Summary – Full article here
Amazon is both a direct retailer and a near indispensable platform for competing resellers.
In that latter capacity, it sets the rules and it can tilt the game in its favor and extract most of the value and valuable data and information.
That information allows it to start competing businesses by picking off its merchants’ best-selling products.
It’s difficult to see how this can be stopped bar action by competition authorities.
The year 2017 was certainly the year of big tech rising. FANG stocks, like Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Netflix (NASDAQ:NFLX), have risen sheer inexorably:
And there seems to be good reasons for most if not all the rise of the shares of these companies. Facebook and Google have basically cornered the online ad market and they are now responsible for nearly all of its growth. From Business Insider (our emphasis):
The 10 leading ad-selling companies accounted for 73% of total revenues in Q4 2016, according to the report. So who are these 10 companies that grab the largest share of these revenues? The report didn’t say. But analysts for the Pivotal Research Group, cited by Reuters, reported the only two names that really matter: Facebook and Google. In terms of the industry growth, so in terms of the 22% or $12.9 billion year-over-year increase in total internet advertising revenue, Facebook and Google together grabbed 99% of the growth! They’re sitting at the sweet spot. Everyone else is fighting for crumbs.
And of course this sets up a virtuous cycle as their platforms become more useful for advertisers and less intrusive for users and it allows them to gather even more data about its users, the input for even better targeted ads, etc.