Amazon and Margins

April 26, 2013

Amazon is making some big bets. The company is chasing Apple, Google, PayPal, and probably some other juicy giants. I read “Margin Call 2.” The article includes a nifty chart which focuses attention on Amazon’s margins. Revenue growth is super. Profits are super. So what does a finance type complain about? Margins. The key point is that tucked into the charts about Apple, Google, and Microsoft is the thought that Amazon may have to do some pencil sharpening when its comes to its margins. Cost control may be tough when trying to move into territory occupied by some fierce competitors. Will there be sufficient money for Amazon to address its what seem to be minor and “trivial” search challenges? Search can be an expensive item and cash hungry when pursued aggressively.

Stephen E Arnold, April 26, 2013

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