Amazon is officially America’s second trillion-dollar company

Thanks to a bump from growing revenue sources like digital advertising, Amazon rose quickly through the ranks to become the 2nd company to hit a $1T valuation.

September 5, 2018

Yesterday, Amazon’s market value briefly topped $1T, making them the second US company in the world to hit 13 figures (Apple passed the mark just a month ago).

But while Apple reached $1T by dominating one category (cool tech hardware), Amazon reached $1T by diversifying revenue streams. Now, Amazon is applying its recipe for disruption-fueled growth to the $88B digital advertising industry.

A tale of two trillions: The Buffett-Bezos binary 

Apple, a fav of Warren Buffett, moves slowly and cooks up profits; Amazon moves fast and eats losses. Both approaches are working — but Amazon’s approach works faster.

Amazon hit $1T 21 years after its IPO, 17 years faster than Apple. The big bookseller also grew at a quicker incremental clip: they went from $600B to $700B in 16 days, compared to Apple’s 1 year and 257 days.

Different paths, different payouts

Apple’s strategy of high-value product leadership has worked: Apple controls more than 50% of the smartphone market across the globe. Amazon, on the other hand, dominates e-commerce (49¢ of every $1 spent) and data storage, and has also made serious leaps in food delivery, entertainment, and healthcare.

A $1k investment in Apple’s IPO would yield roughly $527k today. That same investment in Amazon’s IPO would net $1.2m — with 17 fewer years of waiting.

Even in the digital ad game, Amazon has room to grow

Now, Amazon is poised to jump into the tech-crowded market of digital advertising. Amazon’s big advertising rivals Google and Facebook now account for 50%+ of the $88B digital advertising market.

But while advertising is the backbone of business at Facebook and Google, it’s just another department at Amazon — one that happens to be growing 130% year over year.

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