E-Commerce Becomes Amazon’s Past

By Douglas A. McIntyre Published Jan 31, 6:15AM EST

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E-Commerce Becomes Amazon’s Past — © David Ryder / Getty Images

Jeff Bezos once said Amazon.com Inc.’s (NASDAQ: AMZN) cloud business would eventually eclipse its original e-commerce operations. In 2018, operating income from Amazon Web Services (AWS) was about the same as Amazon’s massive North American online operations. For 2019, AWS net income blew beyond it.

In 2018, AWS had revenue of $25.7 billion and operating income of $7.3 billion. Amazon’s North American business had revenue of $141.3 billion and operating income of $7.3 billion. In 2019, AWS revenue reached $35.0 billion and operating income was $9.2 billion. North American operations had revenue of $170.8 billion and $7.0 billion in operating income.

The threat to AWS has become the cloud businesses of other tech giants. This is particularly true of Microsoft Corp. (NASDAQ: MSFT), which recently announced strong earnings of its own. Google, Oracle and Salesforce are also in the club that continues to chase AWS. Yet, AWS stubbornly still keeps the lead.

The e-commerce business continues to be founder Bezos’s petri dish. His recent effort at same-day delivery hurt Amazon’s bottom line, although that improved in the most recent quarter. His Alexa-powered home assistance devices are popular, but do they make money? Apple is also in this business, as is Google. Amazon’s streaming media business has brutal competition with Netflix. That competition has included Hulu for years. More recently, Apple and Disney, among others, have started to stake claims.

Amazon’s e-commerce operations also face real competition for the first time in over a decade. Walmart Inc. (NYSE: WMT) has started to pick the lock of the section, based on its recent success. Its plans will be architectural drawings for others. Free shipping is still a cutthroat business. It still relies on Amazon enemies FedEx and UPS, each of which Amazon would like to bury in the shipping sector.

[nativounit]

AWS may not have the market share that it once had, but the cloud market is exploding. Amazon probably won’t be caught for first place. It is too far ahead.

Bezos was right all those years ago.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.