Amazon Web Service: Amazon makes even more profits with this secret weapon

N After Facebook narrowly missed badysts' instructions Wednesday with its quarterly numbers and had to pay with a price loss of more than 20%, Amazon put the numbers on Thursday. The mail order company also slightly missed expectations of revenue growth: the company achieved a $ 52.9 billion business turnover in the second quarter. Analysts were expecting 53.4 billion.

But this time investors reacted differently: Amazon's stock price soared to four percent Friday, Seattle's Internet retailer reached 1630 euros a share, a new historical record. With a market value of 765 billion euros, Amazon is currently only overtaken by Apple. Microsoft and Google's parent company, Alphabet, have already left Amazon behind.

Investors reacted enthusiastically as Amazon announced a higher-than-expected quarterly profit: The Seattle-based company earned $ 2.5 billion between early April and late June. more than in the same quarter last year. For the 13th time in a row, the boss and founder Jeff Bezos can post a profit on the stock market

Huge profit in the server business

Amazon owes its quarterly profit high to a division that was once a waste of money. Internal server administration: Bezos The secret weapon is "Amazon Web Services" (AWS). The cloud business has helped increase sales by 49% from one year to the next and now brings in more than $ 6.1 billion in revenue per quarter, of which nearly 27 % are profits.

Amazon has built an extremely profitable second step with AWS since its inception in 2006, which can boast much more room than online commerce or similar business with digital media

Only one other division of the group is growing even faster than AWS: Under the simple keyword "Other Revenue", Amazon is hiding its growing business through online advertising on its own websites. More than 130% of the advertising business turnover compared with the previous year – 2.2 billion US dollars, the group takes

Additional revenue in the trade

The two divisions additional would not exist without the core business – advertising only works because the trading platform is so successful. AWS also exists only because the group has already acquired its expertise in running its own data centers and has rented early in 2006 a surplus server capacity. But currently, both divisions are so successful that Bezos can reinvest the profits of its additional business in the development of the main business.

"I think it's almost impossible to evaluate Amazon by segment," comments online researcher Gerrit Heinemann from the university. Lower Rhine. "Basically, Amazon is a data society whose divisions are mutually dependent."

In the international online trade Amazon has – unlike the US domestic market – never reported a profit. During the last quarter, the Group recorded a negative margin of -3.4%, compared to -6.3% a year ago. Growth is still much more important for Amazon than for profit, so the international trade division may be in the red

Bezos only needs to change counters

Heinemann is convinced: If Jeff Bezos wanted to make a profit he would only have to return some switches. "But Bezos has internalized: growth is only possible with mbadive investments.The profit must be behind."

With the once insignificant test balls money, Amazon can consolidate its international dominance in the main business of online trading in the medium term. The group earns money from business units that only account for a portion of the costs of competition in the profit and loss account.

He rents spaces on servers and in his department stores, sells shipping and handling services to his online competitors advertising budgets. Even the big online competitors like the German online clothing retailer Zalando are now supporting the AWS server services.

The thing with Amazon Prime

Behind the red numbers in international online trading is another tip from Jeff Bezos Heinemann: "With its underwriting offer, Amazon Prime Bezos is exploiting an innovative form of mixed costs." The group has recorded $ 3.43 billion in the last quarter thanks to Prime customers – for video and music streaming and free shipping, but pay up to $ 120 a year depending on your home market.

"Thanks to this income, Amazon can set prices and lower shipping costs for key customers, who then like to forget when they make a decision to purchase that they have already advanced annual fees. "The business turnover of the AWS data center business and advertising allows Bezo to invest in the future, which no other group in the world can afford: more than 7% of its sales have been invested, "said Heinemann, the 2017 group in research and development. development, if Amazon has, according to a study by the accounting firm PwC the largest research budget in the world ever.