A panel of top high-tech executives met this week in London at the Wall Street Journal Europe’s CEO Summit and critiqued some e-commerce powerhouses.
Amazon.com came under fire as Raymond Lane, president and chief operating officer of Oracle, took the time to criticize and give some advise to the online marketer.
“If you use Amazon…you have to look at the underlying business they are in, that is book selling, which is not a great business,” he told the Journal. “Just moving book selling onto the Internet doesn’t make a good, profitable business.”
He also had some advice for Amazon.com: “Take your stock and turn it into real assets before it’s over,” Lane suggested.
Lane then went on to say “the dot-com companies that are going to do traditional business on the Net are where most of the losers will be.”
This type of blasting from the media and some analysts is not uncommon for Amazon.com — especially since it hasn’t turned a profit since it opened its virtual doors. But it’s premature to be writing the company’s obituary, and there are plenty of recent reasons why it appears that Amazon.com is diversifying and becoming more than just another online book or CD seller.
For instance, Amazon.com’s recent foray into medicine by acquiring 40 percent of drugstore.com, the online pharmacy that is planning an initial public offering soon, is a move in the right direction. It makes sense considering estimates by U.S. Piper Jaffray predict that the online medicine market could mushroom to $11 billion (US$) by 2005.
In addition, Amazon has also diversified into pet supplies and last week it said it would pump $45 million into international auction house Sotheby’s Holdings Inc. This makes those who criticize Amazon.com for just being an online book store appear foolish — or just plain jealous of its $1.5 billion in sales.
More evidence that Amazon.com is going to be a long-term player is the fact that the company has just hired two recruiting firms to search for its first chief operating officer and new financial officer, according to Bloomberg. This will strengthen and expand its management team.
But there’s more…
The most recent weekly Internet ratings from Nielsen Media Research and Net Ratings, Inc. show that about 64 million Amazon banners were completely loaded on users’ computers during last week, ranking it in third place trailing only Microsoft and TRUSTe. This shows that Amazon.com is light years ahead of most of its e-commerce competitors in understanding how to promote itself. This is one foothold that will not easily be taken away.