
What IF Apple Buys Amazon? - slackgentoo
In its most recent (Q3 2011) financial report, Apple Inc (AAPL) put its reserves at $76.4bn. As of today (8/19/2011), Amazon.com Inc (AMZN) has market capitalization of $81.22bn. It is not at all impossible for Apple to buy Amazon. I can think of the following benefits.<p>First, iCloud can leverage AWS. Apple does not need to reinvent or relearn the data center management again. AWS itself is a fast-growning profitable business. With AAPL services running on it, the AWS brand will also get reinforced.<p>Second, Jeff Bezos can replace Steve Jobs as the CEO of AAPL. According to Gruber, Jeff Bezos is the best potential outside successors. I agree with him on this.<p>Third, combining AMZN’s online digital content retailer business, AAPL can dominate the market. The company will have more power in negotiating with content publishers.<p>What is your thoughts on the potential acquisition?
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calebhicks
Very interesting idea. However, Apple and Amazon have very distinct ways of
doing business that would stop any potential purchase talks dead in their
tracks.

1) Apple makes and sells everything itself at very high profit margins. They
also work with some retailers to extend reach. Meanwhile, Amazon makes nothing
(except the Kindle) and sells millions (billions?) of small items at a
miniscule profit margin. Completely different models here.

2) Apple is notorious for not trusting other parties to do their business.
Amazon depends entirely on it.

3) The parts of Amazon that overlap into Apple's interests -- digital content
and AWS -- are irrelevant. Apple already has a huge content distribution
channel, and does not need the help of Amazon's agreements with creators. AWS
could be intriguing, but if Apple thought AWS was worth using, they'd already
use it for iCloud, iTunes, etc.

While Apple and Amazon are two of my favorite companies in the world, I see
very little that would give way to a potential acquisition.

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steventruong
I think this is horrible.

1\. Apple has a history of not spending a ton of money on acquisitions. That
isn't to say they might not (I'm holding my breathe on buying Google or
Facebook although that is also unlikely).

2\. iCloud is not the same as AWS. Apple has not expressed any intentions of
going into the hosting business and it certainly doesn't support what they do
or what iCloud is designed for. The backend might be good structure but the
business models are sooooo different, I'm surprise this was even mentioned
(albeit I'll admit that AWS is a solid business).

3\. The argument of Apple gaining digital content as a plus is wrong. Apple
had numerous opportunities in the past to buy out Music companies and record
labels and probably entertainment and production studios as well (even Pixar
and Disney which Jobs is part of) but didn't. Apple doesn't need to "own" the
content for them to reign as king. Didn't happened then, less likely to happen
now.

4\. Bezos is great, but he's no Jobs. He understand even less about hardware
(only experience being Kindle) or desktop applications. Apple's core business
is primarily desktop applications and heavy on hardware. Bezos would be a bad
fit when you consider this.

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mooism2
Your third benefit is why it would get blocked on anti-trust grounds.

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slackgentoo
They may domninate the download-and-own market. However they still need to
compete with other distribution mode, e.g. Netflix and Hulu in video, Spotify
and Pandora in music.

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mooism2
But you can be sure the big music labels will furiously lobby the Americans
and Europeans not to see things that way.

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nuttendorfer
Will not happen.

