We are going to need some new terminology for dominance in a business sector. Amazon, already the undisputed king of E-commerce, now commands 43 cents of every dollar spent online.
The online retailer on Thursday surprised investors by more than doubling its quarterly profit to $1.6 billion—just under its record of $1.9 billion from the holiday quarter—as revenue surged about 43%.
The revenue growth was Amazon’s best mark since the third quarter of 2011, pushing the total to about $51 billion. The company credited the better-than-expected results to its highflying cloud-services division and strong growth in the company’s burgeoning advertising business.
Amazon’s swelling profitability doesn’t appear to be an anomaly—it expects operating income to more than double to as high as $1.9 billion in the second quarter—though Chief Financial Officer Brian Olsavsky cautioned he may not always have such good news.
“We certainly will always have periods of higher investment, and through the year we expect investments to increase, particularly video content spend…and we’ll continue to hire,” Mr. Olsavsky said.
With other tech giants under increasing regulatory scrutiny, most notably Facebook founder Mark Zuckerberg’s recent two-day testifying saga before Congress, many speculate what attention law makers might turn towards the retail behemoth.
Those moves highlight Amazon’s rapid ascent from its roots as an online bookseller to a modern-day conglomerate that offers a competitive line of tablets and voice-activated devices, runs a dominant cloud-services business and sells groceries from the neighborhood store. As it expands into new business areas globally and furthers its reach into consumers’ lives—from its Hollywood studios to its recent experimentation into health care and financial services—it is drawing questions about its growing clout.
Most visibly, President Donald Trump in recent weeks lashed out at Amazon’s business practices and economic impact, raising questions whether his comments will spur lawmakers to take a harsher look at Amazon’s dominance. Other tech giants, including Alphabet and Facebook, are facing regulatory scrutiny over their companies’ vast reach and access to personal data.
Still, policy experts say that targeting Amazon on anticompetition grounds would be difficult, requiring overturning principles that have guided regulation for decades.
In the meantime, Amazon shows no signs of slowing down.
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