Amazon’s 2015 Q1: the investors like it!
I’m used to Amazon announcing their financials, making massive sales, losing money overall, and the investors being mad.
Worldwide revenues grew fifteen percent…that’s a massive amount for a company this big and this dominant. Paid unit growth grew faster (20%), which means that their growth of revenue grew more slowly than their growth of units. That doesn’t necessarily mean they were discounting more, it could mean that they were selling more units of the inexpensive stuff.
Massive sales, though? Check.
Well, they muddied the waters a bit by breaking out their Web Services (which did really well), but contrary to when people tell you that Amazon is just trying to make a profit off its customers when they do things (which, by the way, is what they should be doing, right?), they aren’t. 🙂
They loved this report!
the stock is up a remarkable 18.52% over the past five days.
Again, this is not a start-up.
Investors are starting to believe that Amazon can make the business pay off, especially the web services thing.
The consumer part of it, you and me, is certainly the public face of Amazon for most people, but they no longer live and die by it.
For those investors who are into the gadgets, I suspect that the Amazon Echo (not yet released to the public) is seen as a possible hit.
According to this
Amazon is doing a lot of hiring for people to work on
and has a whole floor dedicated to it already (in Cambridge).
Now, I should be clear: the Echo wasn’t mentioned in the call. You can read a transcript here:
and listen to the call here
In fact, the words “Kindle” and “Fire” don’t appear at all in the transcript…but “Prime” does 46 times.
That is a shift…a considerable shift from past financial calls.
“Media” appears seven times…”books” appears once, but it doesn’t mean the kind Amazon sells, and it was a caller, not Amazon that used it.
“Video”, interestingly, appears thirteen times.
My guess is that that is part of what investors liked: Amazon was not positioning itself in this call as a retailer, as an organization that sells things.
It provides services, both to business (like AWS…Amazon Web Services) and consumers (Prime).
The Echo is about that, too…it’s not just that it is a device, it’s that it may become how some people connect to the internet (particularly when spending money at home).
I’m not worried about that focus. As consumers, we get some advantage if Amazon doesn’t really need to make money on the e-books and other items it sells. That means they can have lower prices (although the Big 5 publishers have some control over that for many books, Amazon can increasingly control it for books they publish or which are independently published but use Amazon’s platform).
I’ve said it before: Amazon’s most valuable product is happy customers (outside of its business to business work, and even then, it matters).
They need to keep us happy as consumers, so we’ll trust Amazon…or at least, want to purchase things through them (not necessarily from them).
That’s good for us. 🙂
What do you think? Has Amazon actually started shifting what it does, or is it just positioning itself differently? Do you have any concerns that they’ll decrease their focus on books? Feel free to tell me and my readers what you think by commenting on this post.
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