Amazon's Biggest Vulnerability Right Now

Michael Seto/Business Insider

Amazon is the unstoppable force in e-commerce.

For years, any company that tried to compete with it ended up steamrolled, or Amazon bought it.

Look at Zappos and Diapers.com.

Now, things might be different because of the smartphone.

A bunch of startups are carving up e-commerce opportunities and making them apps: Instacart for delivering groceries. Uber for getting you a ride. Postmates for delivering things. Etc.

Amazon, for the most part, has just ported its comprehensive website to its app.

Will that work? So far, Amazon is doing just fine. 

But, it might be missing a big opportunity by failing to adapt to a new medium.

Look at Facebook, which has carved itself up into pieces. Instead of one giant Facebook app, we have Facebook, Facebook Messenger, Instagram, WhatsApp, and a bunch of other little apps.

Amazon just launched PrimeNow, a standalone app that can deliver things in 1 hour in NYC. So, it's not like Amazon has its head in the sand. It's catching on and experimenting.

But can Amazon afford to dump more money into a war with all these on-demand startups popping up? Will investors allow it to keep losing gobs of money? Or will they hammer the stock? Amazon pays people in stock, so if it tanks, that's going to make it hard to retain people.

Farhad Manjoo wrote about this in the New York Times. Jillian D'Onfro also wrote about it a few months ago here at Business Insider.

We spoke about Amazon on this week's Jay and Farhad podcast, which is embedded below. We also talk about Snapchat, which had some of its business details exposed as part of the Sony hack. 

The Jay and Farhad show is a weekly podcast I do with Farhad Manjoo, tech columnist at The New York Times. This week we had Business Insider's Nicholas Carlson on to talk about about Jack Dorsey and Square. Manjoo interviewed Dorsey, and Carlson recently wrote a big story on Square. In addition to those topics, we hit on Instagram reaching 300 million users, and Ev Williams' reaction to Instagram's big milestone. 

You can subscribe to our podcast in iTunes here. You can subscribe to it in iTunes here. Here's an RSS link to the show. I use SoundCloud as a host, so you can listen to the show over there, too.

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.