Fast Company

Why Amazon Will Win

Its retail engine keeps humming, and
its ambitions feed the beast.

At first glance, Jeff Bezos's e-commerce giant looks like it would have a hard time stacking up against the other three. Amazon's profit margins are lower than that of Google and Apple, and as a business that depends on fulfillment centers, its capital costs are higher than purely digital enterprises. What it does have is Bezos's almost-Jobsian ability to anticipate what's next and invest in it early. Over the past few years, Bezos bet on e-readers and cloud outsourcing, and each has paid off. Kindle is the dominant e-reading platform, the iPod of the book world, and now it's poised to seize the market for low-priced tablets. The tablets will feed Amazon's thriving digital media businesses--not just books but movies, music, and apps--as well as make it even easier to buy almost anything through Amazon. Meanwhile, slews of hot startups--as well as the likes of Netflix and even Apple--rely on Amazon Web Services to help run their businesses.

At the same time, Bezos continues to invest in e-commerce, buying up any company that poses a threat to his empire (notably Zappos). Analysts predict that Amazon will hit $100 billion in revenue by 2015, 21 years after its founding. Walmart took 34 years to make that mark.

$900 Amazon Prime, the $79-a-year subscription service that gives customers free two-day shipping and access to movies and TV shows, creates Amazon addicts: In the year before a customer joins, he spends $400 a year, on average; in the year after, $900. Prime growth exceeds 50% annually.

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