“Sold on eBay, Shipped by Amazon.com”, says the headline in the biz section of the NYTimes today. This is a great example of Amazon’s efforts to use a catalyst strategy to drive growth and profits.
Originally, Amazon was an on-line version of a large bookstore. But with its investment in a software platform for buying and selling things and in a physical distribution network it provides an exchange platform. Through Amazon Web Services it is opening up its software platform–much like Microsoft does with Office and Windows–so third parties can build apps (and businesses!) on top and, as the eBay deal shows, it is opening up its distribution facility.
It is a potentially brilliant move that could lead to explosive growth if done right. A rich ecosystem of online and physical merchants could gravitate to the Amazon shopping mall which will then attract customers for them with probably some spillovers for Amazon’s core businesses.
Amazon isn’t the first or last to take this approach. Google has done it by extending its proprietary ad platform to publishers. And even automobile manufacturers are thinking about opening up the software platforms that run the cockpit so others can develop apps. Check out my other book Invisible Engines for more examples like these.
Print This Post Email This Post
Filed Under: Internet-Based, Software, New Business Models