This morning Jeff Bezos beat his nemesis from the same town Bill Gates as the richest man on the planet with his worth exceeding $90B. This was due to a huge surge in Amazon’s stock price (over $128 rise) to $1100 plus today. Their 3Q results came out yesterday and Amazon grew its revenue by 34% and profits inched up as well. There were fears that heavy investments in new warehouses and hiring workers would push it to a loss. This year Amazon’s stock started at $750. What a run!
Here are the numbers. Revenue soared 34% to a record $43.74B, a first for a non-holiday period, as the internet retail giant spread its ambitions with the acquisition of Whole Foods Market Inc. and widened its lead in cloud computing. Profit increased 1.6% to $256M, despite the costs bulging by 35%, a five-year high. I was surprised to know that Amazon employs 541,900 people, an increase from last quarter’s 382,400. Roughly 87,000 employees were added from Whole Foods. Now Amazon commands some 43.5% of e-commerce sales this year, compared with 38.1% last year.
I remember during the dot.com crash, everyone wrote off Amazon. When they ridiculed Bezos for a no-profit company with a bleak future, he jokingly replied, ” I spell profit as ‘prophet'”. He has come a long way with his prophetic vision and masterful execution.
The best addition to Amazon’s two core businesses (books and e-commerce) was the introduction of AWS as the cloud computing infrastructure back in 2004. First came S3 (simple shared storage) when Bezos convinced start-up companies to rent storage at one-hundredth of the cost of buying from big vendors. Then EC2 (Elastic Computing Cloud) was added and that took off in a big way, especially with capital-starved startups with unpredictable computing needs. Pretty soon, Amazon took the credit of being the ‘father of cloud computing’ beating big incumbents like IBM, HP, etc. Now AWS is a huge business growing fast and bringing in about $16B revenue with over 60% profit. AWS is making a difference to the bottom line. Microsoft is trying hard to catch up with its Azure cloud and so is Google with its GCE (Google Computing Cloud). Today’s AWS is a very rich stack with its own database as a service (Redshift, Dynamo, and Aurora), elastic Map-Reduce, serverless offering with Lambda, and much more.There are predictions that AWS could one day be the biggest business for Amazon.
While the pacific north-west remains to be the home of the richest man on earth, the title shifts to Bezos from Gates.