Amazon.com Takes a Hit in the Third Quarter

Comments

1
Amazon's investing massively in cloud services infrastructure. That's probably all this is.
2
@1, that would hit the balance sheet as a capital improvement and affect cash on hand (converting one asset into another asset) but it wouldn't affect the P&L since you don't expense capital improvments such as the cloud services infrastucture.

Capital improvements would be expensed only as a depreciation expense and then over the long term life of the capital expendeture
3
That being said, they are selling the Kindles at a loss, (they are not generating enough immediate revenue to offset the COGS (cost of goods sold) for the number of Kindles they have already sold. Given the fact they have a long wait (three weeks) to get a Kindle to a customer they are accounting for the sale on the books at the time of purchase; not the time of shipment.
4
I am sorry for the super simple accounting answer but as they say knowledge is power.
5
And they're being hacked pretty badly.
6
All that Amazon Prime two-day shipping can't help. I'm betting that most people who pony up the $79 per year are getting way more than their money's worth out of it.
7
Um, children, I'm no fan of Amazon, especially Kindle. But they are kicking ass as a business.
8
@6,

You can already get free (slow) shipping. How much is two-day shipping compared to ground? Free super saver is also frequently shipped via USPS, not UPS.
9

Makes even less sense they would splurge on an expensive $1 billion campus in overcrowded Seattle down town.

Investors should be irked.
10
@6 I'm sure Prime makes back more than its cost, or they (okay, we*) wouldn't keep it going, much less pile on more features (Prime video).

It leads to a lot more add-on sales, and purchases in departments customers wouldn't normally go to Amazon for.

(*) I have no knowledge of the actual internal financials. It's just my personal impression.
11
@9 I'm sure that property values of the SLU campus aren't going to be taking a nose dive any time soon.