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Revenue doesn't matter. Profit does. Most of their profit is from AWS.
by m0zg 7y ago
Revenue doesn't matter. Profit does. Most of their profit is from AWS.
- robocat 7y agoDivision profits are mostly an accounting ghost. Tomorrow they could decide to use the AWS profits for growth, and reduce the growth spending on Amazon by the same amount, and suddenly the sense of your sentence is reversed.
- m0zg 7y ago> Division profits are mostly an accounting ghost. Shareholders seem to think otherwise.
- robocat 7y agoAMZN is well known for paying out its profits to shareholders? I think what shareholders value is a little deeper than woo “AWS appears profitable”!
- m0zg 7y agoIf AWS wasn't profitable, AMZN would not be able to grow, and its share price would immediately fly off a cliff. But you know this already. You just want to argue.
- jnbiche 7y ago> If AWS wasn't profitable, AMZN would not be able to grow Amazon wasn't even profitable until 10 years after its founding. So that's demonstrably incorrect. BTW, the thesis that "if a business isn't profitable, it wouldn't be able to grow" flies in the face of hundreds of successful venture capital businesses funded by the yCombinator (founder of Hacker News) and many other venture capitals funds. Profitability is one variable in a very complex mix. I personally like the idea of bootstrapping, which does require profitability, but that's not the only way to successfully grow a business. You can also grow a business using debt, or by using equity.
- User23 7y agoTo Amazon future free cash flows are what matters, as pretty much every Bezos shareholder letter ever has explicitly said. Edit: When I read his letter in 2004 I went long and I've never looked back. https://www.sec.gov/Archives/edgar/data/1018724/000119312505070440/dex991.htm https://www.sec.gov/Archives/edgar/data/1018724/000119312505...