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Comment by passwordoops | Hacker News Reader

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passwordoops·

This is what jumped out at me:

"The company pulls in more than a billion dollars a quarter in revenue but still operates at a loss"

I'm at a loss for words

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These companies operate at a loss in order to invest in growth for future profits.

Not saying it will work out but amazon famously was unprofitable for the longest only because it kept investing back into itself for growth

They weren’t operating at a loss though, right? I thought the profits of Amazon were basically negligible, as profits were getting reinvested. I read that as different than operating at a loss, which would imply their costs exceed their revenue.

I'm not sure about Amazon, but I know Uber was the more recent poster-child for the "operate at a massive loss to win market share then Jack up prices later when customers are locked in" strategy to keep the funding going.

I don't see that strategy working again for a long time

Amazon for sure did this with ebooks, but I don’t think the overall business was operating at a loss. All those profits were used to build out new areas of the business, like AWS.

There was _brief_ periods of loss, but only when they had a lot of cash on hand... they were putting in basically all their profit back into the business.

https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in...

That's a completely different strategy to investing money the company doesn't have that will (eventually) require additional outside capital/funding rounds.

Sounds like they're getting closer to profitability.

It’s a decision, they could become profitable yesterday, but what about tomorrow? They are betting for a bigger payday later.

The reality is probably that they're distributing enormous bonuses to higher ups. Why care about the profitability, when you're getting paid anyways?

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