Why is Amazon all of a sudden not re-investing all its profits? • Hacker News Board

Re: Why is Amazon all of a sudden not re-investing all its profits?

#81

Post by brightball » Fri, Apr 29, 2016, 8:58 PM UTC

benologist wrote: post #72

serge2k wrote: post #71

Earlier quoted context omitted.

Musk made money on Paypal before he started Tesla and SpaceX. Bezos made money on Amazon before he started Blue Origin. Plus Bezos doesn't have an obsessive internet cult worshipping him.

Bezos is a much more accomplished business man - Tesla has ~3,000 employees SpaceX has ~5,000 Solar City has ~13,000 PayPal has ~13,000 Total: 34,000 as they stand today which is a very generous measure since it's years after Musk left PayPal and he doesn't even work at Solar City afaik. Amazon has ~222,000 employees, roughly 8x larger than all of those companies combined, not even counting Blue Origin, WaPo, or w/e…

Employee count should get some heavy value since the real benefit to society from most companies comes from payouts to the rest of the economy via payroll and stock.

Unless we're enabling larger ecosystems around what they've done that creates even more. So far I'm seeing very little in terms of ecosystem around Musk's companies. On the contrary, he seems more focussed on doing exactly the opposite (like Tesla's focus on going around local car dealers).

Re: Why is Amazon all of a sudden not re-investing all its profits?

#82

Post by JoeAltmaier » Fri, Apr 29, 2016, 8:58 PM UTC

ChuckMcM wrote: post #45

rodionos wrote: post #34

Earlier quoted context omitted.

Is this "tuning" typically done on the revenue side or the cost side? I'm surprised it's at all possible with proper revenue and cost recognition policies in place.

At Sun there was literally a taped square on the floor of the factory, and things in that square were "shipped" to as the quarter was finishing up the factory would figure out how much had to be shipped to make the numbers, and they would process enough orders to make that happen. If there weren't orders, then some "one time deals" would be mentioned to top customers who might get a really nice discount or something.…

One old company I worked at shipped empty boxes to a customer to make the quarter come out right. Shipped the hardware the next week when it was ready.

Re: Why is Amazon all of a sudden not re-investing all its profits?

#83

Post by bitemix » Fri, Apr 29, 2016, 9:06 PM UTC

I bet they go big on transportation.

Re: Why is Amazon all of a sudden not re-investing all its profits?

#84

Post by benologist » Fri, Apr 29, 2016, 9:06 PM UTC

rgbrgb wrote: post #78

benologist wrote: post #72

Earlier quoted context omitted.

Bezos is a much more accomplished business man - Tesla has ~3,000 employees SpaceX has ~5,000 Solar City has ~13,000 PayPal has ~13,000 Total: 34,000 as they stand today which is a very generous measure since it's years after Musk left PayPal and he doesn't even work at Solar City afaik. Amazon has ~222,000 employees, roughly 8x larger than all of those companies combined, not even counting Blue Origin, WaPo, or w/e…

IDK, employee count seems like a red herring. To me it's much more impressive to do a lot with a small number of employees (like WhatsApp's 18M users/engineer [0]). Amazon incredibly impressive, I just mark the high employee count as a point against them rather than in their favor. [0]: http://www.wired.com/2015/09/whatsapp-serves-900-million-use...

There's some notes about how Whatsapp achieved that here [1], they attribute their capacity in part to Erlang's concurrency and in part to cloud hosting with SoftLayer. Amazon is the origin of SoftLayer's cloud services and single biggest reason one engineer can manage arbitrary numbers of servers/users:

    The popularization of the term can be traced to 2006 when 
    Amazon.com introduced its Elastic Compute Cloud. [2]

[1] http://research.dyn.com/2014/03/global-consumerwhatsapp/

[2] https://en.wikipedia.org/wiki/Cloud_computing#History_of_clo...

Re: Why is Amazon all of a sudden not re-investing all its profits?

#85

Post by serge2k » Fri, Apr 29, 2016, 9:07 PM UTC

benologist wrote: post #72

serge2k wrote: post #71

Earlier quoted context omitted.

Musk made money on Paypal before he started Tesla and SpaceX. Bezos made money on Amazon before he started Blue Origin. Plus Bezos doesn't have an obsessive internet cult worshipping him.

Bezos is a much more accomplished business man - Tesla has ~3,000 employees SpaceX has ~5,000 Solar City has ~13,000 PayPal has ~13,000 Total: 34,000 as they stand today which is a very generous measure since it's years after Musk left PayPal and he doesn't even work at Solar City afaik. Amazon has ~222,000 employees, roughly 8x larger than all of those companies combined, not even counting Blue Origin, WaPo, or w/e…

Yeah but he's not as cool as Elon Musk (AKA LITERALLY TONY STARK).

People want a Tesla. SpaceX (and I do like this) is really open compared to Jeff SECRECY! Bezos' Blue Origin.

Re: Why is Amazon all of a sudden not re-investing all its profits?

#86

Post by partiallypro » Fri, Apr 29, 2016, 9:09 PM UTC

mcherm wrote: post #9

Summary: 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.)

It's no rumor, Amazon is a logistics company. Beit servers or inventory. They just needs a reliable distribution system to compete with UPS and FedEx. I know for sure they are looking begin competing there, as one of my sources put it, "we've outgrown UPS."

Re: Why is Amazon all of a sudden not re-investing all its profits?

#87

Post by clavalle » Fri, Apr 29, 2016, 9:15 PM UTC

brashrat wrote: post #79

clavalle wrote: post #63

Earlier quoted context omitted.

Discounted future /free/ cash flows. That's cash flow minus capital expenditures which means, at some point, Amazon is going to have to decide enough is enough and allow overall cash flow to come in well above its capital expenditures...like it's just done. Better a bit sooner than later (thanks to the discount part) if you think can sustain your advantage for less than you've been spending in proportion to your reve…

if we're going to quibble, it's "discounted /expected/ future cash flows"

Maybe I misunderstood him but I thought he was saying that as long as there were solid cash flows despite full capital expenditures that the stock would reflect those cash flows.

Less of a quibble and more of a core misunderstanding of what cash flow means in that context.

Re: Why is Amazon all of a sudden not re-investing all its profits?

#88

Post by rgbrgb » Fri, Apr 29, 2016, 9:29 PM UTC

brightball wrote: post #81

benologist wrote: post #72

Earlier quoted context omitted.

Bezos is a much more accomplished business man - Tesla has ~3,000 employees SpaceX has ~5,000 Solar City has ~13,000 PayPal has ~13,000 Total: 34,000 as they stand today which is a very generous measure since it's years after Musk left PayPal and he doesn't even work at Solar City afaik. Amazon has ~222,000 employees, roughly 8x larger than all of those companies combined, not even counting Blue Origin, WaPo, or w/e…

Employee count should get some heavy value since the real benefit to society from most companies comes from payouts to the rest of the economy via payroll and stock. Unless we're enabling larger ecosystems around what they've done that creates even more. So far I'm seeing very little in terms of ecosystem around Musk's companies. On the contrary, he seems more focussed on doing exactly the opposite (like Tesla's focu…

That's kind of a 0-sum outlook on the role of businesses in society (gather wealth to distribute to employees). Most of the businesses we're talking about are benefiting society not through job creation but through technology creation. Google is not important because they employ tens of thousands of engineers, they're important because Search benefits general knowledge and decision making of everyone with an internet connection. Likewise Amazon, Tesla, SpaceX are pushing humanity forward through invention.

Re: Why is Amazon all of a sudden not re-investing all its profits?

#89

Post by serge2k » Fri, Apr 29, 2016, 9:37 PM UTC

rgbrgb wrote: post #78

benologist wrote: post #72

Earlier quoted context omitted.

Bezos is a much more accomplished business man - Tesla has ~3,000 employees SpaceX has ~5,000 Solar City has ~13,000 PayPal has ~13,000 Total: 34,000 as they stand today which is a very generous measure since it's years after Musk left PayPal and he doesn't even work at Solar City afaik. Amazon has ~222,000 employees, roughly 8x larger than all of those companies combined, not even counting Blue Origin, WaPo, or w/e…

IDK, employee count seems like a red herring. To me it's much more impressive to do a lot with a small number of employees (like WhatsApp's 18M users/engineer [0]). Amazon incredibly impressive, I just mark the high employee count as a point against them rather than in their favor. [0]: http://www.wired.com/2015/09/whatsapp-serves-900-million-use...

Except most of those are fulfillment center employees anyway. Plus they are working on the robots.

Re: Why is Amazon all of a sudden not re-investing all its profits?

#90

Post by mangeletti » Fri, Apr 29, 2016, 10:13 PM UTC

My theory: Bezos/Amazon is preparing for a potentially dangerous financial situation in the market, and taking a little cash out for a rainy day is a good idea.