Amazon will never make a real profit, for two reasons:
a) Amazon is in a fundamentally shitty business: retail. It's retail on the Internet, but still retail. Amazon may successfully get into a real tech business, but they've been fairly unsuccessful at this so far--and there strategy continues to be to compete on price (AWS, Kindle etc.) which means no profits.
The real reason, though is:
b) Bezos is so focused on the long term that all profits will be immediately reinvested. Amazon is an ego thing for him and he wants it as big as possible at the limit. So Amazon will continue to grow but never make a profit. It's value is forever unmonetizable, even as it continues to own more physical stuff (warehouses, etc.).
a) Amazon is in a fundamentally shitty business: retail. It's retail on the Internet, but still retail. Amazon may successfully get into a real tech business, but they've been fairly unsuccessful at this so far--and there strategy continues to be to compete on price (AWS, Kindle etc.) which means no profits.
The real reason, though is:
b) Bezos is so focused on the long term that all profits will be immediately reinvested. Amazon is an ego thing for him and he wants it as big as possible at the limit. So Amazon will continue to grow but never make a profit. It's value is forever unmonetizable, even as it continues to own more physical stuff (warehouses, etc.).
reply