Amazon.com, Inc. (NASDAQ:AMZN) is having issues with book publishers and we have recently covered how the company is delaying the stock and orders to impact the sales of the publishers it has problems with.
David Garrity of GVA Research was on CNBC earlier today and he discussed about the Amazon.com, Inc. (NASDAQ:AMZN) vs. publishers issue. Garrity also spoke how the eCommerce giant wants to control the book sales be it online or physical. Amazon.com, Inc. (NASDAQ:AMZN) controls 1/3 of the book sales in the United States. So he thinks from the standpoint of book sales, Amazon.com, Inc. (NASDAQ:AMZN) has become an ‘800 pound gorilla.’
Garrity feels that the policies Amazon.com, Inc. (NASDAQ:AMZN) brings in for the publishers to get access to its market place for digital and physical book sales and its stature in the book sales industry might actually trigger an investigation at some point. He was asked the reason behind all this, to which Garrity replied that the stock of the company has not been very exciting for the investors and has been trading below its 200 day moving average so far during Q2 and also the fact the investors didn’t show much interest after the results of Q1 might have triggered Amazon.com, Inc. (NASDAQ:AMZN) to generate revenue from cutting the cost. In this process this added charges might have got evolved.
He feels that Amazon.com, Inc. (NASDAQ:AMZN) entering the food delivery business might not generate huge revenues for the company. He was then asked whether the Drones project had some future as a realistic idea. Garrity said that the Drones project doesn’t look to go ahead at least for the current year, however it won’t stop Amazon.com, Inc. (NASDAQ:AMZN) from experimenting. He also mentioned about the Fire phone launch by Amazon.com, Inc. (NASDAQ:AMZN).
“The smartphone thing introduced last week, on its own this is something that’s just being thought of another way of basically drive product revenues. It’s probably something on which Amazon is going to see a loss initially”
He said that Amazon.com, Inc. (NASDAQ:AMZN) has always been a fly wheel concept and the company takes the cash flow and reinvest in revenue growth.