service to a new level. The firm has ramped up its apps market to bring it to the top of the tree in terms of monetization, within a year of launch, is in the device business with maybe a smartphone soon and leads the way in crowd labor. Amazon has also taken over from Apple as the leading ecosystem management company. A lot of what Amazon does is encourage other businesses to build on its platform, so the crowd community builds around Mechanical Turk, Kindle fire and its apps market attracted developers very quickly, its Cloud services power SaaS businesses, in publishing Amazon is a key enabler of the little guy, the promise Jobs made soon after the iPhone launched.
Collectively, these efforts are coming through in the stock price. Although the firm is very different than Apple and Facebook, their shares are often talked about together, as leaders in the new economy. While Facebook still seems to be figuring out who they are, Amazon is firmly entrenched as number one in online retail, and growing new revenue opportunities that will surely please investors in the coming years.
