Amazon.com, Inc. (AMZN) Will Win in the Long Term Against All Odds

The peer market

Google Inc (NASDAQ:GOOG)  has the largest number of users across the globe in terms of cloud computing services. It also recently announced the launch of a same-day shipping service, an experiment called “Google Shopping Express” that will start off as a free service during its San Francisco pilot stage. Google entering e-commerce is a big blow to Amazon; with a healthy $40 billion in the bank, Google is set to venture into the e-commerce space and take a chunk out of the $65 billion in online shopping revenue that Amazon earns. Google is trying to dominate the entire Internet space and Amazon will have to spend more to keep up with Google’s new venture.

eBay Inc (NASDAQ:EBAY) is also giving Amazon’s bottom line a hard time as it changes its business model to same day delivery. It, along with Wal-Mart Stores, Inc. (NYSE:WMT), has generated more than $500 million in adjusted free cash flow last quarter. That means that most of Amazon’s competitors are building a good base of cash stock pile to invest in infrastructure later on. The company is expected to handle more mobile transactions in the future. These transactions already reached $13 billion last year and is set to grow more. Cross-border transactions also constitute 20% of eBay’s business, which is a positive sign for investors.

Conclusion

To conclude, the Goodreads deal seems to be a good move by Amazon.com, Inc. (NASDAQ:AMZN). But the main threat comes from Google as it plans to enter aggressively in the e-commerce market which is Amazon’s lifeline. Nevertheless, Amazon has still extremely strong fundamentals and efficient management. Investors are willing to wait for profits while the company invests in growth. Mr Bezos’ vision is to make Amazon a $1 trillion e-commerce company by 2016. This makes me believe that the stock is overpriced currently but sustainable in the long term, and this makes the company a winner.

Tanya Kanodia has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, eBay, and Google. The Motley Fool owns shares of Amazon.com, eBay, and Google.

The article Amazon Will Win in the Long Term Against All Odds originally appeared on Fool.com.

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