Everyone Is Scared of Amazon – And They Should Be

May 4, 2012
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Everyone Is Scared of Amazon – And They Should Be

There was a time when some of the biggest electronics retailers in the world had issues with Amazon. They realized that the online retail giant was able to beat them on price, and with more and more people coming to its site, it had the ability to take them down.

The past is littered with companies that tried to go up against Amazon, including Circuit City, CompUSA, and others. Best Buy is now having some trouble competing against online giants like Amazon, and by the look of things, eventually, only mega retailers like Walmart, as well as small boutiques, might survive the online onslaught.

But over the last couple of years, something rather interesting has happened with the way companies view Amazon. As the retail firm has entered other markets, including Web solutions, e-readers, and tablets, it has caused many other firms to take notice. And in the process, the scare factor surrounding Amazon has grown with the online company.

Nowhere is that more evident than in Target’s recently announced decision to stop selling the Kindle in its stores. Barnes & Noble had been selling the Kindle line for two years when the decision was made, and by all accounts, sales were strong. It’s an odd move, for sure. But it also underscores the unique position Amazon finds itself in.

The sheer number of companies that are scared by what Amazon might do next might be shocking, but the size of those firms might be even more surprising.

Consider Google. The search giant is running the most popular mobile operating system in the world, its Android Market is performing exceedingly well, and, oh yeah, its online business is growing. Surely it wouldn’t be scared of Amazon, right?

Think again.

[aquote]Amazon has some serious leverage in the Android ecosystem[/aquote]

Google has been trying for years to crack the e-commerce code, and so far, it has failed as Amazon’s business continues to grow. And with the Kindle Fire quickly establishing itself as the most sought-after non-iPad tablet on the market, Amazon now has some leverage in the Android ecosystem.

Even more concerning for Google is the fact that the Amazon Appstore continues to grow and attract developers. Unlike Apple, which controls all application revenue in iOS, Google has left its marketplace vulnerable. And Amazon has taken advantage.

But perhaps the fear companies have for Amazon goes beyond its prowess in certain markets. Unlike Apple, Google, and Microsoft, which seem to often find their way to regulatory scrutiny, Amazon flies largely under the radar. The retail giant is made to look like a consumer’s hero in the e-book antitrust lawsuit brought against Apple and e-book publishers, and for the most part, consumers trust the company.

Amazon has found its way into the rarified position of being seemingly well-liked by government regulators and consumers, alike. And for competitors or would-be competitors, that’s a dangerous combination.


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