Slashdot Mirror
Amazon's Ambitious Bets Pile Up, and Its Losses Swell
New submitter shirleymarone sends word that investors are becoming impatient with Amazon's willingness to absorb short-term losses for theoretical long-term gains. The company brought in over $19 billion in revenue last quarter, but reported a net loss of $126 million. The company warned of even greater losses this quarter.
Amazon officials exude a serene if vague confidence. "We're not trying to optimize for short-term profits," Thomas J. Szkutak, the chief financial officer, said in a conference call. "We're investing on behalf of customers and share owners," he said. "We're fortunate to have these opportunities." But even the analysts, who are generally enthusiastic about the company and its global ambitions, are asking slightly more pointed questions these days. For all these investments, one analyst asked Mr. Szkutak, why are sales not increasing even faster? His answer: Just wait. ... Amazon, which is based in Seattle, long ago transcended its roots as a simple retailer. In recent weeks it introduced Zocalo, a document storage and sharing service that grew out of its fast-growing web services division. It began a program to allow readers to consume as many e-books as they want for a set monthly fee. And it is starting to ship its long-awaited entry in the smartphone sweepstakes. The phone, the result of years of development by thousands of Amazon programmers and designers, is meeting some resistance from reviewers.
Wow look at that... a company that (at least a little bit) cares about the customers at the end, not penny-pinching to make investors happy (for now).
As a software engineer who is often asked to consider "the cloud," at what point should things like poor company performance impact software design decisions? It's easy to say not to use the cloud, but the cost savings for some make it irresistible. I suppose at some point AWS might go away due to a CEO change, corporate shift, etc., but I have a feeling that, with all of the consumer services using AWS, it will be considered "too big to fail," and be required to stay up (and, therefore, I won't have any reason to consider AMZN's performance as a software design concern.
Anyone have thoughts on this?
Yes, I agree with this. But, at some point, investors need to get a return on their investment: it's what they asked for and it is required by law. The have never paid a dividend (as far as I can tell), and so their stock price is the only real way to get a return on the investment. At what point does "avoiding short-term profits for long term gains" become a losing bet? When does "long term" happen? That's what investors want to know.
That is not a loss, that is breaking even.
Yes, between the profits that they could be making, and them breaking even, they are "losing" money in some senses. But in terms of real world "losses" , they are not swelling or piling up, they are just spending their money as fast as it is coming in; And at the end of the year breaking even (within a percentage of a 1 percent).
Troll is not a replacement for I disagree.
Any company willing to tell it's investors "screw you", because they are looking long-term instead of focusing only on quarterly gains, that's a company I'm willing to invest in.
It's a sad state of affairs in the USA that almost every public company, without question only looks as far as their next quarterly report, and no further down the road. This is why all these businesses are run by idiots that can't even tell you what their company even *does*, because they are so focused on manipulating the stock price and their personal bonuses.
One reason the Japanese kicked our asses in the 1980's is that they were looking at 10-year plans while the USA looked only to the next quarter. Now the Chinese are doing the same, with long-term strategies, and we continue to have not learned our lessons.
So, if Amazon is looking long-term, then they are better managed than 99% of USA businesses. That's a company I can believe in. And I'll invest in that.
If telephones are outlawed, then only outlaws will have telephones.
These almost certainly aren't real loses, just tax loses. The profits have all just been shifted offshore as the big multinationals do now.
blindly antisocialist = antisocial
And the farmer cares about his pigs so he doesn't butcher them until they get nice and fat.
Copyright (c) 1990 - 2014 Dice. All rights reserved. Use of this comment is subject to certain Terms and Conditions.
Probably because, we expect, that Slashdot readers are generally comfortable enough with elementary math to be able to either multiply $1300 by 3 ($3900) or 4 ($5200), or has easy access to a calculator.
Yes, and stock price is not cemented to profits.... Stock climbs as the influence of the company climbs. FB is a famous company that never made any profits, or even showed any ability to ever produce profits, that still had a tremendously good stock evolution. Or you could just look at Amazon's Stock Price, to see that it has been climbing and climbing and climbing, making their investors money (over the last 4 years alone it has gone up to 5 times its starting value).
Troll is not a replacement for I disagree.
Amazon's revenue grew 23% over the same quarter last year. If the company were not growing AND not profiting, that would be bad. But as large as Amazon's revenues now are, to still be growing that fast is very impressive, and proves they could start taking profits at any moment simply by pocketing more revenue instead of re-investing.
Actually it was referring to the reason behind purchasing 1300 ebooks.
Troll is not a replacement for I disagree.
“I was in Nashville, Tennessee last year. After the show I went to a Waffle House. I'm not proud of it, I was hungry. And I'm alone, I'm eating and I'm reading a book, right? Waitress walks over to me: 'Hey, whatcha readin' for?' Isn't that the weirdest fuckin' question you've ever heard? Not what am I reading, but what am I reading FOR? Well, goddamnit, ya stumped me! Why do I read? Well . . . hmmm...I dunno...I guess I read for a lot of reasons and the main one is so I don't end up being a fuckin' waffle waitress.” -- Bill Hicks
But seriously, why? Why buy from Amazon or why buy at all (i.e. pirate)? Or is it why buy 1300 books? I know several people that can easily read an entire (200-300 page) book in just a few hours. One of them reads at least one book per day -- this is in addition to having a life. I'll never read 1300 books but they will have no problem doing it.
Stupider like a fox! - H.S.
Amazon has been booking profits since 2002.
The issue is that Amazon's return on investments has been low, lower than the S&P 500 as a whole. They have been pursing market share instead of short term profits. They have been investing in new risky business areas. Stockholders currently share Bezos's bullish predictions that short term sacrifice is worth the risky long game. It has worked for Berkshire Hathaway but not so well for Sony. At some point it is going to need to become a more normal company.