Amazon: $1 Trillion Valuation
Staying focused and diversifying

Archimede Mulas London - 5/09/2018

It is not news that can escape one’s ears, as Amazon, “The most consumer-centric company, where you can find anything you want to buy online,” becomes the second company in the world to reach a 1 Trillion dollar valuation. 

With just 165 trading days to go from a $600Billion valuation to this historic mark, it also shows an incredibly rapid growth for a company with 575’000 employees. 

Daniel Martins, founder of DMMartins Research, was one of the many sceptics of Amazon’s high valuation in 2017, but had to re-consider after having reviewed their aggressive market expansions and latest financials, CNN-Tech.

​​"It's too high of a bar to assume that they'll succeed at everything that they do," Martins says. But at the same time,

“Amazon is the best combination in the world of the scale of a large company
​and that entrepreneurial DNA with the spirit of a startup."

The question everyone is asking themselves is how did they do it?
Simply, one might argue, Amazon has a strong core business and has managed to diversify its business in all sorts of sectors.

Since its inception, 24 years ago, Amazon became much more than an online bookstore. It has grown its business to compete in industries with large market players. Such as Google, Apple, Microsoft, Oracle, Netflix, national and international supermarket chains. These are industries that have un-comparable competition. There are companies that have more financial resources than Amazon and also the advantage of being first to market.

Amazon’s growth however can be followed with its new service announcements:

Since 1998 Amazon has acquired start-ups and companies, to support its market diversification strategies *.  While also concentrating on its primary product. The acquisitions include many online retail stores, ranging from pets.com (1999), Egghead Software (2002), Zappos (2009), Diapers.com (2010), Souq.com (2017).

Amazon’s entrepreneurial spirit and fearlessness to innovate, have brought to consumers, nothing less than Amazon studios, Amazon music, Alex and Echo, Amazon Web Services, Amazon Go, and with the acquisition of PillPack in 2018 (Business Insider) potentially an online pharmacy.

Amazon is in the business of how we'll live in the future

​While many of Amazon’s well known services today complement its revenue growth, it is important to note some did not go as planned. Such as Amazon Destinations, and Amazon Fire Phone.
 
The consequences of these failures, in a larger pool of successes, have not hindered Amazon’s innovative and entrepreneurial spirit. In fact, Daniel Martins thinks Amazon could double in value by 2020.

​* Mergers and Acquisitions by Amazon 

• 1998:  IMDb – Internet Movie Database
• 2008:  Reflexive Entertainment – Video game developer
• 2009:  Stanza – Rival of Amazon’s Kindle
• 2013:  TenMarks Education – Online math practice
• 2014:  Twitch – Live streaming video platform
• 2016:  Cloud9 IDE – Online development service
• 2017:  Whole Foods Market – Supermarket chain
• 2018:  PillPack – Online pharmacy that delivers to your door