<story><title>Facebook is the new AOL</title><url>http://www.theverge.com/2015/1/4/7488495/facebook-is-the-new-aol</url></story><parent_chain><item><author>Chronic30</author><text>Last time I checked Amazon&amp;#x27;s hardware line... didn&amp;#x27;t go too well. Amazon is a retail company, not a software company. Remember that.&lt;p&gt;AWS (the closest thing to software Amazon owns) will converge to 0 profitably as competitors copy the easily replicable service.</text></item><item><author>allendoerfer</author><text>I think Facebook is well aware, that it could be over tomorrow, that is why they will survive. AOL tried to grow, I think Facebook acts more reasonable. They know the others can not get them in the social network space, no matter how hard they try, if they just secure their market share with acquisitions and slowly increase profitability. They do not try to win in another domain as the new Microsoft, Google does.&lt;p&gt;In the end Amazon will win. Most of the others make their money by advertising or by selling technology to companies, which make their money with ecommerce or advertising. Amazon owns every part of this stack, which actually makes money. The bigger the Amazon brand grows, the less money will be left for the others. At the moment, this is not visible, because the whole market grows. Amazon knows this and just reinvests and waits.</text></item></parent_chain><comment><author>crucifiction</author><text>AWS and competitors are very capital intensive businesses. While the software might be easy-ish to replicate with a medium sized software team, the capital required to set up and then run dozens to hundreds of packed data centers is prohibitive for most competitors. The cloud market will turn into the chip market, where the capital cost of fabrication facilities is an enormous barrier of entry to the market. That is why the only real potential competitors in the space are from companies with lots of cash to burn and who can leverage the same &amp;quot;we need data centers anyways&amp;quot; model that Amazon does.</text></comment>
<story><title>Facebook is the new AOL</title><url>http://www.theverge.com/2015/1/4/7488495/facebook-is-the-new-aol</url></story><parent_chain><item><author>Chronic30</author><text>Last time I checked Amazon&amp;#x27;s hardware line... didn&amp;#x27;t go too well. Amazon is a retail company, not a software company. Remember that.&lt;p&gt;AWS (the closest thing to software Amazon owns) will converge to 0 profitably as competitors copy the easily replicable service.</text></item><item><author>allendoerfer</author><text>I think Facebook is well aware, that it could be over tomorrow, that is why they will survive. AOL tried to grow, I think Facebook acts more reasonable. They know the others can not get them in the social network space, no matter how hard they try, if they just secure their market share with acquisitions and slowly increase profitability. They do not try to win in another domain as the new Microsoft, Google does.&lt;p&gt;In the end Amazon will win. Most of the others make their money by advertising or by selling technology to companies, which make their money with ecommerce or advertising. Amazon owns every part of this stack, which actually makes money. The bigger the Amazon brand grows, the less money will be left for the others. At the moment, this is not visible, because the whole market grows. Amazon knows this and just reinvests and waits.</text></item></parent_chain><comment><author>allendoerfer</author><text>That is actually an argument for my thesis. When AWS converges to 0 profitability, so do all they other cloud services.&lt;p&gt;What keeps on making money is the Amazon marketplace and their physical distribution infrastructure.&lt;p&gt;And if they make more money, the advertising parts of the competitors will make less.</text></comment>