Just a week after the New York Times called for more balanced coverage of Amazon’s book business, the call seems to have been taken up by those across the media. One piece from Slate hits some great points on why Amazon is actually a force for good. The piece begins by making light of predictions about what Amazon will do with its market dominance at some point down the road. On what Amazon decides to do with its vast earnings, you have this:
Instead of rigging the retail business in its favor by fattening its margins and exploiting its dominant position in a handful of niches, it is so cutthroat that it sometimes appears to be cutting its own throat, as evidenced by the fact that the company loses a boatload of money.
Bezos is, for whatever reason, less interested in goosing Amazon’s stock price than in building new fulfillment centers, investing in new technologies, and doing all kinds of other things that involve more actual engineering than financial engineering.
I love that last bit (emphasis mine).
More from Slate:
But what about the incentive to engage in the kind of complex coordination that creates enormous value, that raises productivity and delivers lowers prices, that can’t actually be patented? When we decide that Amazon is just a little too innovative and a little too tough, what is the message we’re sending to the next entrepreneur who is debating whether to take on the thorniest challenges?
… having the government step in and squash Amazon before it actually uses its (supposed) pricing power to screw consumers will likely yield less innovative entrepreneurship. The only people who will win in this scenario are the mostly wealthy people who own shares in lazily managed companies. Hurray.
In sector after sector—banking, broadband, and utilities come to mind—large incumbent firms have found new ways to protect themselves from competition, whether through coziness with regulators of sweetheart subsidy deals with politicians on the make to a pathetic lack of imagination among entrepreneurs who refuse to take on the toughest challenges. The sectors that Amazon takes on are the big exception. Instead of damning Amazon, we need to be asking why we don’t have more companies like it.
Completely agree. And I did so before I made a living as a writer. The first time I partnered with Amazon was as the assistant manager at an independent bookstore. Purchasing cheap, used, out-of-print books and new hardbacks at the same discount as I could get from a publisher (but in two days rather than two weeks) improved our bottom line. And Amazon put Waldenbooks out of business in our town and made B&N reconsider opening a location there. Amazon may be partly responsible for the surge independent bookstores are seeing, both in number and in revenue.
Slate’s not the only media outlet defending Amazon.
Fascinating. Maybe we really are all starting to come together on this.