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Google is in all of those areas as well, they're just minor plays. Last quarter, ~10% of Google's revenue came from non-advertising Services and ~7% came from

Google is in all of those areas as well, they're just minor plays. Last quarter, ~10% of Google's revenue came from non-advertising Services and ~7% came from Google Cloud. The ~82% that comes from ads is split between Search, YouTube, and the Network. Amazon by comparison is 83% dependent on Amazon retail. Cloud fills the remaining 17%. They're not any better diversified, by revenue.

mh- 4y ago
I don't think you can look at Amazon's "dependency" on revenue through that simplistic of a lens. AWS is purported to be much more profitable than their retail operations.
MuffinFlavored 4y ago
What are the margins on Amazon's retail revenue after all logistics costs versus the margins on Google's advertising? I'm going to take a guess and say retail probably breaks even (almost by design by Amazon but not sure if it'll ever be more than a 10-20% margin business because by design they are offering traditionally expensive services like fast shipping, very lenient returns at very low cost/price to the end user) whereas advertising is probably... 80% margin? I know there are server costs, engineers to maintain them, but if Google stopped investing in growth as far as diversifying/expanding advertising services goes engineer/developer/management wise... how lean could they run? Could they support Google's current ad offerings with a core team of... 1000 engineers? 500? 200?
- bushbaba 4y ago
  Amazon doesn't want to show profit in retail. It instead re-invents much of the profit into their logistics and technology. Buying all those 747s for prime air these past few years wasn't cheap. Amazon go wasn't cheap. Alexa sure ain't cheap. That all comes out of the margin of retail. Amazon retail isn't just getting revenue from e-commerce sales. There's multiple diversified business units part of that division. For example people pay for amazon logistics, amazon warehousing, etc.
master_crab 4y ago
This completely misses the importance of the cloud to Amazon. AWS profit margin is around 30% whereas retail is probably hovering in the low to high single digits (5-8%). AWS makes profit for Amazon, and retail offers free cash flow to Amazon. Both are important and to say Amazon isn’t diversified due to revenue is simplistic.

mh- 4y ago

I don't think you can look at Amazon's "dependency" on revenue through that simplistic of a lens. AWS is purported to be much more profitable than their retail operations.

MuffinFlavored 4y ago

What are the margins on Amazon's retail revenue after all logistics costs versus the margins on Google's advertising? I'm going to take a guess and say retail probably breaks even (almost by design by Amazon but not sure if it'll ever be more than a 10-20% margin business because by design they are offering traditionally expensive services like fast shipping, very lenient returns at very low cost/price to the end user) whereas advertising is probably... 80% margin? I know there are server costs, engineers to maintain them, but if Google stopped investing in growth as far as diversifying/expanding advertising services goes engineer/developer/management wise... how lean could they run? Could they support Google's current ad offerings with a core team of... 1000 engineers? 500? 200?

bushbaba 4y ago
Amazon doesn't want to show profit in retail. It instead re-invents much of the profit into their logistics and technology. Buying all those 747s for prime air these past few years wasn't cheap. Amazon go wasn't cheap. Alexa sure ain't cheap. That all comes out of the margin of retail. Amazon retail isn't just getting revenue from e-commerce sales. There's multiple diversified business units part of that division. For example people pay for amazon logistics, amazon warehousing, etc.

master_crab 4y ago

This completely misses the importance of the cloud to Amazon. AWS profit margin is around 30% whereas retail is probably hovering in the low to high single digits (5-8%). AWS makes profit for Amazon, and retail offers free cash flow to Amazon. Both are important and to say Amazon isn’t diversified due to revenue is simplistic.