Matt Yglesias on How Amazon “Gets Away With It”

I once characterized Amazon as a “charitable institution being run by elements of the investment community for the benefit of consumers.” Bezos took issue with this in a letter to shareholders. His argument is that Amazon isn’t a charity; it’s a business—a business whose strategy is to make its customers as happy as possible. And that, fundamentally, is what makes Amazon great. Profits are in severe tension with the idea of pleasing customers—a profitable firm is, by definition, charging customers more than it needs to.

If you’re running a non-technology company or even an “old” technology company, you’re probably still picking your jaw up off the floor at the sheer amount of chutzpah today’s web CEOs have in eschewing profitability for growth.

The story of how Amazon’s Jeff Bezos “gets away with it” – and by it I mean doing $73 billion in sales last year while earning less than $300 million – dates back to the CEO’s masterful bond sale just before the dot com crash in February 2000 along with some well-timed profitable years once the magic had worn off in the mid-aught’s. Bezos grabbed capital when he could, not when he needed it, and he put up big earnings when earnings were “required”.

This strategic savvy bought him the leeway to essentially do whatever he wants now and young web companies like Twitter are paying attention.

Matt Yglesias has a new piece at Slate’s MoneyBox (perhaps one of his last?) that walks us through this phenomenon, along with the cash-hoarding and activist-repelling that have become all the rage in the Valley of late. This weekend’s must read is below:

The Prophet of No Profit (Slate)

What's been said:

Discussions found on the web
  1. w88 commented on Sep 21

    … [Trackback]

    […] Here you will find 77207 additional Info to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  2. The Natural Penguin commented on Sep 22

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  3. Energy Rates commented on Sep 23

    … [Trackback]

    […] Read More Information here on that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  4. sex dols commented on Sep 25

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  5. immediate edge commented on Oct 01

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  6. replica watches commented on Dec 17

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  7. 메이저사이트 commented on Dec 18

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  8. Harold Jahn commented on Dec 19

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  9. DevOps services commented on Jan 12

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  10. Digital transformation commented on Jan 16

    … [Trackback]

    […] Here you will find 36289 additional Info to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  11. tangerine log in commented on Jan 18

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  12. info o kasynach commented on Jan 22

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

  13. bandar77 commented on Jan 24

    … [Trackback]

    […] Here you can find 16174 additional Info on that Topic: thereformedbroker.com/2014/02/02/matt-yglesias-on-how-amazon-gets-away-with-it/ […]

Read this next.