The Amazon (NASDAQ:AMZN) Fight
Amazon (NASDAQ:AMZN) is a well-known name all over the world, it’s an American based firm that deals in electronic commerce. It started off as an online bookstore but soon started dealing in DVDs, VHSs, CDs, video and MPS downloads and streaming, along with a variety of software, electronics, video games, furniture, toys jewelry, food and what not. The company has also tried its hand in consumer electronics like Amazon (NASDAQ:AMZN) Kindle e-book readers, Kindle Fire tablet, Fire TV and Fire Phone. The company has had a good run but lately consumers have started complaining of the $99 a year payment scheme for its services, like prime free two day shipping, video streaming and new notable services. In an effort to give its customers something more the firm recently announced its latest release of an advertising-supported video streaming service to start next year. It offers is likely to cost lower than the $7.99 monthly subscription to Netflix (NASDAQ:NFLX).
According to many speculators, this was an attempt to hit directly at Netflix (NASDAQ:NFLX). According to New York Post’s analyst Michael Pachter If Amazon (NASDAQ:AMZN) introduces an Ad supported service and that too without Prime. This will eventually put Netflix (NASDAQ:NFLX) out of order. Who wouldn’t opt for this much reliable and cheaper service.
But for many speculators, the real reason behind this attempt is to attack GOOGLle’s (NASDAQ:GOOGL) YouTube. As Netflix (NASDAQ:NFLX) might be considered a threat to Amazon (NASDAQ:AMZN) but bringing down GOOGLle (NASDAQ:GOOGL) will be much more profitable for the firm. As Amazon (NASDAQ: AMZN)’s market cap is seven times that of Netflix (NASDAQ:NFLX) but when compared to GOOGLle (NASDAQ:GOOGL) it’s less than half. So it seems that even though Netflix (NASDAQ:NFLX) might cause collateral damage but beating YouTube might steal the show.
Looking at Amazon (NASDAQ:AMZN)’s competitor list, besides GOOGLle (NASDAQ:GOOGL), the company’s only strong component is Apple (NASDAQ:APPL). Amazon (NASDAQ:AMZN)’s competitors are fast at making money and sit on the mile of cash for years ahead. Amazon (NASDAQ:AMZN)’s next strategy is to steal away this fame, cash and profits from its competitors and make them compete on its own terms.
Amazon (NASDAQ:AMZN) agrees that in the past it had made many big mistakes and has suffered from them. But the company claims it has also learned through those mistakes. It believes that the Fire Phone didn’t gain the popularity it deserved as it was priced too high. Amazon (NASDAQ:AMZN) will avoid making such mistakes again, when standing against YouTube. Since GOOGLle (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are the only firms that Amazon (NASDAQ:AMZN) care about to an extent to beat them. But as these two firms are already well established and enjoying high cash benefits, it will take some time for Amazon (NASDAQ:AMZN) to target them and beat them and eventually stand at the same position as them.