Amazon

Ticker AMZN

Today's data summary

Market closed
% change
-2.02%
Price US dollars
1869.00
Change
-38.57
As of 18:28 19 May 2019
Market cap. US dollars
919,647.80 million
As of 18:28 19 May 2019

Latest updates

Amazon seeks share of consumer spending

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Greg Lawless of Shore Capital has also been thinking about the implications of the tie-up between Amazon and Deliveroo.

"Today’s news will send shockwaves through the UK food service sector, given the potential firepower and distribution capabilities that Amazon has at its disposal. It has always felt a question of when, not if, Amazon would enter the food service arena. Whether this leads to an outright acquisition of Deliveroo in time, remains to be seen," he said.

"The Amazon strategic stake in Deliveroo suggests that the technology giant has its eyes on adjacent consumer markets, as it attempts to capture an even greater share of consumer spending," he added.

Deliveroo dominance?

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Just Eat's shares are down 8% as a result of Amazon's investment in Deliveroo, mentioned earlier.

Julie Palmer, partner at Begbies Traynor, said:The partnership comes at a time when Deliveroo and its competitors, Uber Eats and Just Eat, are investing and evolving rapidly as they continue to grab market space from each other.

"This fresh investment could help the food courier to steal a march on its rivals. Despite having failed with its own service, Amazon Restaurants UK, Amazon knows the potential that is still to come from this growing market and has put its money where its mouth is.

"If Amazon also shares its expertise of customer service and network for couriering, then Deliveroo is creating a partnership which could follow in Amazon’s steps and dominate the marketplace.”

What does the Deliveroo deal mean for Just Eat?

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Analysts at Liberum reckon that concerns about the impact on Just Eat from the investment by Amazon in Deliveroo are overdone.

The fears are that the extra funding will allow Deliveroo to become a more effective competitor to deliver companies such as Just East.

"We see those concerns as overdone and that Amazon's investment does not hide the fact that, as an online classified marketplace portal like AutoTrader and Rightmove, Just Eat's market leading position will be incredibly difficult to overcome, especially given its strength in smaller towns," they say.

"What we do think is more likely than a serious threat from competitors is that Just Eat - and the other portals - are bought by bigger players looking to dominate the food delivery portal market," they add.

Just Eat's shares are down around 7% while Takeaway.com, listed in Amsterdam, is off 2.5% and Delivery Hero, listed in Frankfurt, is down 5%.

Not just about food

Today Programme

BBC Radio 4

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Louise Dudley of Hermes Investment Management has been speaking to the Today Programme about that investment in Deliveroo by Amazon. There had been rumours Uber was also interested.

"It's really a case [that] they haven't really been able to replicate what Deliveroo have been offering. They closed their Amazon Restaurant UK stores at the end of December. They weren't able to compete within the market so they've gone for the buying option instead. They've got the money behind them to do that," she said.

While "it's the future of dining" it's not just about food delivery, she said.

"It's not just a food delivery company, it's very much a tech company. They have this tech platform that is seen is very attractive.They are able to expand into new areas and think about how people's tastes are evolving and be able to predict what stores will be successful. That predictive growth is very attractive to Amazon".

Do we need to talk about Alexa?

Today Programme

BBC Radio 4

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What is your Alexa - if you have one - recording of your conversations? One version of Amazon's smart speaker might be investigated by US regulators after a complaint from privacy campaigners.

They want authorities to look at the Echo Dot Kids, which is an Alexa aimed at children, which is not on sale in the UK, but it's coming.

It records what the child says to the device.

Angela Campbell is a board member of the Campaign for a Commercial-Free Childhood.

"They [Amazon] will save those voice recordings on the child's voice for ever, unless the parents take action to eliminate those voice recordings and they don't make it easy to do that", she said.

"The transcripts of those Amazon voice recordings remain in the cloud forever," she alleges.

Amazon says it uses the data to better recommend products.

Amazon also says parents have the ability to delete recordings, and says its device does comply with US law.