Amazon Grows Revenue, Keeps Cloud Numbers Hidden - InformationWeek
Cloud // Infrastructure as a Service
12:01 AM
Charles Babcock
Charles Babcock
Connect Directly

Amazon Grows Revenue, Keeps Cloud Numbers Hidden

As Amazon reported a 35% jump in revenue, it dodged key questions about Kindle Fire and AWS cloud services--namely, whether AWS is helping Amazon's bottom line or still working toward a breakeven point. posted its fourth-quarter earnings report Tuesday, marking the second consecutive quarter with mixed results. Its stock price was promptly pummeled in afterhours trading, dropping 8% to $177-178 a share.

The main culprit was Amazon's expenses, which have been going up, and its cash flow, which has been going down as it rapidly expands data centers, fulfillment centers, and head count and invests in expanding its Kindle tablet business.

Nevertheless, its 2011 year-end results offer a full display of its multi-pronged approach to expanding its business. CEO Jeff Bezos did not participate on the call, but he did issue a statement saying results were gratifying for Amazon's mobile table device, the Kindle Fire.

[ One of Amazon's biggest challenges in 2011 was recovering from its Easter weekend service freeze in its major East Coast data center. To see how some customers avoided the fallout, see How Netflix, Zynga Beat Amazon Cloud Failure. ]

Listeners to Tuesday's earnings call were frustrated by CFO Tom Szkutak's refusal to get into any details of Kindle sales. The Kindle Fire, Amazon's Android tablet with a 7-inch color screen, went on sale in mid-November. VentureBeat's mobile technology site estimates Amazon may have sold as many as six million Fires along with its older 6-inch e-readers over the holidays. That would show it besting better-established Android tablets from Samsung and Motorola and make it second only to the Apple iPad.

Amazon's revenues grew at a healthy 35% pace for the year to $17.43 billion, but that was off some Wall Street estimates of $18.21 billion. Is Amazon subsidizing the launch of the $199 Kindle Fire? Analysts wanted to know whether it breaks even, makes money, or loses money on a sale; they left the call not knowing. The only figure CFO Tom Szkutak would release was a 177% increase, or tripling, in Kindle sales during the holiday shopping season over the previous year.

Bezos zeroed in on that development as if Amazon's future lies in part in generating digital content sales through the Kindle sales channel. "We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices," he said in a statement.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
1 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Apprentice
2/20/2012 | 8:10:50 AM
re: Amazon Grows Revenue, Keeps Cloud Numbers Hidden
It seems that the discussion of Amazon revenue and business in general when it comes to its cloud computing business is premature. The business is still in it's infancy and the shift to cloud services is growing at a fast rate. What Amazon did with book sales in the beginning, there use to be a running joke that Amazon was "wrapping a dollar around every book", they are doing now. Simply investing and growing a new business which is a world wide trend in how people "do things". Maybe the attitude of wall street towards immediate results is better hidden "inside the big box of Amazon" will serve them well. At smaller companies where investment in new cloud services (like ours in is a big deal, we are exactly the same as with Amazon. We build our business quietly, test it with strategic customers, and build a business that we can count on in the future. Otherwise, great article!
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll