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article imageAmazon Poised to be Internet's Version of Wal-Mart

By John Louie S. Ramos     Sep 20, 2009 in Internet
From books to CDs and DVDs, Amazon.com has come a long way. The Web's largest retailer now wants to cross even more boundaries, as it pushes its way beyond books toward the ultimate goal of becoming an Internet-based supermarket.
Amazon is now selling diapers, Lego and power drills, not to mention replacement car clutches and more arcane items like the Jackalope Buck taxidermy mount, the New York Times reports.
Indeed, Amazon is serious with its expansion strategy; Scot Wingo, chief executive of ChannelAdvisor, an eBay-backed company, envisions e-commerce growing 15 percent in the next decade. He also believes Amazon is out to grab a significant percentage of that market share.
“Amazon has gone from ‘that bookstore’ in people’s mind to a general online retailer, and that is a great place to be,” Wingo told the Times.
Since 2006, Amazon increased market share consistently year after year, even taking away customers from e-Bay.
Amazon has also continued to introduce various new products over the last year; in June for example, Amazon created hubs for outdoor sporting goods, cellphones and wireless plans. In addition, they bought Zappos.com, an online shoe and apparel retailer, for nearly $850 million.
So with such forward momentum, can Amazon become the Wal-Mart of the Internet?
In 2008, Amazon’s profit and margins were strong, as the company earned $645 million. But Wal-Mart is still king, with $13.4 billion the same calendar year.
In terms of growth, however, Amazon is moving at a faster clip; the company grew about 36 per cent in 2008 compared to Wal-Mart's growth of 5 per cent in the same period.
Wall street also has high hopes for Amazon, as they value Amazon at around 60 times its earnings while Wal-Mart's worth is pegged at about 15 times its earnings.
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