Paul Sakuma / AP
The Economist's cover story this week focuses on Amazon's "empire" — an online bookseller that transformed itself into a cloud-computing cable channel with a slew of branded physical products and one of America's biggest Internet marketplaces on the side — and how it can justify its massive $400 billion valuation.
- "Amazon will have to grow faster than almost any big company in modern history to justify its valuation."
- "Amazon's business model will ... encourage regulators to think differently. Investors value Amazon's growth over profits; that makes predatory pricing more tempting."
- "[F]irms could increasingly depend on tools provided by their biggest rival. If Amazon does become a utility for commerce, the calls will grow for it to be regulated as one."
- The biggest threat: "[S]uccess will bring it into conflict with an even stronger beast: government."