[crazygringo]

> So the approximate value of Amazon's IPv4 estate today is about: $4.6 Billion dollars!

> AWS will likely make anywhere between $400 Million and $1 Billion dollars a year with this new IPv4 charge!

In other words, it's not clear AWS is "making" anything at all. It might take them over 10 years to pay back the cost of what it would take to acquire them today.

Now I assume Amazon is making some level of profit on them, but the article seems to confuse income with profit. "Making" money is generally understood to mean profit, not income.

[akerl_]

The IPv4 space almost certainly did not cost them $4.6 billion to acquire. They acquired it much cheaper, and they can’t reasonably sell it because they need it for users. So charging for it when they previously did not nets them revenue they were leaving on the floor before.

[crazygringo]

The exact price doesn't matter. The point is, it's wrong to conflate profits with income. You need to subtract costs before you can declare that Amazon "makes" a particular amount of money.

You are of course correct that this gives them revenue, my point is that the article is falsely framing this entirely as profit.

[akerl_]

The costs were already paid. AWS bought that IP space over the past decade. On their financials for 2024, the cost of the IP space they already held is zero.

[jedberg]

They already own those IPs and there is no ongoing fee to keep owning them. So everything they make is profit since they costs have already been accounted for.

Like if you already owned a piece of land and let people rent houses on the land, and now you're charging them extra rent per square foot of land. You already own the land, so it's pure profit, because before you were including the cost of land in the houses. But of course the metaphor breaks down because at AWS you can move to IPv6 to avoid the cost, but you can't move the house off the land.

[crazygringo]

That is not correct.

IP addresses are intangible property and, at this scale, their cost would probably be amortized over a period of e.g. 20 years.

For accounting (and tax purposes), it's not one big up-front cost where everything that follows is pure profit.

Just because costs happen before income, it doesn't follow that all the income is profit. You have to look at things over the expected useful time frame of property.

[lotsofpulp]

> Now I'm sure Amazon is making some level of profit on them, but the article seems to confuse income with profit. "Making" money is generally understood to mean profit, not income.

Common clickbait tactic, hence avoiding the use of falsifiable terms like net income or profit.

[Elective1565]

But did they acquire them all today? (No, no they did not.)