I’m a big fan of The Week news magazine. It’s one of the last print products I still subscribe to (and I prefer the print version over the digital one). They deliver short summaries of what’s happening around the world and they’re careful to provide all sides of every story. Most of the content delivered in The Week is excerpted from other news sources.
The publishing industry doesn’t typically make it into The Week but a recent piece about Amazon from Matthew Yglesias of Slate did. Here’s how The Week reported it, including quotes directly from the Yglesias article:
Wall Street seems to believe that Amazon doesn’t need to “actually make profits as long as it increases sales volumes.” And that should terrify you if you operate in any of the businesses in which Amazon competes. All business owners fear getting undercut by a competitor, but those competitors generally can’t set prices so low that they won’t make a profit. “Amazon is totally off the leash in this regard.” Wall Street treats it like a “brand new startup that just needs to think about growth.” And that should make every Amazon competitor very afraid.
Investors would probably act differently if it weren’t for Amazon’s track record. The early years generated plenty of losses too as Amazon built the original infrastructure for delivery of physical goods. We’re now seeing the losses mounting from Amazon’s digital infrastructure buildout.
Wall Street clearly has plenty of faith in Amazon’s plans. The price-to-earnings ratio chart in Yglesias’ article provides a visual representation of strong investor confidence. Pretty impressive, particularly when compared to Apple on the same chart.