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It seems to me that Amazon is the last of the 90s dotcoms. It's barely viable, so it just keeps going, but there's a huge premium on its share price that seems

It seems to me that Amazon is the last of the 90s dotcoms. It's barely viable, so it just keeps going, but there's a huge premium on its share price that seems to presume that one day it will get a monopoly on online sales and suddenly be able to generate huge profits. As if this wouldn't (a) immediately result in massive cannibalization by new entrants or failing that (b) anti-trust enforcement.

wmf 14y ago
They may lose money on Kindles, Kindle books, and Prime, but don't forget the cloud.
- seunosewa 14y ago
  Good point. Overpriced products that people think they can't live without are great for profits.
- podperson 14y ago
  Yes, thanks to their vast operating profits from the cloud they have a P/E of ~3000. Let's be generous and assume Amazon could push a button and run the rest of its business at break even, and that its revenues from the cloud are pure profit -- its P/E would only be somewhere between 50-70.
  - wmf 14y ago
    It depends whether you assume that virtually all servers will go to the cloud and Amazon will have monopoly market share in the cloud.
    - podperson 14y ago
      I think a business strategy that assumes "someday in the future we'll be a monopoly and charge rents" isn't a good one.
rtpg 14y ago
Is amazon really "barely viable"? They seem to sell huge volumes in their main business. They might be losing money in the kindle business but that won't affect their main business (at least I wouldn't think so)
- podperson 14y ago
  Before considering Kindles or "Prime" Amazon is barely profitable. It loses money on both of these new businesses, and it has the sword of Damocles (sales tax) ready to drop on it at any moment.