In a Trump vs Amazon heavyweight match, others will be the losers

Image credit: Stefan Holm / Shutterstock.com

As recently as late last year it was considered risky to even think that digital behemoths could be under any real threat. Amazon, the largest of them all (bigger than Walmart, Target, Best Buy, Nordstrom, Kohl’s, JC Penney, Sears and Macy’s put together) is getting into everything we do. It is no longer a store selling one product at a time, it is becoming – has already become – an ecosystem that we use almost without conscious thought.

Not many months ago, Amazon was being tipped as the first company on Earth to reach a valuation of a trillion dollars.

Yet businesses like Amazon have investors with crazy ideas. They are impressed by companies simply doing something Big. Profit does not seem to come into the equation. When Amazon bought Whole Foods, investors basically paid for it by bumping the stock price upwards more than the value of the deal.

So what could possibly go wrong?

For a long time everyone (including us) said that the fines and taxes that the big digital players were suddenly facing was pocket-money, that it wouldn’t hurt them in the short term.

But it is getting hotter in the kitchen – much hotter.

The reality is that no company will be allowed to become bigger than the country where it lives. More and more people now think that splitting Amazon up is the only logical way of stopping it becoming too large.

If Trump goes after Amazon (and the fact that it sacked some of the more powerful of its 15 major lobbyists last week points to him planning exactly that) then it really could trigger something quite seismic.

What we will see over the coming months is a huge battle between big business and big Government as Trump tries to make Amazon smaller, to ‘protect Ma and Pa America’.

It could be the beginning of a major car crash.

The problems it will cause will not come to rest with Amazon itself. After all, it does something real. It sells and delivers lots of stuff.

Combine that forthcoming battle with recent privacy revelations and we could have a wake-up call that digital businesses are not real businesses and social media based ones even less so. Investors are already restless and might begin to rethink digital businesses in a dot com ‘boom and bust’ kind of way.

If there is a huge shake up, Amazon will obviously survive, so will others that do real things.

In the end, it will be the Facebooks of this world who will suffer more than any other business in the Amazon vs Trump heavyweight knock out match.

Amazon is, at heart, a shop and sells actual stuff. And Facebook, er, isn’t. Its users are its product. Amazon’s users are its customers.

All of which makes us wonder, as we drown in ever more apps and ever more social media, what will the Next Big Thing be?

It may be time to come up with something real for investors to throw money at.

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1 Comment

  1. Trump doesn’t care how big Amazon is. He only cares that Jeff Bezos owns the Washington Post, one of his fiercest and most dogged critics. Applying Occam’s Razor, if a Trump tirade can be explained as a narcissistic response to a perceived threat to Trump’s fragile ego, no further explanation is needed.

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