1999 — Profitable Giant vs. Unprofitable Disruptor
Amazon vs. Microsoft, 1999
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It's late 1999. You have $10,000 to invest and are choosing between two very different companies: Microsoft, the most valuable company in the world and a dominant, wildly profitable software monopoly — and Amazon, an online retailer growing revenue explosively while losing more money every year it operates.
Microsoft in 1999 is about as "proven" as a company gets: dominant in PC operating systems and office software, generating enormous, consistent profit. It's also mid-trial in United States v. Microsoft, a federal antitrust case; findings issued in November 1999 conclude the company holds monopoly power and has used it anti-competitively — a real legal overhang on the stock. Amazon, by contrast, had grown revenue from about $148 million in 1997 to roughly $1.6 billion in 1999, while its net loss grew right alongside that revenue, to somewhere around $720 million for 1999 alone, as it poured cash into warehouses and infrastructure under a strategy explicitly called "get big fast."