Amazon Evolution

Amazon Evolution

Amazon is the biggest online retailer even though investors expected Amazon to be better. Amazon’s profits have fallen over the years, and now their operating margins are less than Wal-mart’s. Amazon is also dealing with competition from other online web sites such as Google. Google has replaced Amazon by being the place where many people do their online shopping. When everyone goes to sites like Google instead of Amazon, then Amazon will continue to loss profits.
    Amazon has come up with away to fix the loss of profits problem. Amazon only uses about ten percent of their processing capacity at any given day. Because Amazon has all of this extra processing capacity they decided to build a series of computing storage. Amazon also came up with other services that help companies run their technical and logistical parts of their business. Amazon charges a fee for companies to use these services. Amazon’s Simple Storage Service (S3), Amazon charges fifteen cents per gigabyte per their disk drivers. With the Elastic Compute Cloud (EC2), Amazon rents out processing power starting at ten cents per hour. Amazon also has the Mechanical Turk that combines processing power with networks of real people that do work that machines can not do very well. Companies can post work onto the Mechanical Turk and pay people online, which Amazon in return receives ten percent of the commission.
    Now that Amazon offers these services thousands of companies are using Amazon again. Amazon is competing with Google, Microsoft, and others to build a global computing platform. It is hard to know if Amazon will be successful or not. The only thing that is clear Amazon is heading down the right path. By using all of their extra space for profit the investors should see a increase in their Amazon stocks.