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The track record shows that Amazon has been good at investing in their business. That's something that doesn't show up in accounting profits or cash flows, but
by paulsutter 10y ago
The track record shows that Amazon has been good at investing in their business. That's something that doesn't show up in accounting profits or cash flows, but over time in the growth of the business.
As for all these comments, sure there are companies that squandered vast sums in misguided attempts to invest in their business. And there are companies that admitted they had no idea how to invest in their business and sat on the cash. Neither of those examples are of any use in determining whether Amazon is investing wisely or foolishly.
Some analysts think that Amazon doesn't actually make money, others think they invest but invest poorly, others think they are brilliant geniuses who invest perfectly. Most of whom are at least a little bit wrong. Which goes to show that even the "experts" don't really know.
- sumanthvepa 10y agoI suspect even Amazon doesn't quite know how it's investments will perform at the time they make them. There seems to be a lot trial and error in the process, but they seem to have figured out how to be efficient at doing it.
- aserafini 10y agoBingo. They run a lot of experiments. Their culture is, try a lot of things, we know a lot of them will fail but some of them (we don't know which) will be home runs (Kindle, Prime, AWS). Failure of an individual experiment is acceptable because Jeff Bezos knows you can't run a lot of experiments without a lot of them failing. Contrast to most other companies where involvement in a failed project ends your career.
- caseysoftware 10y agoYes and having $billions in the bank (or in cash flow) allows you to experiment to the tune of $millions with little risk. And realistically, they're touching enough industries and have enough smart people that even their "exhaust" is useful.. see AWS. ;)