Amazon CEO Jeff Bezos plans to switch from his role.
James Martin / CNET
Amazon CEO Jeff Bezos will retire later this year, handing over the reins of the world’s largest e-commerce business to Andy Jassy, a longtime lieutenant who runs Amazon Web Services. Amazon nested the news in its fourth-quarter earnings announcement, beating expectations.
The transition comes as Amazon moves through a difficult period in its history. The company picks big profits as consumers, closed at home due to the COVID-19 crisis becomes more dependent on both e-commerce and online services. It, in turn, has scrutinized legislation concerned about the power Amazon has over retailers who use it as an online store window.
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Amazon’s power was broadly displayed in the fourth quarter. Net income rose to $ 7.2 billion, or $ 14.38 per share, from $ 3.3 billion a year ago. Net sales increased 44% to $ 125.6 billion. Both figures beat Wall Street’s estimate of $ 7.23 per share in earnings and $ 119.7 billion in net sales, according to Yahoo Finance. (Amazon previously forecast sales of between $ 112 billion and $ 121 billion.)
Bezos will leave his role after building a juggernaut that transformed online retail and gained market share in cloud computing by building on the infrastructure Amazon needed to run its own giant sales platforms. He also oversaw efforts involving devices from the Kindle e-reader on the echo smart home system, televisions and movies with Prime Video, and venture into the world of groceries, including the purchase of Whole Foods Markets. He even got podcasts with a registration service and the purchase of podcast publisher Wondery.
Jassy is an experienced Amazon hand who started at the company in 1997. He formed AWS from its inception and became head of the division in 2016.
While most people know Amazon for its e-commerce operations, AWS is usually responsible for the bulk of Amazon’s revenue. It brought in $ 12.7 billion in net sales in the fourth quarter. AWS dominates the cloud services market and accounts for about a third of the market share. The division provides enterprise database storage and cloud computing services, including support for machine learning and artificial intelligence attempts.
Jassy is not nearly as well known as Bezos, but he talks about controversial issues in technology. In 2019, he criticized President Donald Trump for bringing politics into the bidding process for a major Department of Defense contract that Microsoft eventually won.
He is also Amazon’s development of facial recognition tools defendsand said governments should have access to the most advanced technology to keep their citizens safe. In a 2019 interview with PBS’s Frontline, Jassy indicated that he is aware of the possibility that AWS technology could be abused. “If there is any form of documented evidence that people are abusing the technology, we will suspend the ability of people to not only use the technology, but to use AWS,” he said.
The company carried out the sentiment last month, suspension of cloud hosting services to the social media platform Parler because he did not moderate content that advocated violence after Parler was used on January 6 by rioters who stormed the Capitol.
Amazon has generated huge profits in the last three months of 2020, though it has spent billions addressing logistical problems posed by the coronavirus pandemic. struggling to keep up with an increase in orders in April. At the time, Bezos warned that Amazon could spend more than $ 4 billion dealing with the pandemic in the quarter. Amazon projected that it would spend so much again in the last three months of 2020 over the pandemic.
The company also faced the challenge of protecting its large staff from the coronavirus. In October, Amazon said the virus 20,000 US frontline workers infected, including grocery workers at the Whole Foods Market owned by Amazon. The company has put in place safety and testing measures to protect workers.
Holiday sales have been widely projected to increase Amazon’s revenue, as e-commerce businesses experienced a boost from customers when they closed, and deliver. In its press release, the company said it had shattered its holiday records, “delivering more than a billion toys, home, fashion, electronics, beauty and personal care products to customers worldwide.”
Amazon chief financial officer Brian Olsavsky said in a conversation with investors that the company will have to spend to address pandemic claims. “Hopefully the vaccine will get going,” he said.