Why Amazon May Not Be a Monopoly
There's a lot of noise suggesting the status quo on Amazon is that it's a monopoly.
But there's a quite compelling counterargument: "If you're going to break up the company, I struggle to see on what basis," said Zev Fima, portfolio analyst for Jim Cramer's Action Alerts Plus.
"When I look at all the different business segments that you can argue that maybe they're a monopoly in -- the cloud, e-commerce, digital advertising, I don't see how you can say they're a monopoly, especially when these spaces are becoming more competitive." In the cloud, Amazon competes with Microsoft and optionality for businesses buying cloud services is arguably plentiful.
In e-commerce, Amazon's business model is to sell at relatively lower prices.
There has been an argument against predatory pricing, where competitors are forced to bring prices down to compete, and then lose profitability, allowing Amazon to bring pricing back up.
For now, Walmart has become competitive in e-commerce.
Costco has become competitive with Walmart in online grocery sales.
Wall Street Outlines Keys to Recovery After Kroger's $2 Billion Crash.
Amazon Won't Crush Kroger By Competing With Itself.
Speaking of industry competition, the semiconductor sector could be in for more consolidation, writes RealMoney's Kevin Curran who covered Broadcom , Real Money's Stock of the Day.
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