Killer Competition Is Always Around The Corner

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Yesterday we learned that Amazon.com did not please Wall Street. Amazon's revenue growth was fine, but the cost of doing business for the Bezos-crew is costlier than expected. And perhaps The Street thinks this is a trend that will only get worse?

Why did Amazon's cost rise? Part of the reason is investment in new software for their Search service called A9. But much of the reason comes because of competitive factors. More and more new companies are coming into the ecommerce field to do battle with Amazon and they are offering the same goods, the same services, and the same discounts and in many cases an equally good interface.

The lesson is that the Internet makes it easier to compete than ever before in business history. For example take eBAY. eBAY disappointed Wall Street last month and paid with a lower stock price. But there is customer discontent with new eBAY charges. But also we know there are small and facile auction sites gaining share everyday. In fact our crack news team at JupiterWeb wrote about just such a company yesterday called wagglepop. Whether wagglepop.com makes it big or not I do not know, but the other lesson of this post is that predators are everywhere and they are focused on taking a piece out of the major ecommerce players. The major players are ripe for plucking.

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