Amazon, the world’s second most valuable listed company, has evaded antitrust action so far by being cheap. But $1 travel toothbrushes with free shipping offer little protection if regulators pick a new way of measuring tech dominance and try to split companies apart.

Carving Amazon up could mean breaking it into two divisions: Amazon Retail and Amazon Web Services (AWS). That might appease campaigners. Shareholders would be unlikely to gain a valuation bump.

Any conglomerate discount evaporated from Amazon shares in 2015 when cloud computing business results were first disclosed. AWS could certainly survive without its better-known retailing counterpart. The business, which provides data storage to companies, is smaller but nimbler. Revenue in the second quarter rose 49 per cent. The division contributed more than half of the group’s total operating profit.

There is no reason to expect a slowdown. Global spending on cloud computing will grow more than 20 per cent this year, according to Gartner. AWS already has the lead over rivals Microsoft and Google. If spun off and valued at 25 times estimated ebitda it would carry a market value of more than $500bn — about half Amazon’s market capitalisation.

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None of this means AWS is dragging a limp retail business behind it. Shoppers are as likely to look at Amazon as Google when searching for goods. Sales of advertising space have given Amazon a high-margin revenue stream.

For now, the chances of a split are slender. President Donald Trump may be critical of Amazon’s perceived dominance. But he is pleased with the US stock rally. Amazon’s shares have contributed — up 60 per cent this year versus the S&P 500’s 7 per cent rise.

Breaking Amazon up would hamper the experimentation that has driven growth. Amazon shareholders are willing to overlook skinny retail profit margins in the cause of expansion. Untethered from the horsepower of its profitable cloud-computing business, Amazon Retail might find them less tolerant.

Lex recommends the FT’s Due Diligence newsletter, a curated briefing on the world of mergers and acquisitions. Sign up at ft.com/newsletters

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