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Amazon also has crazy AWS profits to subsidize major investments. Uber lacks such a super profitable but tangential revenue stream.

by zelias 10y ago

wnevets 10y ago
People seem to underestimate just how much money AWS makes.
- pdeuchler 10y ago
  AWS makes almost no money compared to their core business, it's around 10%, maybe a little bit more. The profit from AWS, however, is something like 50% of Amazon's total profit. That said, it's not hard to occupy a huge percentage of profits from Amazon since they purposefully run almost every other facet of the business at razor thin margins.
  - wnevets 10y ago
    3.2 billion of revenue in one quarter [1] is is nothing to scoff at. However the more important point is without the profit from AWS, Amazon would still be posting huge deficits [2] and would probably face much higher shareholder pressure to produce. [1] http://venturebeat.com/2016/10/27/aws-reports-3-2-billion-in-revenue-in-q3-2016-up-55-over-last-year/ http://venturebeat.com/2016/10/27/aws-reports-3-2-billion-in... [2] http://www.geekwire.com/2016/amazon-without-aws-online-retailer-posted-big-loss-not-booming-cloud-business/ http://www.geekwire.com/2016/amazon-without-aws-online-retai...
    - ben0x539 10y ago
      Isn't that an invalid assumption that Amazon would do nothing else differently if they didn't have AWS?
  - mikeash 10y ago
    I always understood "make money" as referring to profit, not revenue. A business with $1 trillion in revenue and $1 trillion in expenses makes no money.
    - __derek__ 10y ago
      "I have a trillion-dollar business: I take dollar bills from one person and give them directly to another and repeat that a trillion times a year."
      - gls2ro 10y ago
        Maybe there can be profit to be made from this business too with a bit of _delay_ in between receiving and giving. I'm trying here just to imagine this company. I think it will work because of the scale. I'm thinking: I take dolar bills from one person, I keep them 10 days and then I give them to another one. And I repeat this for 1 trillion dollar value. Even if the profit in 10 days is 0.1% then you will have 1 million dollar remaining to you. What I am trying to say is that it seems to be a value in being so big, because of how big numbers math works but also because people are impressed by it (think going to a bank asking for money)
        aserafini 10y ago
        This is how Amazon benefits from free cash flow in their retail business. With payment days of >90 days to their suppliers but almost immediate payment from their customers they get 90 days to reinvest that money at a profit before paying it back. Essentially an interest free loan from their suppliers.
        chetanahuja 10y ago
        > almost immediate payment from their customers Isn't there a gap between customer making the credit card payment and the bank transferring the actual money into Amazon's account?

Amazon also has crazy AWS profits to subsidize major investments. Uber lacks such a super profitable but tangential revenue stream.

by zelias 10y ago

Amazon also has crazy AWS profits to subsidize major investments. Uber lacks such a super profitable but tangential revenue stream.

wnevets 10y ago

People seem to underestimate just how much money AWS makes.

pdeuchler 10y ago
AWS makes almost no money compared to their core business, it's around 10%, maybe a little bit more. The profit from AWS, however, is something like 50% of Amazon's total profit. That said, it's not hard to occupy a huge percentage of profits from Amazon since they purposefully run almost every other facet of the business at razor thin margins.
- wnevets 10y ago
  3.2 billion of revenue in one quarter [1] is is nothing to scoff at. However the more important point is without the profit from AWS, Amazon would still be posting huge deficits [2] and would probably face much higher shareholder pressure to produce. [1] http://venturebeat.com/2016/10/27/aws-reports-3-2-billion-in-revenue-in-q3-2016-up-55-over-last-year/ http://venturebeat.com/2016/10/27/aws-reports-3-2-billion-in... [2] http://www.geekwire.com/2016/amazon-without-aws-online-retailer-posted-big-loss-not-booming-cloud-business/ http://www.geekwire.com/2016/amazon-without-aws-online-retai...
  - ben0x539 10y ago
    Isn't that an invalid assumption that Amazon would do nothing else differently if they didn't have AWS?
- mikeash 10y ago
  I always understood "make money" as referring to profit, not revenue. A business with $1 trillion in revenue and $1 trillion in expenses makes no money.
  - __derek__ 10y ago
    "I have a trillion-dollar business: I take dollar bills from one person and give them directly to another and repeat that a trillion times a year."
    - gls2ro 10y ago
      Maybe there can be profit to be made from this business too with a bit of _delay_ in between receiving and giving. I'm trying here just to imagine this company. I think it will work because of the scale. I'm thinking: I take dolar bills from one person, I keep them 10 days and then I give them to another one. And I repeat this for 1 trillion dollar value. Even if the profit in 10 days is 0.1% then you will have 1 million dollar remaining to you. What I am trying to say is that it seems to be a value in being so big, because of how big numbers math works but also because people are impressed by it (think going to a bank asking for money)
      - aserafini 10y ago
        This is how Amazon benefits from free cash flow in their retail business. With payment days of >90 days to their suppliers but almost immediate payment from their customers they get 90 days to reinvest that money at a profit before paying it back. Essentially an interest free loan from their suppliers.
        chetanahuja 10y ago
        > almost immediate payment from their customers Isn't there a gap between customer making the credit card payment and the bank transferring the actual money into Amazon's account?