informa
/
Infrastructure as a Service
News

Amazon's Profitable Q2: Is It Bigger Than Wal-Mart?

Amazon's second-quarter earnings showed a small but unexpected profit. Some say the company is now worth more than the world's biggest brick-and-mortar retailer.

registered as a 20% gain over the previous year. With no change in the dollar they would have represented a 27% gain.

The stock surge is powered by a broad band of investors who believe Amazon is reinventing retailing on its own innovative infrastructure, and will own an increasing share of retail sales around the world. Skeptics say it's investing in too many products, as well as retail systems, and no one can succeed on as many fronts as Amazon has chosen to pursue.

It's the old debate over Bezos' leadership. Does the company know what it's doing for the long haul, or is it over-investing in future profits that will never arrive? Judging by the stock price, current investors are sticking with Bezos and his team as they keep enlarging their pool of Prime buyers, their offerings of available goods and services, and their ability to execute quick deliveries.

Says Mulpuru-Kodali: "I don't see them ever being substantially more profitable than they are now, but its shareholders haven't seemed to care. In fact, Jeff Bezos is gunning to be a $200 billion [company] and has told people that he'd rather be big with small margins than small with big margins."

"Anyone who thinks there are Google-like margins in Amazon is kidding themselves, but so long as they keep kidding themselves, Amazon will absolutely sustain its valuation," she wrote.

Editor's Choice
Cynthia Harvey, Freelance Journalist, InformationWeek
John Edwards, Technology Journalist & Author