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Amazon said yesterday that its Q1 sales were up 15 percent to $22.72 billion, though it still managed to show a loss for the period - $57 million.

However, the big news from the company's numbers was the revelation that Amazon's Web Services business - which essentially turned cloud computing into a business - generated net sales of $1.57 billion in the first quarter, up 49 percent from $1.05 billion in the first quarter of 2014.

“Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating,” Jeff Bezos, founder/CEO of Amazon, said in a prepared statement.

The New York Times writes this morning that "Amazon Web Services revenue is growing fast enough that ultimately there would be regulatory requirements to disclose it. Amazon, which tries to reveal the minimum about how it works, merely said the current moment was 'appropriate'."
KC's View:
Two things.

First, breaking out the Web Services business means that we're probably getting a somewhat truer picture of the retail business's profitability. So this is a good thing.

Second, it is critical to remember that Amazon could turn a profit if it wanted to ... but that it continues to invest, invest and invest some more, in technology initiatives that it feels it needs in order to stay ahead of the e-commerce pack. While investors are leery about this approach, I actually think that Amazon is making the right strategic decision. If it takes its foot off the pedal, it seems likely that Walmart would do everything it can to take advantage of that seeming weakness.