Page 29 - March 2018 Disruption Report

TECHLASH JAMNAURACRHY 22001188
But tell me this. If at some point, there’s going to be monopoly prices, if at some point we wake up and there’s really not very many retailers around, no cloud providers, except for one, they will have monopoly-like power and be able to extract monopoly rents. People say that’s not really true that’s conjecture. ...Well let’s look at the ultimate arbiter of what is probably going to happen. I would argue that’s the markets.
What is the market telling us? The market puts a multiple on EBIT [e.g., earnings before interest and taxes] to Macy’s of 5.3X, Target 6.1X [and] Walmart 11X ...The market has decided that Amazon gets a multiple of 47X. So isn’t the market telling us that at some point soon Amazon is going to have so much power [that] it’s going to be able to charge monopoly like rents?
Now the narrative Amazon puts forward its—wait, hold on, we’re only 4% of retail. How can you break us up or regulate us if we’re 4% of retail?
Yeah, sort of. They’re also 24% of all retail growth in the largest economy in the world. They’re also a third of all cloud revenue—the fastest growing, most pro table business and technology. They’re also 44% of all U.S. e-commerce sales. They’re 55% of all Black Friday sales. They’re 62% percent of U.S. households in the form of [Amazon] Prime, where more people have a cable pipe of stuff into their house called Prime than voted in the US election or have a landline phone. In three to ve years, if trends continue, more people are going to have a cable pipe of stuff called Prime coming into their household than cable television.
And that they have a 70% share of the most important technology of the next ten years— Voice [e.g., Alexa]. Four percent? I don’t think so.
They’re not the only ones. Google has a 90+% share of a market search that, now by dollar volume, is a bigger market than any advertising market of any nation with the exception of the U.S.
If hotels, railroads, airlines advertising—in any of these industries—...had a 90+% share in the U.S., wouldn’t we be talking constantly about breaking them up?
Digital marketing—that’s the future, that’s where the growth is, that’s what’s going to create all our jobs for all our young people. But guess what? Two companies own 103% of the [digital marketing] growth. If you’re in digital marketing and you’re not Facebook or Google—if you joined newspapers [or] ...magazines, ...your business is in structural decline.
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