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Amazon Reports Surge in Profit

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Re: Amazon Reports Surge in Profit

#161

Post by mabbo »

r00fus wrote: post #16
DasIch wrote: post #10

Is there any reason why Amazon would suddenly "waste" money on profit? Could this be an indication of a change in strategy or is this just a temporary thing?

Bezos will hold a press conference "We are sorry we did not realize we would make as much money as we did - consequently our spending just could not keep up" while AMZN tanks.

Bezos's goal seems only to be Amazon's growth and efficiency. I'm really starting to believe that being one of the 10 richest people on the planet was just a happy side-effect that only distracts him from his goal.

Re: Amazon Reports Surge in Profit

#162

Post by nopzor »

Johnny555 wrote: post #12
bookmarkacc wrote: post #11

Earlier quoted context omitted.

The problem is people who arent big enough to have a whole data center. Or dont have the upfront capital even if its benefital in the longterm. They will still rely on Amazon.

You don't need to own a whole datacenter to own machines located in a datacenter, my company keeps machines in a 4 rack cage in a datacenter. (and plans to empty that cage by the time our contract runs out in September to finish the migration to AWS). Our AWS bill is just a bit higher than what we were paying for the cage rental + internet connectivity alone.

That doesn't sound possible. Are you saying your raw bill for _just_ colo (ie. space and power) and bandwidth (ie. IP transit) was less than your _entire_ AWS bill? I've never heard of anyone take such an extreme stance.

Re: Amazon Reports Surge in Profit

#163

Post by serge2k »

temp20160423 wrote: post #148
serge2k wrote: post #39

Earlier quoted context omitted.

> If you get stocks granted as a bonus (most of us do), Or by bonus do you mean just the amounts they give you as regular refreshes?

AMZN doesn't give cash bonuses; the RSU refreshes are treated like a bonus that pay-off in the future

I was mostly just curious if RSU refreshes was what was meant by bonuses.

Just never heard the term bonus used to describe them, but that makes sense.

Do other places typically do additional stock grants (bonuses) that don't vest for 2 years?

Re: Amazon Reports Surge in Profit

#164

Post by izacus »

cs702 wrote: post #138

The most interesting tidbit for me is that Amazon would have reported losses without AWS. The AWS business generated $2.6B in revenues in the fourth quarter, which is only 9% of Amazon's total revenues of $29.1B; but operating income for the AWS business was $607M, or 118% of company-wide net income of $513M.[1] Without AWS, Amazon would have reported losses! [1] http://phx.corporate-ir.net/External.File?item=UGFyZW5…

Which means that they're using profits from an unrelated market to undercut and push out / destroy any competition in their storefront market. Not a good situation for future competition.

Re: Amazon Reports Surge in Profit

#165

Post by MichaelGG »

crucifiction wrote: post #151
MichaelGG wrote: post #75

Earlier quoted context omitted.

Google Cloud is amazing. Azure is terrible. Azure js for companies that, 15 years ago, were spending their budget on Windows. Great for "enterprises" that want to "leverage cloud". Azure is slow, expensive, poorly designed (network and SSD designs are just bad), and the real slap to the face is that the management UI Is worse than anything from Windows 8.

"enterprises" that want to "leverage cloud" is where all of the money is. AWS is chasing that dragon too. There is way more money selling cloud stuff to Coca-Cola and GE than to software companies.

Yeah I'm sure this can work out well for Microsoft. But let's not pretend they're in any way a good fit for the scenarios gcloud covers. I'd wager for most of the people on HN, or at least the "startup" focused ones that want a solid IaaS, Google blows Azure out of the water.

Re: Amazon Reports Surge in Profit

#166

Post by [deleted] »

izacus wrote: post #164
cs702 wrote: post #138

The most interesting tidbit for me is that Amazon would have reported losses without AWS. The AWS business generated $2.6B in revenues in the fourth quarter, which is only 9% of Amazon's total revenues of $29.1B; but operating income for the AWS business was $607M, or 118% of company-wide net income of $513M.[1] Without AWS, Amazon would have reported losses! [1] http://phx.corporate-ir.net/External.File?item=UGFyZW5…

Which means that they're using profits from an unrelated market to undercut and push out / destroy any competition in their storefront market. Not a good situation for future competition.

[deleted]

Re: Amazon Reports Surge in Profit

#167

Post by tuna-piano »

adventured wrote: post #126
tuna-piano wrote: post #25

Amazon's rationale for its lack of profits is well known... Why does this rationale not apply to its cloud business? Is the cloud business so good that it generates profits regardless of the investment it makes... or is the retail business so bad that it can't generate profits regardless of the investment AMZN makes in it?

> Why does this rationale not apply to its cloud business Radically different margins. AWS is running on a 23.5% operating income margin. Retail doesn't come close to that. Operating margins on their traditional North America business are 3.5%, and 1.3% internationally. Retail has to do almost seven times the sales of AWS to match the operating income. The cash cow they have in AWS, is supporting the outsized valuati…

I think you're right, that comparing operating margin is the right way to look at this. But do Amazon and its investors really believe that investing in video streaming, fire phones, etc will improve that margin?

Re: Amazon Reports Surge in Profit

#168

Post by oarsinsync »

bcbrown wrote: post #155
cle wrote: post #76

Earlier quoted context omitted.

Neither is leasing out compute resources. The devil's in the details. Scale, convenience, ease of use...

How long has leasing out compute resources been an industry? 1-2 decades? I'm sure there were leases on timesharing systems in the 50s and 60s, but that's still just a half century, and hardly the same industry as AWS.

It's not the same industry as AWS in the same way as Amazon isn't really the same industry as catalog/mail order businesses of yore (around 1850s I believe that began).

You could get limited amounts of compute time on a mainframe back in the day, just like you could order flannel and get it delivered in days/weeks.

Now you get massive scale compute resources on demand and fresh fruit, veg and almost anything else delivered within an hour.

Neither of them are dissimilar from present offerings, but neither are the same industry as their predecessors.

Re: Amazon Reports Surge in Profit

#169

Post by richmarr »

izacus wrote: post #164
cs702 wrote: post #138

The most interesting tidbit for me is that Amazon would have reported losses without AWS. The AWS business generated $2.6B in revenues in the fourth quarter, which is only 9% of Amazon's total revenues of $29.1B; but operating income for the AWS business was $607M, or 118% of company-wide net income of $513M.[1] Without AWS, Amazon would have reported losses! [1] http://phx.corporate-ir.net/External.File?item=UGFyZW5…

Which means that they're using profits from an unrelated market to undercut and push out / destroy any competition in their storefront market. Not a good situation for future competition.

How to you reach that conclusion from those numbers?

Re: Amazon Reports Surge in Profit

#170

Post by kuschku »

richmarr wrote: post #169
izacus wrote: post #164

Earlier quoted context omitted.

Which means that they're using profits from an unrelated market to undercut and push out / destroy any competition in their storefront market. Not a good situation for future competition.

How to you reach that conclusion from those numbers?

Because that’s literally what they say?

Amazon’s physical stores and Amazon’s online retail business are not profitable. They are selling below price. This is per definition predatory pricing.

They are only able to offset this because AWS is making more profit.

This is evident if you just look at the numbers.

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