Amazon’s stock recently took a hit because the company old made only about $60M last quarter. Expenses are up, largely due to the forthcoming Fire tablet and per-unit projected losses of $50, although a loss of $10/unit has also been reported. In short, Bezos is betting on the future at the expense of the present.
Wall Street smacked Amazon too hard. Bezos’ bets have proven to be pretty good over the last 17 years. Fire will be an important, revenue-generating plank in his company’s platform. Much like Google adding Plus as a social plank, Amazon had to launch something beyond an ereader. After all, it’s still primarily an ecommerce company. Look for Amazon to make a bundle off of purchases now made easy, simple, and fast with a portable Amazon shopping cart.
For those who don’t remember, Amazon made a similar series of bets by building far more storage and data centers than it needed. The result? The company will make $750M of pure profit this year by selling excess compute power to small and large businesses.