Cost of sales was $16.14 billion, or 75.9% of revenue, compared with 79.3%. Fulfillment, marketing, technology and content in G&A combined was $4.45 billion, or 20.9% of sales, up approximately 293 basis points year-over-year. Fulfillment was $2.2 billion, or 10.3% of revenue compared with 9.3%. Tech and content was $1.22 billion, or 5.7% of revenue, compared with 4.5%. Marketing was $833 million, or 3.9% of revenue compared with 3.3%.We can argue all day about Amazon's strategy - you know I'm ultra-bullish on it -- but it's tough to make the case that Amazon could not, pretty much at will, stop Netflix in its tracks. Jeff Bezos has started a mini-bidding war on content. If he decides to kick things into high gear (you know, take a billion or so from fulfillment and put it towards content), it's lights out for Netflix. If another player in the space -- one with firepower -- gets serious about buying content, Netflix will likely struggle to stay in business. Two key thoughts: One, I know what you're thinking. Will Amazon buy Netflix? Based on everything I have said in this article, I'm not sure why it would. All Amazon would be doing is taking on billions in debt -- just a trashed balance sheet -- when all it needs to do is outbid Netflix for content that, for the most part, isn't exclusively licensed anyway.
Consider what Netflix is up against. At the beginning of 2012, the company had about $508 million in cash and cash equivalents. At the end of 2013, it was down to just over $290 million. As I explain in the article I link to in the second paragraph of this piece, we're seeing a repeat of late 2011. Netflix is taking out more debt to beef up its weak cash pile. Therefore, it will likely have something closer to $700 million by the end of Q1 or Q2. Meantime, Amazon started 2012 with just under $5.3 billion in cash and cash equivalents. It ended the year just shy of $8.1 billion. You can get these numbers from each company's annual report filed last week at the Securities and Exchange Commission Website. On the surface, it appears that both companies run the same type of offense. They're aggressively spending to seize the massive long-term opportunities that lie ahead. But, make no mistake, Amazon is nothing like Netflix. Their cash and spend situations are quite different. Clearly, the competitive landscapes are as well. And, in terms of revenue, annually we're looking at a roughly $55 billion difference between the two companies. If you look at how Amazon spends its money, you'll see there's flexibility at the moment and much more so on the horizon. From the company's Q4 2012 earnings call last week: