Economía

Profits down but sales soaring at Amazon

Profits down but sales soaring at Amazon

Despite posting healthy revenue gains and a net income of $197 million on revenue of $38 billion, Amazon missed its second quarter expectations with higher-than-expected operating expenses. The Jeff Bezos-led company's operating loss for international markets widened to $724 million during the quarter-ended June, compared with $135 million in the corresponding period last year.

Earlier this week, Jeff Bezos became the single wealthiest person in the world after a healthy bump in Amazon's stock price on Thursday morning sent the CEO's net worth to an incredible $90.9 billion on the Bloomberg Billionaires Index. As the Forbes stated, the first time when Bezos appeared in its list was in 1998 with $1.6 billion. India and China comprise a major chunk of Amazon's international segment. The spectre of Amazon's disruption now hangs over a dizzying array of industries. That's faster than 34% in the previous quarter. All along the way, Amazon used technology and sheer force to ruthlessly cut prices.

The businessman studied electrical engineering and computer science at Princeton University before working on Wall Street. Meanwhile, many startups rely on Amazon to help them build growing companies. "To be fair, much of this is deliberate: Amazon chooses to reinvest in its business and to sacrifice profits to boost its market share and dominance".

Bezos has been hailed as the smartest guy in business for turning a bookselling platform into a disruptive force that has flipped traditional retail on its head. Amazon's ticker symbol, as we used to call it, is AMZN, and Microsoft's is MSFT. But it also raised a question: Is Amazon more about creating a channel to a wealthy target audience?

In fact, Ovum predicts that the installed base of digital assistants will outnumber the human population by the end of that time frame.

New warehouses are being opened in Tilbury and Warrington this year, both equipped with robot pickers and automated shelving, while 450 new jobs are being created at its London headquarters. In addition, all three men had the ability to turn an idea into a product and the smarts to commercialize the product. Net income declined to US$197m, or US40c a share, from US$857m, or US$1.78 a share, a year earlier. Ten years ago only 2.5 percent of retail sales took place online, and today that number is 8.5 percent - about a $300 billion change.

It remains to be seen which proposals - ranging from libraries to tech talent in Africa - have caught his imagination.

Let me point out that if you want to follow the billionaires' race between Bezos and Gates you can put the two stock quotes on your monitor. He is the author of Active Value Investing (Wiley) and The Little Book of Sideways Markets (Wiley).