Wealth

Jeff Bezos keeps a 16-year-old framed magazine as a ‘reminder’ that Amazon’s most profitable service was once just a ‘risky bet’

Some people have framed diplomas. Others have framed photos of celebrities. Jeff Bezos owns a 16-year-old copy framed of Businessweek magazine.

The Amazon founder will be present on Wednesday tweetedA photo of the November 2006 magazine cover. It featured a photo taken by Bezos at 42 behind the text “Amazon’s Risky Bet.” The cover story This article was about why Wall Street executives were skeptical that Amazon Web Services, a brand new on-demand cloud computing service, would ever be successful.

Bezos, now at 58, tweeted, “I have this 2006 BusinessWeek framed to remind me.” Wall Street didn’t like AWS, which generated revenue exceeding $62 billion last fiscal year.

In 2006, Amazon was only worth a mere $10 billion, according to Businessweek – and investors and analysts were “losing confidence in Bezos’ promises.” The article criticized Bezos’s spending spree, noting that his investments into new technologies such as cloud computing had increased 52% since January 2005, while Amazon stock was down 20%.

Businessweek specifically referred to Amazon Web Services as “Bezos’ biggest bet since he and MacKenzie drove west in 1994 to search fame and fortune on-the Net.”

The cloud computing platform is well-known for revolutionizing the world of online marketplaces. It is also a major factor in Amazon’s current market capitalization, which stands at $1.08 trillion as of Friday afternoon.

According to the report, Amazon Web Services generated $62.2 billion in revenue last year. company’s annual filing. AWS’ earnings statement from earlier this year showed that the platform was largely responsible for Amazon’s profitability so far in 2022. AWS earned $6.52 billion operating incomeDuring Q1 2022, Amazon’s total operating income of approximately $3.7 billion was far more than Amazon’s.

Businessweek’s analysis was not entirely incorrect. Amazon has been known over the years for placing large bets in new technologies and using the profits from those successes to subsidize its failures.

Amazon lost $170 million in 2014 on unsold Firephones. The company also closed 87 pop up stores and stopped its restaurant delivery service. Dash Buttons, which were one-click buttons that could be mounted around homes to allow frequent reorders of products, was discontinued by the company last year.

The failures don’t seem to phase Bezos, who often says that risks – and defeats – are the price of admission to success.

“We need big failures if we’re going to move the needle — billion-dollar scale failures,” Bezos said at Amazon’s re:Mars conference in 2019. “And if they’re not, then we’re not swinging enough hard enough.”

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Source: CNBC

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