Wednesday, August 02, 2006

Amazon's Lack of Focus, Revisited

Early this year, I questioned the wisdom of Amazon's expanding its brand scope from online book shopping to online "everything" shopping. I pointed out that Al Ries and Laura Ries had all but predicted dire consequences for Amazon, but that trends in the stock price didn't look too bad at that time.

Well, late last week the Washington Post told us that:
It was the sixth consecutive quarter the company showed a decline in profit, sending the company's stock price down 22 percent Wednesday in Nasdaq trading.
Indeed, the one year stock chart for Amazon doesn't look good at all:

The article also tells us that, instead of narrowing its focus, Amazon is entering the grocery and movie businesses.

Amazon has a great name and built a great brand when it stood for "online books". Now I fear the warnings of Ries and Ries are coming true.

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