Amazon’s laws of the Jungle

1999-06-09

Amazon is getting bullish. No, okay, it has always been bullish. Amazon is getting very big and bullish. The still-to-make-a-profit company has made a spate of investments recently, and not just in its in its traditional over-the-web, commodity markets. It has also commenced selling downloadable music and it has even set up an auction site. It is putting itself in direct competition with the big guns both online and offline, and from eBay to Wal-Mart the competition is rising to the threat. Not content with local battles, Amazon.co.uk has put itself head to head with W.H.Smith Online, with both now offering 50% off books from their own bestseller lists.

Amazon has grown fast and clearly it must act fast if it wants to stay ahead in the game. It is a big game, however, and there is a danger that Amazon spreads itself too thin or makes too many enemies. In the litigation-friendly US, we only have to look at what is currently happening to Microsoft to know how competition between retailers can be a battle in both the storefront and the courtroom. In the words of Sun Tzu, “do not fight a war if you have to fight on two or more fronts”. In Amazon’s case, the numbers of fronts are mounting and there are more than two dimensions to the fight.

(First published 9 June 1999)