[jnbiche]

Amazon makes almost 50% of their annual revenue from online retail. Many billions of dollars. It's by far their biggest product category.

Yes, through accounting magic, they're making the majority of their profits via AWS, but that's part of Bezos's long-term strategy and could be changed on a dime (at the potential expense of the long-term growth he's targeting).

Top line, most of their business is from online retail, not AWS.

(edited because my original was a bit of a flame, and didn't clarify profit vs revenue distinction)

[doingmyting]

Amazon makes substantially more from AWS than its retail segment. Retail revenue is higher but revenue does not equal profit. For instance last quarter AWS revenue was 13% compares to retail but it contributed 52% of operating income.

[kolmogorov]

Those are accounting tricks

[lmm]

Citation needed. It seems pretty common-sense that retail would be lower-margin than digital services.

[m0zg]

Revenue doesn't matter. Profit does. Most of their profit is from AWS.

[User23]

To Amazon future free cash flows are what matters, as pretty much every Bezos shareholder letter ever has explicitly said.

Edit: When I read his letter in 2004 I went long and I've never looked back. https://www.sec.gov/Archives/edgar/data/1018724/000119312505...

[robocat]

Division profits are mostly an accounting ghost.

Tomorrow they could decide to use the AWS profits for growth, and reduce the growth spending on Amazon by the same amount, and suddenly the sense of your sentence is reversed.

[m0zg]

> Division profits are mostly an accounting ghost.

Shareholders seem to think otherwise.

[robocat]

AMZN is well known for paying out its profits to shareholders?

I think what shareholders value is a little deeper than woo “AWS appears profitable”!

[m0zg]

If AWS wasn't profitable, AMZN would not be able to grow, and its share price would immediately fly off a cliff. But you know this already. You just want to argue.

[jnbiche]

> If AWS wasn't profitable, AMZN would not be able to grow

Amazon wasn't even profitable until 10 years after its founding. So that's demonstrably incorrect.

BTW, the thesis that "if a business isn't profitable, it wouldn't be able to grow" flies in the face of hundreds of successful venture capital businesses funded by the yCombinator (founder of Hacker News) and many other venture capitals funds. Profitability is one variable in a very complex mix.

I personally like the idea of bootstrapping, which does require profitability, but that's not the only way to successfully grow a business. You can also grow a business using debt, or by using equity.