Within the space of 25 years, a company that began life selling niche second-hand books from a garage in Seattle has become the world’s most valuable business. Amazon was worth £634bn when the US stock market closed on Monday, surpassing Microsoft for the first time.
Jeff Bezos, the founder, started off with the sale of a book entitled Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought, by Douglas Hofstadter. Today, his company dominates the online retail delivery market and has expanded into TV, online film and music distribution and cloud computing. It has made Mr. Bezos the richest man on earth, owner of the Washington Post and a power in the land; and as is inevitable when someone reaches such heights the question arises: has he become too powerful?
In the past 25 years huge corporations –Apple, Google and Facebook – have sprung almost out of nothing. But Amazon’s reach seems greater than any. There are echoes from history here. In the late 19th century, Standard Oil, founded by John D Rockefeller, rapidly became the world’s first and largest multinational corporation. In 1911, however, the US Supreme Court, in a landmark case, ruled it was an illegal monopoly that was using aggressive pricing to put competitors out of business. The court forced its break-up into 34 smaller companies.
There is no reason yet to believe Amazon is the Standard Oil of today. In retail, for instance, it is smaller than Walmart and in the media world it is still dwarfed by other players. But it is growing fast and you can be sure that regulators are keeping an eye on just how fast.