The Amazon (NASDAQ:AMZN) Fall


This year as a whole hasn’t been very impressive for Amazon (NASDAQ:AMZN). The company sales have seen a periodic drop, due to consumer shift in preferences and due to the recent recession. To make the situation even worse, on Thursday; Amazon (NASDAQ:AMZN) reported a massive loss of $544 million due to operations for its third quarter. According to CEO Jeff Bezos, the company is working on a new strategy of sacrificing profits in the name of growth. Many have started wondering if that really is the case and how long will it be till the shareholders flip. The continuous string of losses will eventually take its toll on the years success Amazon (NASDAQ:AMZN) Web Services have produced.

Critics have started pointing fingers at Amazon (NASDAQ:AMZN) saying that for a two year old company, its much easy to get away with hefty quarterly losses as the company is still growing and hence the growth potentials seem bright. But when it comes to older players in the game, this strategy is just hard to sell. Similar is the case with Amazon (NASDAQ:AMZN) that turned 20 this year.

On Friday, Amazon (NASDAQ:AMZN) shares fell 8.3 percent from $313.18 a day before, to $287.06. This is a serious matter for those who are dependent on the Amazon (NASDAQ:AMZN) coin. AWS for example stands first in line among these companies. It sees its competitors like Microsoft (NASDAQ:MSLF) Azure and Google (NASDAQ:GOOGL) Cloud seem to be well ahead of competition as they are supported by companies that have a lot of capital to invest.

According to AWS partners, Amazon (NASDAQ:AMZN)’s position will eventually effect AWS and other mobile devices tied to Amazon (NASDAQ:AMZN). Its introduction into the cloud will require time and effort and most probably tossing aside high cost investments for the time being like the phone. Only then it might stand a chance to produce something in the cloud infrastructure that would seem desirable for tech giants to want to invest in.

AWS executives have started wondering how long it will be when the company starts to deliver on a macro level. Last year, Amazon (NASDAQ:AMZN) played its cards by enforcing AWS to believe that it will become Amazon (NASDAQ:AMZN)’s largest business to date. But this year, AWS might not give in to this claim that easily.

Former Microsoft (NASDAQ:MSLF) CEO Steve Ballmer, made a public statement this year that a business, at some point needs to deliver its promises and start making profits. He went on to show his likeness for Amazon (NASDAQ:AMZN) but he believes that in business, likeness isn’t good enough when the company makes no money. To him it made more sense if the company under discussion was fairly new to the business. But Amazon (NASDAQ:AMZN) is 20 years old and it shouldn’t have such issues. The company’s market cap is of $150 billion and the company doesn’t even make $15 billion pre-tax.

AWS on the other hand, continue to show bright progress with sales increasing and promising growth aspects.