The Amazon Showroom

           Many have dubbed the retail market place “the Amazon Showroom” because consumers will go to the retail store and check out the price and go look on Amazon to see how much is cost.  A fair estimate would be 8 times out of 10 that Amazon would probably be cheaper than the retail establishment.  Will Amazon ever become the Wal-Mart of the web?

With low overhead costs and a virtual fun marketplace to shop in the comfort on your home, why is Amazon not your choice?  Picture this:  It’s a rainy/snowy Saturday morning in New Jersey during the dark winter months and all you want to do is stay in bed and not move all day.  Well, how about you can stay in bed and not move all day, and spend thousands on Amazon?  They also offer free two day shipping when you are an Amazon Prime member ($79 a year, you also get free streaming content included). 

The company has grown from a small website based tech company to one of the only surviving .com’s.  There are three .com’s from the tech boom that survived [Ebay.com, Yahoo.com and Amazon.com].  Google would count, however they IPOed in 2004.  Is the sky the limit for Amazon (was worth over $100 Billion by market cap in the last couple months)?  Will more and more consumers choose Amazon over their local mom and pop stores?

                Only time will tell.  The web consumer space has grown so much that there is actually a holiday called Cyber Monday!  After black Friday at the local retail stores, you can wait until Monday to sit back and relax and see all the deals sitting around in your comfy sweatpants. 

                If Amazon does become the Wal-Mart of the web, and Wal-Mart stays Wal-Mart of the real world, will that be it?  Will every consumer go to a Wal-Mart in person and Amazon on the web?  Will Amazon and Wal-Mart combine to be the ultimate tandem of consumerism?  What an unstoppable force that would be!

Apple's Anchor

            The iphone, ipad, ipod, and computers are all great pieces of hardware.  You can even make the argument that the iphone is the most prolific piece of hardware ever, besides the original computer.  But, what Amazon, Microsoft, and every other large tech company lacks is the anchor to their data based pieces of hardware.  Amazon is the closest with their android store and also their content store.  It does not interface as nicely as the itunes store does, however. 

            The anchor that Apple has is the itunes store.  It has reinvented the way content has been downloaded and delivered.  It used to just be music.  Now it is music, movies, TV shows, podcasts, and music videos.  This anchor is what makes Apple very hard to touch.  It is the link between their hardware and content (software). 

            Imagine if Apple did not have the itunes store.  They would just be another large tech company that has a highly acclaimed product (iphone).  With the iphone plus the itunes store, the integration is seamless and now everything you have ever bought in the store is in the cloud.

            The cloud wirelessly stores your content that you have bought in the itunes store.  You can download anything on demand to any device and delete it just the same.  There is a tab on the Apple TV called “purchased”.  This is any movie or TV show you have bought in itunes, ever!  Now it does pay to buy your media thru Apple because you’ll have it forever. 

            This “anchor” so to speak, is really the reason why Apple has such an advantage over its competitors.  We live in a content driven world and Apple not only controls the content, they invented the new way of receiving it and making it fun to get!  The itunes store may put all hardware to rest, such as DVDs and CDs.  One day every television that is made will have wifi with the itunes store integrated into it and Netflix also.  So then, what will be the point of buying actual DVDs when Apple has contracts with all the major film distributors to stream their movies right to your TV for $4.99?  Are we seeing the demise of hardware content because of the way Apple can deliver it?

For What it's Worth, What are YOU Worth?

By dividing the market capitalization (how big the company is on paper) into how many employees the given company has, we can find out how much each employee of a given company is worth.  It is interesting to see how much each single person at the firm is worth in comparison to other industries.  Let’s take a look at the biggest oil company in the world (ExxonMobil), the largest company in the world by gross sales (Wal-Mart), one of the fastest growing technology companies and large cap (Amazon.com), and the largest drug company in the world (Pfizer). 

            Wal-Mart has 2.1 Million employees and a market cap of $206 Billion.  Every employee on average is worth $98,095.  What can we make of this?  Does this mean every single employee at Wal-Mart should get paid that amount?  The average household salary in America is somewhere around $45,000 a year.  Compare $98,095 per employee at Wal-Mart to $2.4 Million per employee at Amazon.com.  We can gather that Amazon.com definitely has less overhead than Wal-Mart, but every employee at Amazon.com is worth roughly five times that of Wal-Mart.

            The largest drug company on the planet, Pfizer, has 106,500 employees and a market cap of $168 Billion.  That comes out to roughly $1.57 Million per worker.  Is this correct?  Does it make sense that an employee at Pfizer is worth much more than a worker a Wal-Mart and a little less than an employee at Amazon.com? 

            Is this even significant?  Does how much each employee is worth at a given company mean anything?  Should they be getting paid more?  Less? 

            Finally, let’s look at ExxonMobil.  Every employee at Exxon is worth roughly $5 Million (market cap is $412 Billion)!  That’s twice the amount of someone who works at Amazon.com, about three times the amount of someone who works at Pfizer, and about six and a half times the amount of someone who works at Wal-Mart.  They are the largest company in the world, with the most important resource on the face of the Earth.  However, does it equate to each person that works there being worth about ten times the amount of the average household salary in the United States?