‘Self-improvement tip: add “and then someone waxes your scrotum” to every insipid fortune cookie missive from now on.’ –Anaiis Flox
With every quarterly earnings call, my Twitter feed lights up with jokes about how Amazon continues to grow its revenue and make no profits and how trusting investors continue to rewards the company for it. The apotheosis of that line of thoughts is a quote from Slate’s Matthew Yglesias earlier this year: “Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers.”
It’s a great quote, one that got so much play Amazon even featured it in its Annual Letter to Shareholders. But like much of the commentary about Amazon, it’s a misreading of Amazon’s business model.
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If Amazon has so many businesses that do make a profit, then why is it still showing quarterly losses, and why has even free cash flow decreased in recent years?
Because Amazon has boundless ambition. It wants to eat global retail.
