OK, so obviously Amazon shareholders are happy with Amazon basically not declaring profits because they trust Bezos to basically lead Amazon to monopolistic dominance in x years. How did this work in the beginning, when it wasn't immediately clear that Amazon would be as dominating as it is now. I understand that retail/e-commerce is a low margin industry.
Let's take a competitor for example. Alphabet has the most ridiculous profit margins. It's just the nature of the online ad business and Google's dominance of it. Google is getting into e-commerce more and more (Express and Shopping) but as said, this is a low margin industry. So Google has less to gain in terms of profit than Amazon has to gain from getting into the ad business in turn.
But why are shareholders making such a fuss when Alphabet sees rising costs? Obviously they're gonna invest tens of billions into Cloud Platform and especially AI (differentiating factor), because they have to. They can't let Amazon continue to dominate with AWS. Is this just good old short term thinking on the investors part. Because it seems to me that in tech, and especially and the level of AMZN, MSFT, GOOG it's all about capturing the market and having the dominant (or at least competitive) platform with the most engagement and developer activity.
What do you think`?
Submitted May 29, 2018 at 11:52AM by Wighnut https://ift.tt/2smHwhz
