All I can chalk the persistent bearishness and repeated references to valuation-related bubbles up to is a lack of appreciation for Amazon's enormous opportunity. Skeptics just do not appreciate the magnitude; in fact, many lack basic understanding of it.
As I did in the article linked earlier, I often return to a 1999 Jeff Bezos interview where the Amazon CEO expressed, in so many words, his willingness to sacrifice short-term metrics in pursuit of long-term opportunity. As long as that opportunity exists, Amazon will spend aggressively. That's essentially what Facebook executives said Wednesday, telling the crowd that as they further ramp up the business in 2013, profits take a back seat to growth.
Back in the early 2000's into the middle part of the decade, Amazon focused squarely on creating the e-commerce space and cementing it as a, if not the major player in retail. It transformed book selling while it was at it. As these spaces continue to mature, new opportunities emerge with Amazon hyper-focused on extending market share and driving revenue.
To stop spending on fulfillment centers or slow down digital efforts would cede the market share that remains up for grabs and, quite possibly, open Amazon up to a loss of control in the broad e-commerce space.Amazon, like Facebook, has no choice but to spend to further strengthen its hold. If these companies did anything but, investors should revolt. There will be a time to focus more intently on profitability, but that time simply cannot come during a period of rapid market expansion.
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