Amazon's Less Is More

Nor are profit margins as high in Web services as they could have been in the company's more technologically bold moves. But Bezos is fine with that, since it plays to Amazon's strengths. "I always think high-volume, low-margin businesses are more defensive," he said at Web 2.0. "We are good at it, we know how to do it, and we think it can be a meaningful and financially attractive business one day," he said of the new platform.

Selling its unused capacity also marks a renewed focus on containing costs -- another item on Wall Street's long-standing wish list for the company. "Our biggest cost is not power or servers or people. It's lack of utilization. It dominates all other costs," Bezos said.

The move is especially shrewd because it allows Amazon to offset costs in a way that doesn't interfere with top-line revenue growth. And Amazon's 20% yearly revenue increase is the key to its growth story -- and a rare justification of why it is able to command a multiple of 56 times forward earnings, the richest even in the Internet sector.

Cutting costs by scaling back the deep discounts it offers consumers, for example, would get in the way of growing revenue. But renting out technology it already paid for when it isn't using it allows the company to help its bottom line while not hurting growth.