41–50 of 95 posts
Interestingly, the article suggested that Amazon, in being both the distributor and the cloud provider, may be able to increase their advantage by exploiting information they hold on competitors.
While prices are low, another aim of governments should be to keep wages high enough to maintain a standard of living. I think the fear around Amazon isn't that it is going to all of a sudden raise the price of goods from Whole Foods, but that they will reverse the employee friendly aspects of the company. When prices are low but wages aren't high enough to guarantee that people can take advantage of those lower pric…
There is another side of that which I've noticed as an American expat. If one country or industry decides to keep wages high, there are at least two effects. 1. The minimum required experience is also increased. You see this in industries where it's very difficult for new blood to break into because the minimum required experience/skill level is above an "entry level" position because the pay expectations of the indu…
What are examples of such industries?
Earlier quoted context omitted.
This is a really amazing and clever idea on Amazon's part: Taking a system or technology that you've already built and are maintaining, and make it accessible to others as a platform. Then continue using that platform as if you were a/the best customer. They did it with AWS, they've done it with their retail business, and now they're probably going to do it with AmazonFresh/WholeFoods. It makes a lot of sense, and it…
This is a persistent myth that needs to die, AWS was not built to host their websites, and indeed did not do so for many years after it was established. AWS wasnt their "spare capacity" nor was it them exposing their internal systems to the world so they could sell them off, It was developed from day one as a public facing service.
Ben Thompson has a great take on this... https://stratechery.com/2017/amazons-new-customer/ Essentially amazon develops services and buys the best customer for said services to ensure they get used.
This is a really amazing and clever idea on Amazon's part: Taking a system or technology that you've already built and are maintaining, and make it accessible to others as a platform. Then continue using that platform as if you were a/the best customer. They did it with AWS, they've done it with their retail business, and now they're probably going to do it with AmazonFresh/WholeFoods. It makes a lot of sense, and it…
Earlier quoted context omitted.
The conglomerate discount is real - about 10% on average in developed countries. This applies to public companies, so is a revealed preference of institutional and retail investors, not VCs and angels.
Okay, well then, thanks for pointing that out. I retract my previous statement and substitute it with something more like: The discount investors apply to conglomerates is linked to perceived lower risk. So while it might not be accurate to say investors want smaller, nimbler, more focused companies without specifying which investors, it can be accurate to say something like investors looking for a higher rate of ret…
But I don't think that's what the conglomerate discount is, which I believe says that the components of a conglomerate are worth more than the conglomerate itself. More precisely, "Conglomerate discount is calculated by adding an estimation of the intrinsic value of each of the subsidiary companies in a conglomerate and subtracting the conglomerate's market capitalization from that value." [1]
[1] http://www.investopedia.com/terms/c/conglomeratediscount.asp...
Earlier quoted context omitted.
Wage regulation is capitalist? Sounds pretty central-planning to me.
i agree! in fact, you know what would be a really efficient form of capitalism? what if we just eliminated wage regulation, and the marginal costs of workers to our business entirely, by making them slaves!
Your premise is incorrect and historically ignorant. Slaves are net more costly and drastically less efficient than free employees. George Washington, among numerous other slave owners of the time, for example wrote about that fact indepth. The net cost of workers skyrockets and their productivity implodes, in the case of slavery. Washington made the economic point that with slaves, he became entirely responsible for the cost of their existence, in all regards (shelter, food, health, etc), and their work output was at best on par with or below that of free labor (which is exactly what one would expect). As a system, slavery was a failure morally and economically.
I get that this is groundbreaking and different this time, but isn't this just buying a vertical?
It's GM buying Hughes or Perot. Or Berkshire buying company xyz. Or GE buying its hundredth company. Or Walmart getting into xyz category. Or Google buying Nest & Boston.
The sensationalism is courtesy of Bezos nearing the richest person on earth status combined with Amazon's increasing pervasiveness in the US economy. It's the hot new new story of the moment to write sensationalism around, spin up some fear, whatever, gotta drive those clicks. It has so many angles to play on, it has even got Trump courtesy of the Trump/Bezos feud, what more could they ask for.
Earlier quoted context omitted.
> that people are perfectly fine with Amazon being a conglomerate What is this supposed to mean? Is there supposed to be something inherently not-fine with a conglomerate? If conglomerates survive because they're better able to deliver goods and services more efficiently then great. As another comment pointed out[1], we are surrounded by conglomerates.[2] Other conglomerates that have delivered things people love inc…
Is there supposed to be something inherently not-fine with a conglomerate? Some people think they have a tendency to be inefficient, as high-performing areas of the business waste money subsidising low-performing areas of the business. And low-performing areas are insulated from free market feedback, like going bankrupt or investors leaving. Of course, some of this stuff is only obvious with hindsight. It was probabl…
Earlier quoted context omitted.
There is another side of that which I've noticed as an American expat. If one country or industry decides to keep wages high, there are at least two effects. 1. The minimum required experience is also increased. You see this in industries where it's very difficult for new blood to break into because the minimum required experience/skill level is above an "entry level" position because the pay expectations of the indu…
>> industries where it's very difficult for new blood to break into What are examples of such industries?
Earlier quoted context omitted.
i agree! in fact, you know what would be a really efficient form of capitalism? what if we just eliminated wage regulation, and the marginal costs of workers to our business entirely, by making them slaves!
> what if we just eliminated wage regulation, and the marginal costs of workers to our business entirely, by making them slaves! Your premise is incorrect and historically ignorant. Slaves are net more costly and drastically less efficient than free employees. George Washington, among numerous other slave owners of the time, for example wrote about that fact indepth. The net cost of workers skyrockets and their produ…