How Amazon Booked 'Air' Last Quarter

A big issue (here and elsewhere) when Amazon.com (AMZN Quote) reported its first-quarter rev last month was the legitimacy of so-called advertising revenue from a series of recent marketing deals with upstart companies like Ashford.com (ASFD Quote) that aren't making a dime. But Wall Street cheered the creation of the so-called Amazon Commerce Network as (in the words of one analyst at the time) a "high-margin revenue stream." Others credited the "advertising" revenue, as it was also called, from these deals as an important factor in the surprising strength of Amazon's gross margin.

And some of it was. But not most of it. ...