Facebook books a four-bagger of expenses
Young Mr. Mark Zuckerberg, during the same 2012 period, saw his company grow revenues by a Google-esque roughly 37.1%, to $5.1 billion. But net income -- you know, the money left after you're done spending what's needed to make that net income -- could not keep up the information age party. It collapsed from an even $1 billion in 2011 to just $53 million. That's something like 94% drop. The culprit? Operating expenses that exploded by 132% for the year.

Investors -- at least for awhile; one never knows with this stock -- again overlooked these issues, mostly due to improved subscriber numbers and better-than-expected mobile ad rates. And Facebook stock saw fresh life.

"In 2012, we connected over a billion people and became a mobile company," was Zuckerberg's investor cheerleading line.

Amazon's $60 billion expense line
Things get frankly bizarre when we bake in Amazon's 2012 annual income statement performance to the narrative. I realize Amazon is an "Internet retailer" that sells and ships things. And some argue it's ridiculous to compare it to Facebook and Google, which sell "Internet advertising and services." You make the call.

No question, there was a Google and Facebook-like jump in net sales: 27.1% jump, to $61.1 billion for 2012. But here's the thing: Bottom line net income was not merely Facebook ugly; with Amazon it was not there at all. Apparently, Jeff Bezos has decided it's not scary enough to spend $47.2 billion out of the $48.1 billion he made in 2011 to wind up with just $631 million in net income for 2011.

Oh no. In 2012 he had to spend $60.4 billion to lose(!) $39 million. A nonprofit foundation -- which is basically what this company is now -- would lose its tax-free status with such performance.

But Amazon.org is not phased. "We're now seeing the transition we've been expecting," was Bezos' cryptic advice for investors.

The no-margin Web
No big data algo or highly paid analyst is needed. We can all do the math ourselves: Between the three, investors are looking at about $436 billion in market cap, or about the GDP of Argentina, every last dollar of which is under pressure from expenses raising faster than sales.

Rally or not, Internet or not, Information Age or not, in the context of history, to me this is not sustainable.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

If you liked this article you might like

L.A. Times Tops 100,000 in Digital Subscriptions

10 States Where the Wealthiest Executives Call Home

Strange Days at Apple

Toys 'R' Us Store Employees Set for Higher Wages Despite Bankruptcy

Wall Street Deflates in Pullback After Fed Excitement, No Records for Dow