Just as any successful entrepreneur will tell you, business doesn’t work too well when you put all of your eggs in one basket. For individuals, it’s easy to pivot and try out new ventures as they please—for established companies with thousands of employees and millions of customers, it’s a little more difficult.
That is of course unless you’re Amazon. When it comes to companies, nobody else expresses the entrepreneurial spirit quite like Amazon.
What Takes Place Behind the Scenes
Amazon is a lot like an iceberg. Though Amazon.com is likely what you interact with on a daily basis, it really only represents the tip—just 10% of the iceberg’s total volume; it’s Amazon’s subsidiaries and various internal ventures that make up the company’s other 90%.
While it may sound counterintuitive, in today’s fast-paced landscape, Amazon’s business model is proving to be quite successful. In the long run, Amazon is extremely skilled in adapting their core product to fit various niches as they begin to surge in popularity—adding more companies to Amazon’s repertoire only makes the process faster. The upfront cost of these acquisitions may be high, but Amazon is more worried about gearing up for the long run (and they have the capital to do it).
It’s pretty clear Jeff Bezos has never been in this for the money—he’s in it to be the best. Despite the high cost some of Amazon’s acquisitions have come at, most have done leaps and bounds to position Amazon for success in burgeoning industries. In addition, most of Amazon’s subsidiaries get a massive exposure boost upon getting picked up by the e-commerce giant.
Whole Foods is Almost as Pricey as the Products It Sells
Rumors of another surprising acquisition are circulating just days after Amazon decided to hop in the market for grocery stores. On Friday, Amazon.com Inc. announced big plans to purchase Whole Foods Market for a whopping $13.7 billion. After years of company acquisitions coming from all sectors of the market, it’s getting hard to define what Amazon’s game plan is exactly.
While many of the companies may not have too much in common, one thing is certain: Amazon brings innovation to the industries where it’s due. Through a combination of Jeff Bezos’ desire to build the future and the company’s domination of other cloud-based services, Amazon seemingly has the power to disrupt anything.
While grocery stores may not initially make you think of flying drones and AI clerks, anything could be possible in an Amazon market. For Amazon, the Whole Foods acquisition serves as a stepping stone to bring the ease of online shopping to the real world. Amazon hasn’t announced any official plans yet, but it’s certain Whole Foods is going to get a healthy dose of logistical innovation from the e-commerce giant.
Enough excitement for one week? Not quite—there’s also a hefty amount of rumors circulating the web that Amazon has plans to purchase the now ubiquitous team communication platform, Slack. While most of the information is still in its infancy, the idea doesn’t sound too out of the realm of possibility.
One Slack; That’ll Be $9 Billion
At a price tag of $9 billion, everyone’s favorite comedic chatbot doesn’t come cheap. That being said, Slack would serve as Amazon’s first official entrance into the office space. As more and more companies begin to realize the importance of establishing impeccable internal communication, Slack has become somewhat of a household name. From startups with teams of three to big names like Airbnb and eBay, Slack makes it easy for businesses of all sizes to build up their team communication and drastically increase productivity.
On the other hand, Amazon makes running the backend of a business significantly easier without the majority of employees even knowing it’s there. In other words, Slack is exactly what Amazon needs to significantly increase visibility in the corporate landscape.
While Amazon Web Services has an impressive list of clients, it’s likely only programmers and developers are taking advantage of the tools it really has a to offer—not every single team member at a given company needs extensive access to servers and compute power. In contrast, all team members do need to communicate at some point or another, and Slack has proven itself as the superior tool for teams to do so.
It’s hard to say anything bad about Slack, and an acquisition would almost guarantee Amazon’s successful entry into the team communication market—something it will definitely need if expecting to stay relevant in the extremely lucrative sector of B2B services. Without acquiring a decent head start like Slack, Amazon would have a hard time getting a product out in time to compete with the offerings being developed by other companies.
An Amazon Chatbot? Not Quite Yet…
Despite all of the obvious upsides to a Slack acquisition, the hefty price tag of $9 billion makes it pretty difficult for Amazon to justify a purchase at this time. On top of that, based on what the founders at Slack have said in previous interviews it’s unlikely the company would even consider selling. There aren’t too many things Amazon has to offer that would make the deal any better. Particularly with Slack’s introduction of Enterprise Grid, there’s just not much Amazon can do for Slack in the long run.
While this deal may not end up going through, it’s a perfect example of what Amazon is so great at. Since its first acquisition back in 1998, Amazon has specialized in positioning itself for success by identifying upcoming industries and making the acquisitions needed to completely dominate them. Over the years, Amazon has rapidly scaled its e-commerce service to include everything from hit TV shows to HD tablets. On top of that, Amazon.com Inc. dominates the cloud infrastructure industry with Amazon Web Services and continues to push the limits of new industries by making bold acquisitions.