Amazon may become most valuable company on the planet

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Amazon started out to selling books online. Now, it’s difficult to describe the company merely as the world’s largest online retailer. 

Amazon has significant interests in fields related to online retailing. These include logistics, where it has invested tens of millions of dollars in recent years.

From the US to South Korea, the company has poured money into warehouses, trucks and related assets to build up its logistics operations.

Moreover, Amazon is now believed to be one of the largest users of robots in the logistics sector. It even has a dedicated division called Amazon Robotics.

Within that division is probably the company’s drone development. Drones are set to make delivering Amazon products to remote locations in the US literally a breeze.

Certainly the company’s artificially intelligence home automation devices – namely, Amazon Alexa Echo – are technically part of that division.

The company also has a huge cloud operation, which grew out of the development of its own online retail operation.

Now branded under Amazon Web Services, the former bookseller is considered to be the leading cloud services provider in the world.

And that’s all before we get into the company’s acquisition of organic retail chain Whole Foods Market recently. Or CEO Jeff Bezos’ dream of starting a similarly profitable space business, through his Blue Origin aerospace company.

There’s probably a whole host of other ideas bubbling under the surface of Amazon, and what distinguishes them perhaps from, say, Google’s “moonshots” – or apparently outlandish ideas – is Bezos’ ability to connect them to a commercial need that maybe other people can’t see or think is too far-fetched.

That’s probably the secret of Bezos’ and Amazon’s success. It’s not a big secret – it’s actually quite simple, and is shared by most large companies. It’s a strong belief in an idea which they know will work – it’s just a matter of time.

In that situation, it’s not really a question of belief – there’s no abstract or irrational faith involved. The more critical factor to success becomes having the resources to keep going until the world catches up with you.

When Amazon started off selling books online, most people may have agreed that online retail was going to be big. But most people may have filed such a thought in the back of their minds because – for the moment they were in – it was not yet a big thing, because of online security surrounding card payments and so on.

Most people did think it was inevitable, however, that online commerce would be huge. Which makes you wonder how traditional retail such as Wal-Mart got rather left behind.

And it’s not just Wal-Mart, it’s virtually everyone. Brick-and-mortar stores small and large across the US and Europe are in a fix – all because of Amazon, apparently.

But no one stopped them from investing in the online side of their business. Why didn’t they?

Most consumers would prefer to have a choice when shopping – online or offline. But when Amazon makes it so easy to shop online, why would you go anywhere else?

Having started a little late, the other retailers have not yet found an answer. And if they continue like this, analysts’ predictions that Amazon will become the world’s largest company will come true within the next few years.

Amazon’s share price recently went beyond $1,000 a share, prompting Macquarie analyst Benjamin Schachter to say, as reported on CNBC: “Amazon will be the most valuable company on the planet one day.

“We see few competitive threats to its core retail / marketplace business, and while AWS is seeing increased competition from Microsoft and Google (among others), we think its lead there is well established.”