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Incoming Amazon CEO expected to drive growth amid pandemic, antitrust scrutiny

Amazon.com Inc.'s incoming CEO Andy Jassy is expected to guide the e-commerce company into its next era of growth amid a pandemic that has fueled sales, while also navigating through growing antitrust scrutiny and other challenges, industry analysts said.

Jassy is one of the most respected executives in the world, analysts said, noting his track record overseeing the growth of Amazon Web Services Inc. from a startup in 2006 into a $51 billion annual cloud-computing business. Jassy is set to take the reins of Amazon as CEO in the third quarter.

"Jassy is the gold standard when it comes to the cloud market," said Daniel Ives, analyst with Wedbush Securities, in an interview. "What he has done at AWS is a big part of Amazon's success today."

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Amazon Web Services CEO Andy Jassy speaking at the 2020 virtual edition of the re:Invent conference.
Source: AWS

Jassy is also a well-known player within the company who will provide continuity with the transition, said Michael Levine, senior research analyst for internet and media at Pivotal Research Group, in an interview.

"He's the strongest guy on the bench, most-known athlete, well-regarded internally and externally," Levine said. "It's like you know what you are getting."

Jassy, whose tenure with Amazon dates back to 1997, is a trusted lieutenant of current CEO and founder Jeff Bezos, who will transition to the role of executive chair in the third quarter.

Filling big shoes

Jassy has a big job ahead of him. Amazon has evolved from an online bookseller into a multifaceted company diversified in areas including Alexa-connected devices, home security, and grocery following the purchase of Whole Foods Market Inc. in 2017. Amazon has also delved into healthcare with the 2018 acquisition of PillPack Inc. and the launch of its online Amazon Pharmacy platform in late 2020.

In the past year, Amazon has emerged as a beneficiary of sales shifts during the pandemic while at the same time facing considerable challenges, including disruptions within the company's supply chain and one-day shipping program.

Amazon's fourth-quarter 2020 net sales reached $125.56 billion, with AWS sales accounting for $12.74 billion or about 10% of that total.

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Any momentum Jassy helps create moving forward will likely come from Amazon's established, if wide-ranging, territory, said Levine of Pivotal. "I feel like there are a lot fewer uncertainties over the path of what happens for this business now than there probably was three or four years ago," he said.

Ives said Jassy can help Amazon grow in areas such as advertising and healthcare, but tapping the AWS chief as Amazon's next CEO is a clear sign the company will move aggressively to go after the cloud business, fending off competitors such as Microsoft Corp. that have gained share.

"Over the next 12 to 18 months, I think investors are going to be watching this closely to see if there's any missteps," Ives said.

Jassy will also be in the political spotlight over U.S. antitrust issues that Amazon is facing along with other tech companies including Facebook Inc., Apple Inc. and Google LLC. Amazon also faces scrutiny from the European Union, which accused Amazon of violating antitrust rules by using data from third-party sellers on its platform to compete against them with its own retail business.

"He's going to be a human pinata in front of the judiciary committees," said e-commerce expert Jason Boyce, founder of Avenue7Media, a top seller on Amazon. "I think [Bezos] should take a victory lap, but he is literally pushing Andy Jassy into the hot seat here."

That said, Jassy's calm and humble demeanor should help him navigate through the antitrust challenges. "He's got a very low heartbeat, which is going to serve him well," Boyce said in an interview.

Challenges ahead

The transition could be complicated if Bezos doesn't let go of day-to-day operations, said Jason Schloetzer, associate professor at Georgetown University's McDonough School of Business, in an interview.

"He really needs Jeff to step away and be less visible," Schloetzer said. "It's really up to Bezos about shaping his role in a way that allows Andy to be the superstar CEO and Jeff can really focus on other activities."

Bezos said in a Feb. 2 email to employees that he plans to focus on other interests, including The Washington Post, the Bezos Earth Fund, and his Blue Origin space company, while still being involved in Amazon decisions.

But letting go will be easier said than done, Schloetzer said. "When you have a new person come in, and they start to undo some initiatives and undo some ideas that you started to put in place, it can be difficult to let go."