Should you be scared of Amazon? (AMZN)
About a month ago, New York Times columnist Farhad Manjoo helped coin a new term for the top-five tech companies that are increasingly dominating our lives: The Frightful Five, better known as Apple, Google, Microsoft, Amazon, and Facebook.
The top of his list? Amazon.
Farhad's argument was that he's increasingly dependent on Amazon for buying stuff and entertaining his family. That's true.
But I'd argue Amazon's reach goes deeper than that, deeper than any other company inside or outside the tech world. And its grip on our lives is only getting stronger, which raises some serious questions we haven't had to ask ourselves about the power and influence a tech company can have over our lives.
Out of the Frightful Five, Amazon is the company you should fear the most.
Amazon's surprise $13.7 billion acquisition of Amazon is the latest example. We already knew Amazon had ambitions to break into the grocery business through the Amazon Fresh delivery service and the futuristic cashier-free convenience stores, but this is a whole other level — a subtle troll that the online retail giant can creep its way back into the physical world and take over a popular chain of supermarkets.
But let's talk about everything else Amazon has its grip on and how it continues to hold greater influence over:
- Cloud computing. Amazon Web Services powers many of the apps and websites you use every day. (Remember when an Amazon outage took down a large chunk of the internet?)
- Artificial intelligence. Amazon has quickly become a leader in AI thanks to its Alexa assistant, which has opened up a new world of voice-powered computing.
- Logistics. Through Amazon Air, Amazon plans to use drones and its own planes to deliver goods. It's also experimenting with autonmous trucking. Many have speculated that one day Amazon won't need to rely on UPS, FedEX, or the Postal Service to deliver stuff.
- Entertainment. Amazon has dumped millions into original TV programming and movies. It also runs a streaming music service, and lets you buy digital music and video.
- Food. Between Whole Foods, those futuristic grocery stores, and the Fresh delivery service, Amazon is poised to be one of the largest grocers in the country.
- Health. According to a CNBC report, Amazon is thinking about getting it the prescription drug business.
- Retail and e-commerce. This one is self-explanatory.
There's more. Amazon's influence extends to other industries indirectly through CEO Jeff Bezos' personal investments:
- News media. Bezos owns The Washington Post and a small percentage of Business Insider.
- Outer space. Bezos owns a rocket company, Blue Origin, that's building reusable rockets.
AMAZON, 1998: hello we sell books but online— KRANG T. NELSON (@KrangTNelson) June 16, 2017
AMAZON, 2023: please return to your Primehouse for your nightly Primemeal, valued Primecitizen
That's a lot of stuff that affects you every day from a company that started selling books online back in the 90s. Now it's hard to find a need Amazon can't fill.
That raises some serious, potentially scary questions if Amazon's influence and capabilities continue to grow. Should one conglomerate have that level of control over the future of so many vital industries people rely on? What kind of check will there be on that power, if any?
Granted, it's a little early to be thinking about all this. Most of the verticals Amazon is involved in are still dominated by traditional companies. But as we saw in the market's reaction to the Whole Foods deal on Friday, it's clear that there's a strong possibility we're accelerating toward a future where there's a digital layer on top of everything we do. And the company best equipped to deliver all is Amazon. There's literally no one else in a position to compete.
That's a lot of power concentrated in one conglomerate, and puts Amazon in a position where it's a company to fear.