Amazon Leader " Midas In Reverse"?--from Slate

Amazon’s Jeff Bezos Is Like King Midas in Reverse

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By Will Oremus

Actually, Amazon basically doesn't make money at all.

Photo by Joe Klamar/AFP/GettyImages

It’s become a quarterly ritual: Amazon reports that it’s losing money, and its investors cheer and hand over more. Pundits shake their heads in wonder. And Amazon’s competitors tremble in existential terror.

My colleague Matt Yglesias once half-joked that the company amounts to “a charitable organization being run by elements of the investment community for the benefit of consumers.” Bezos denied this, insisting that the interests of Amazon customers and shareholders will align in the long run. One thing nearly everyone agrees on, though: Amazon’s ridiculously low margins cannot be good for its rivals in the retail sector, who aren’t blessed with the same license from investors to lose money quarter after quarter.

I don’t have a lot to add to what Yglesias has already said about the company, except to point out that yet another quarterly earnings report shows Amazon increasing its revenue while failing (or, more accurately, refusing) to make any profit whatsoever. This time it posted $17 billion in net sales, reported a net loss of $41 million, and saw its stock leap nearly 10 percent.

What I can add is this rather mind-boggling chart from the statistics portal Statista.com, which drives home Amazon’s uncanny ability to avoid making money in the clearest form I’ve ever seen. Jeff Bezos is like King Midas in reverse: All the gold he touches turns to something else.

Illustration courtesy of Statista.com

In all seriousness, it must take incredible skill to keep spending every dollar you take in, quarter after quarter, even as your revenues grow by leaps and bounds. This past quarter, the company managed to pull it off by blowing hundreds of millions on a techno-utopian campus, continuing to lose money on its terrible investment in LivingSocial, and hiring an incredible 12,800 new employees in just three months. Its headcount now exceeds that of Microsoft.

This coming quarter will pose perhaps the company’s biggest challenge yet, as Amazon is almost sure to see its revenue leap to a new all-time high over the holidays. But I, for one, have confidence that Bezos will find a way to spend every last dime. The man is a true master of not making money.

Will Oremus is a Slate staff writer. Email him at will.oremus@slate.com or follow him on Twitter.