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October 6th, 2000

The Rise and Fall of

Several years ago, Al Gore helped create the Internet. And people thought it was smashing. But then, companies started realizing the potential in the net. It started small, with the equivalent of online brochures. Then, e-commerce came through. The early adopters had to fend off accusations of insecure connections and consumer fear. Today, you can set up a store at no cost. You don’t have to deal with anything: supply, demand, credit card transactions. Nope, it’s easy now.

Of course when business gets involved in something, the goal is to make money. came around, said, "We can sell books online at a good price." And they did. Then they added CDs to the mix. They sold well. Soon, videos were added. "Sure, we aren’t making money now," they said, "but we will in the future." This, as other things like auctions, home and garden tools, toys, electronics, software, and everything short of food became available. With it grew problems: navigation became a pain in the rear, people were getting charged different prices, and lots of other debacles.

Somehow, Amazon explained its way out of everything and came out looking sharp. "Sure, we aren’t making money now", they said, "and our stock has lost about 70% of its value, but we will in the future." Now Amazon had added cameras, but not furniture due to the death of, its partner. Need a PDA and the new Radiohead disc, along with a stuffed animal for the kids? Got it.

But a business is supposed to make money. Amazon hasn’t made a cent, and there has been wild speculation about when they’ll make a penny. Some people have predicted that Amazon will wither and die very soon because of this continued expansion.

If Amazon stays in business, chances are they’ll continue to expand until they’re a "soup to nuts" operation. They already have ties with Kozmo and Webvan (both of which have been hurting lately), but have yet to really exploit them. While the idea of making all of Amazon’s inventory available in a particular time window like Webvan offers is tempting, it’ll cost even more money. Where’s it gonna come from? I’d suggest, instead, that Amazon break off its expansion plans and go back to doing a few things well: books, music, DVD, software.

If Amazon goes under, it’ll be a sad event. Not because of their silly 1-Click Shopping patent, or Affiliate Program patent, but because someone really gave this whole net business thing a go and failed. We’ll have to rely on brick-and-mortar stores and BNM online storefronts instead. And there’s a good chance the stock market will take a dive on the demise of Amazon.

All told, I like Amazon. I buy from them semi-regularly, and while their site isn’t a piece of cake to use, it’s not horrific. Customer service is pretty sharp too. But, if you’re not making money and not getting any money… it’s time to go home. -pm

Posted in Technology

Faye July 29, 2009, 4:43 pm

Jest saying: it’s 2009, and Amazon is still around.
i don’t know about their stock or whatever, but to my eyes they seem to be going strong (i bought a few things off there 2 weeks ago)
and, now they do sell food…

strange how times change, huh?

Paul October 7, 2010, 1:59 pm

Indeed Faye, visitor from over a year ago!

This particular line from my Ping was prescient: “If Amazon stays in business, chances are they’ll continue to expand until they’re a “soup to nuts” operation.”

…and they pretty much have and, more importantly, they’re doing it well. I’m glad they’re still here and didn’t listen to my advice to going back to selling just books, DVDs, and CDs.

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