Is Amazon Making Netflix's Mistake?


Netflix's CEO Reed Hastings, in a recent interview with The New York Times, admitted that the company made some big strategic mistakes when it was under competitive pressures in its fight against Blockbuster. Hastings said that Netflix was distracted by other business ideas that looked exciting at the time, but that just served to pull focus away from what really mattered -- its core business. One of those new ideas was launching its own production and distribution studio, called Red Envelope, that's since closed. He called the temptation getting "distracted by the shiny object."

Could be making the same mistake now? After all, the e-tailer has been pouring investments into everything from self-produced comedy shows, to the in-house development of tablet hardware, to cloud services for enterprises. In the video below, Fool contributor Demitrios Kalogeropoulos argues that Amazon is better served by focusing on what still makes up close to two-thirds of its business: online retailing.

Amazon has mastered the art of online retail by creating a virtual supercenter. To learn more about Amazon and another rising retail giant, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

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Fool contributor Demitrios Kalogeropoulos owns shares of Apple and Netflix. Erin Miller owns shares of Apple. The Motley Fool recommends, Apple, Google, and Netflix. The Motley Fool owns shares of, Apple, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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