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by diogofranco 1657 days ago
This is completely wrong, 1B is more like 1/3 of Amazon's global profits last quarter.

They might never profit enough from Italy to make up for this.
1 comments
hardwaresofton 1657 days ago
[EDIT] - Apologies, you are right -- I mistakenly wrote "profit" -- I meant to only discuss revenue. The comment has been corrected now.

Please note that I'm talking about revenue not profit ("income"). In 2020 (and 2021, which to be fair are maybe a little bit skewed) Amazon was consistently making >$90B in revenue for the quarter. Key word being revenue.

> The company also delivered its largest quarter by revenue of all time at $125.56 billion, pushing it past the symbolic $100 billion mark for the first time.[0]

Wow it's frustratingly hard to find such a simple thing as revenue for a company graphed by quarter -- ycharts is at least straight forward[1].

[0]: https://www.cnbc.com/2021/02/02/amazon-amzn-earnings-q4-2020...

[1]: https://ycharts.com/companies/AMZN/revenues

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diogofranco 1657 days ago
But revenue isn't really interesting, is it? Amazon won't pay the fine in lost revenue, it will pay it with profits.
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hardwaresofton 1656 days ago
I think it's interesting for figuring out whether this was a profitable long-term move for Amazon requires thinking about revenue rather than profit. Compared to the temporary loss due to the fine (who knows what will actually end up getting paid, how it gets paid, etc) the revenue share (that will recur) that matters more long term.

If you paid 1.3B one-time to secure yourself a revenue stream that pays out 200MM than you would have otherwise gained a quarter, you're going to make your money back in ~6 quarters. It's absolutely worth it to take the temporary hit to income (obviously better if you didn't, which they were counting on) -- in fact knowing up front it'd be worth it.

Considering only the hit to short term income makes sense only in the short term, I think -- the Italian industry that was muscled out because they didn't want to use FBA, or the italian logistics providers that weren't chosen because of the incentive to use FBA face more difficulty. Amazon is amplifying solidifying it's own revenue streams, and that effect is likely to persist past a quarter or two.

I may be mistaken but I think of it like the other non-profit making tech companies that are floating around -- unexpected losses in the service of market domination are worth the gained and/or even-more-stabilized revenue streams.

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