Amazon simply doesn’t seem to have a coast mode.
Today the mega-etailer is announcing plans to open a massive new 800,000 square foot warehouse in Tracy, California just outside Silicon Valley. It’s long avoided opening a warehouse in California, to avoid being subject to sales taxes. But it lost that battle last year, regardless. (And seemingly, not many customers with it.)
This new expansion furthers Amazon’s long-game of getting as physically close to customers as it can, making shipping all the more faster and cheaper– and widening the competitive moat between what it can do for customers and what everyone else in the etail world can.
Jeff Bezos seemingly does not know a speed other than crazy, aggressive land-grab. It’s just another gaudy throw down by a company that’s taking on anyone fool enough to try, armed with a new $3 billion bond offering– its first since the late 1990s– and a worsening balance sheet that seems to worry only guys like this.
Forget doubling down, Amazon has to be at least quadrupling down by now– and in all kinds of industries. It’s a multi-front war that would make Napoleon blush.
- There’s the continued discounts on its core merchandize– even as low as zero.
- Amazon will take on anyone who wants to challenge their low prices, continuing to cause ripples in the brick-and-mortar world. Some can afford it; others can not.
- Meanwhile, as Amazon continues to aggressively play the spoiler in its core market, it’s grabbing territory and losing money in new ones as well. Netflix CEO Reed Hastings has estimated that Amazon has to be losing $1 billion a year on its Prime Streaming Service.
- And on yet another front, Amazon is one of the only real gadget competitors Apple has. It’s launching devices at every price point, driving other ereaders out of the market, as it delights even Apple fan boys with its 2011 product announcements. Like Apple, it gets that software is the edge here. The above mentioned aggressive gambits with digital media pricing, play into this strategy.
- A recent report says Amazon Web Services would be a $19 billion business if it were valued independently. Like a lot of Amazon’s businesses, the margins are thin, but Bezos is only pushing for greater marketshare. AWS is aggressively pushing into enterprise services with the same land-grab mentality with which it’s approached everything else.
- Even its own financial strategy is aggressive: Thin margins, heavy spending, continually making expensive moves to bolster its market heft and then using that heft against others.
Of the four dominant companies in tech now– Amazon, Apple, Google, and Facebook– Amazon is the one that’s most aggressively trying to grab more territory or defend existing territory as if it’s under immediate threat. Google, perhaps is a close second, with its ambitious Google Fiber and increasingly impressive mobile investments. But no one acts more paranoid than Amazon right now. And you know what tech legend Andy Grove said about that.
Clearly not content just to be in the big four, if Bezos has his way, his company won’t rank a distant third to Apple and Google forever.