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It's ok, they'll make it up in volume. I'm only half joking, the fact that PRIME is part of their retail sales program means that they do make more sales to PR

by nirvana 14y ago

It's ok, they'll make it up in volume. I'm only half joking, the fact that PRIME is part of their retail sales program means that they do make more sales to PRIME members. If their deals for content are cheap enough, it could work without significant changes... eventually. I'm just amazed that they are able to do this for so long. Their P/E (in profitable quarters) is astronomical.

erikpukinskis 14y ago
> I'm just amazed that they are able to do this for so long. They keep wiggling into new growth markets. If they were just a bookstore their stock price would've collapsed. But they've gotten into: * Retail (a multi-trillion dollar market in the U.S. alone) * Media sales and rental (much smaller) * Cloud computing (something like $100 billin and growing) * Consumer computing devices (something in the low hundreds of billions) All they have to do to justify their P/E is be in a position to credibly say they can get a serious slice of these markets. And honestly, they're positioned extremely well in all four: * In retail they're indisputably at the lead of home shopping, which seems to be the future. * There one of a handful of companies with serious share in movie/music distribution at this point * They're probably the biggest cloud provider, one that other cloud providers are built on. * Given the growing importance of media as a selling point and revenue stream for device makers, and great traction in tablets, they're positioned very well in devices too.
tptacek 14y ago
Their P/E is astronomical because their business model is based on buying market share. If you don't think that's a valid strategy, you don't invest in AMZN at all. Would that it were true that you could simply compare tech companies by P/E to get a read on how "jazzed" the market is about a company, but Amazon and Apple are great illustrations of why you can't.

by nirvana 14y ago

erikpukinskis 14y ago

> I'm just amazed that they are able to do this for so long. They keep wiggling into new growth markets. If they were just a bookstore their stock price would've collapsed. But they've gotten into: * Retail (a multi-trillion dollar market in the U.S. alone) * Media sales and rental (much smaller) * Cloud computing (something like $100 billin and growing) * Consumer computing devices (something in the low hundreds of billions) All they have to do to justify their P/E is be in a position to credibly say they can get a serious slice of these markets. And honestly, they're positioned extremely well in all four: * In retail they're indisputably at the lead of home shopping, which seems to be the future. * There one of a handful of companies with serious share in movie/music distribution at this point * They're probably the biggest cloud provider, one that other cloud providers are built on. * Given the growing importance of media as a selling point and revenue stream for device makers, and great traction in tablets, they're positioned very well in devices too.

tptacek 14y ago

Their P/E is astronomical because their business model is based on buying market share. If you don't think that's a valid strategy, you don't invest in AMZN at all. Would that it were true that you could simply compare tech companies by P/E to get a read on how "jazzed" the market is about a company, but Amazon and Apple are great illustrations of why you can't.