Author Topic: Hey, Amazon! To Heck With Profits—Just Keep Making Great Stuff  (Read 229 times)


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  Amazon CEO Jeff Bezos Amazon CEO Jeff Bezos  

Amazon announced its second quarter earnings today. And, again, investors are supposedly skeptical and growing tired of the company's insistence on spending everything it makes, the way a high-growth startup looking for customers would.

You know what Amazon should tell those investors? Bug off.

Amazon boosted its revenue by $2.87 billion in the second quarter compared to a year earlier, to $15.7 billion. Yet it also posted a net loss for the quarter of $7 million. This isn't a fail like BlackBerry, which is struggling to stay in the black quarter-to-quarter because it lost its grip on the market. Amazon is really rolling, maybe more so than any of the other Big 5 (Apple, Google, Facebook, Microsoft being the others), and seemingly keeps churning out one interesting service after another.

Really, Amazon CEO Jeff Bezos shouldn't care about its investors, the public perception of its stock price, Wall Street predictions or analysts or any of that noise. His company should keep on rolling out new products that enrich our lives and give us more choices for digital media, gadgets and ways to buy stuff. Profits? Who needs 'em?

In the last quarter, Amazon:

  • Introduced the Amazon Appstore for Android to more than 200 countries across the globe (and settled a lawsuit with Apple about its name taboot).
  • Introduced the Kindle Fire to 170 countries.
  • Came out with several original pilot television shows for Amazon Prime Video On Demand, several of which will go into full production.
  • Introduced Kindle Worlds for fan fiction authors.
  • Will help pay pay-per-hour employees get associates or vocational degrees.
  • Lowered the price of its EC2 cloud services.
  • Introduced a digital currency—Amazon Coins—for its Android games and apps on Kindle Fire devices.
  • Expanded the choices in its Video On Demand store through a variety of partnerships.
Some companies don't get stuff like this done in a year. It was just a normal quarter for Bezos' company. You have to spend money to make money, right?

If I want, soon I might be able to buy all my groceries through Amazon Prime. Really, what's not to like? It's not like Amazon is spending its money willy-nilly (OK, Kindle Worlds may be a little frivolous). Bezos spends on growth and that growth is directly leading to revenue and customer acquisition and more good products for the rest of us.

Of course, there's a downside to Amazon's seeming uninterest in making profits. Eventually investors will sour, the stock price will drop and the employees who make these great products will get upset and leave when their stock options submerge. Bezos loves growth. It can be addicting. But, like any addict, that may someday catch up with Amazon and hurt it more than helps.

Let's just hope that day isn't any time soon. (And if it does come, Amazon could make a mint by launching its own ad platform based on its customer data trove, as Derek Brown has argued here at ReadWrite.)


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