Vox has an interesting piece about the negative reactions last week to Amazon's announcement that its record sales were short of expectations, which caused its share price to drop.
The fact is that a look at Amazon's sales numbers shows a line moving steadily upward, while its profit numbers remain flat. It "does not look like a company that is trying and failing to increase its profits. Nor does it look like a brand new startup that is eschewing short-term profits in order to establish its business.
"Amazon is a pretty old company, and its profits have never meaningfully differed from zero even as it gets bigger and bigger. That's because — drumroll please — Amazon's leadership, from CEO Jeff Bezos on down, are deliberately redeploying every dollar of revenue they earn into making the company bigger and bigger.
One can debate the wisdom or sustainability of this strategy ... but it's clearly the strategy."
But the big mistake, the author argues, "is in understating Amazon's ambitions."
Worth reading ... here.
The fact is that a look at Amazon's sales numbers shows a line moving steadily upward, while its profit numbers remain flat. It "does not look like a company that is trying and failing to increase its profits. Nor does it look like a brand new startup that is eschewing short-term profits in order to establish its business.
"Amazon is a pretty old company, and its profits have never meaningfully differed from zero even as it gets bigger and bigger. That's because — drumroll please — Amazon's leadership, from CEO Jeff Bezos on down, are deliberately redeploying every dollar of revenue they earn into making the company bigger and bigger.
One can debate the wisdom or sustainability of this strategy ... but it's clearly the strategy."
But the big mistake, the author argues, "is in understating Amazon's ambitions."
Worth reading ... here.
- KC's View:
