Amazon now also a superstar

A month after Apple passed $1-trillion, Amazon has also reached the magical 13-digit valuation figure

Just a month after Apple became the first company to pass the magical $1-trillion threshold, Amazon has done the same. It’s not called the “everything store” for nothing. From its origins as an online bookseller, it has morphed into an e-commerce giant and the largest provider of cloud computing.

Its annual revenue is a staggering $178bn and it accounts for US49C of every dollar spent on e-commerce in the US, according to emarketer. And it’s only going to get bigger.

When Jeff Bezos started it in 1994, he reportedly chose the name Amazon so that it would appear at the top of the alphabetical lists that were popular at the time. Dubbed “Earth’s biggest bookstore”, Amazon disrupted not only the book-selling business — putting innumerable bookstores and chains like Barnes & Noble under pressure — but became the everything store, selling products from toilet paper to televisions.

Its loyalty programme, called Prime, initially offered free two-day delivery but began to add other services. First access to music, then — like Netflix — back catalogues of TV shows. And it is now a force in movie and TV production.

But by far its biggest business is Amazon Web Services (AWS), its cloud-computing division.

You may never have heard of it, but you’ve heard of Netflix, Airbnb, Dropbox and Adobe. They all host their services on AWS.

Along the way, Amazon started selling its Echo speakers — which are now the dominant smart speakers — and launched Alexa, the most widely used voice-assistant service. You can get Alexa to perform a range of things (from reading the news and playing music to searching for something), but it’s mostly designed to make shopping on Amazon easier, especially if you’re a Prime member.

In an unusual move, because the figures have always been kept secret, Bezos revealed in April that Prime had 100-million subscribers, all locked into an annual fee.

Bezos is famous for ploughing profits back into the business, and this is reflected in its share price. Over the past five years its valuation has grown nearly 600%, and more than 70% this year alone.

Last year Amazon bought Whole Foods for $13.7bn, and expanded into groceries — setting the cat among the pigeons in the online grocery market in the US. Earlier this year in Seattle it opened Amazon Go, a food store without cashiers that bills you automatically, using similar cameras and sensors to those in autonomous vehicles. Like so much else Amazon does, it’s being seen as the future for retail.

Bezos bought the Washington Post for $250m in 2013, and the oncestruggling newspaper is now thriving.

But the dark underbelly of this success are the menial wages earned by its warehouse workers and allegations of mistreatment.

Amazon’s $1-trillion valuation is confirmation of how central it has become to the internet itself.

The dark underbelly of this success is the menial wages earned by its warehouse workers