Conglomerates Didn’t Die. They Look Like Amazon.

Andrew Ross Sorkin:

The model begins like this: A company that is successful in one area turns itself into a conglomerate by using its free cash flow to finance the development or acquisition of businesses in other areas — at first, ones that are similar to their current business, and later often ones that are farther afield. And then the company does this again and again.
When such an economic machine works, it works extraordinarily well. But when any one of the major levers in the machine breaks or even stalls, the entire enterprise comes under pressure. Shareholders start complaining that the sum of the parts would be worth more separately than together.

All stars one day fade and fizzle. But with Amazon, maybe even more so than any of its tech brethren, you have to wonder how much is predicated around Bezos himself? Even Apple, post-Jobs, has made it work and soared to new heights, at least fiscally. If/when Bezos ever steps down, does the next leader of Amazon turn down the spend and start to milk the profits? Does the whole machine start to fall apart without the brilliant financial masterstrokes of Bezos? Is that when "Day 2" starts? Entirely unclear. 


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