Why is Amazon all of a sudden not re-investing all its profits?
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Re: Why is Amazon all of a sudden not re-investing all its profits?
#2I think they calculated wrong and forgot to spend all the money. They mentioned that Cloud Services was unusually more profitable this quarter.
Re: Why is Amazon all of a sudden not re-investing all its profits?
#3I think they calculated wrong and forgot to spend all the money. They mentioned that Cloud Services was unusually more profitable this quarter.
I don't know. If you look at the income/growth graphs that growth from web services has continued quarterly for two years, and this is the second quarter of profit. I doubt they could have had an "oops" moment regarding almost a billion dollars over two quarters (6 months). It looks like a major change. Unless, like the article suggests, they are taking profits now to prepare for a larger capital investment in the near future.
Re: Why is Amazon all of a sudden not re-investing all its profits?
#4http://www.nytimes.com/2014/04/26/business/amazons-shrinking...
I think a couple years ago they got tired of their stock tanking every time they reported a lower profit than previous quarters.
Re: Why is Amazon all of a sudden not re-investing all its profits?
#5I think they calculated wrong and forgot to spend all the money. They mentioned that Cloud Services was unusually more profitable this quarter.
Perhaps they were expecting the Echo to really flop.
Re: Why is Amazon all of a sudden not re-investing all its profits?
#6Because that was the plan all along?
At some point Amazon is going to get a return for all of its investment. The entire market is now dancing to Amazon's tune. Why not now?
Re: Why is Amazon all of a sudden not re-investing all its profits?
#7Because that was the plan all along? At some point Amazon is going to get a return for all of its investment. The entire market is now dancing to Amazon's tune. Why not now?
They don't seem ready to me. Seems like a temporary blip due to their investment schedules. They clearly have ambitions to build out a logistics infrastructure, and they haven't even setup in some obvious markets yet (Australia). Lots more growth to pursue.
Re: Why is Amazon all of a sudden not re-investing all its profits?
#8[deleted]
Re: Why is Amazon all of a sudden not re-investing all its profits?
#9Summary:
Because they're "proving" they can make a profit when they want to in preparation for spending a decade investing 100% of profits into building a world-wide logistics system.
(I think it's an interesting theory, but the author provided little evidence.)
Re: Why is Amazon all of a sudden not re-investing all its profits?
#10I think they calculated wrong and forgot to spend all the money. They mentioned that Cloud Services was unusually more profitable this quarter.
Another thing to consider is how the money is spent changes how much profit is made.
If Amazon reinvests into assets, that money isn't considered a loss. So it doesn't reduce profits. So when Amazon buys a video library those IPs are assets.
You only deduct spending that are expenses.
As Amazons business changes it might be harder to hide their profits in expenses.