Up The Amazon Without A Profit

Amazon has just posted some eyewateringly bad results, adding yet more heavy losses onto their shareholders. And this is despite their alleged price gouging and tax avoidance.

Essentially, Amazon is an indulgent money pit for Jeff Bezos' ego and, unlike the other leading dot com survivors, it has failed to reward those who have patiently backed it for nearly two decades.

In the meantime, the company has fostered many good things, such as a long tail of specialist retailers a pioneering cloud infrastructure, and has had  a particular effect on British retailers, as the woes of that industry show (The effect is probably greater in bottom line terms than the challenge of the German discounters).

But it is investments in areas like cloud computing, content services and devices like the Kindle and Fire which I suspect are the hidden sinkholes (as Google had to admit this week as it fell short of targets).

The race to the bottom in cloud computing must be painful, and as more and more experienced players park their tanks on Amazon's lawn, you have to wonder how long the patience of their shareholders will hold out.

But the real issue, I believe, is that Amazon does not know what business it is in. Is it a retailer ? A logistics company ? A content or entertainment company, or is it a technology company ? Is it selling picks and shovels, or digging for gold?

The company needs a good strategic review.