back to article SHOW ME THE MONEY! Ballmer on Amazon: 'They're not a real biz, they make NO cash'

Ex-Microsoft boss Steve Ballmer has attacked retail giant Amazon for failing to make a profit after more than two decades of trading its wares online. "They make no money, Charlie. In my world, you're not a real business until you make some money. I have a hard time with businesses that don't make money at some point," Big …

  1. Thomas Wolf

    Can't believe that I agree with Balmer

    ...but I absolutely agree with him on Amazon. Growth rate can't be the only measure by which a business is measured - yet that is exactly what investors seem to be doing year in and year out. Even now, after the recent decline, AMZN has a ridiculous valuation for a business that, after 20 years, still isn't making any money. I'm beginning to doubt there are any real investors left in the stock - it's probably being traded purely on speculation at this point. Unless there are "multi-generational" investors out there who are betting on AMZN eventually making it big and their heirs reaping the rewards.

    Think about it - what is AMZN's end game? Dominate all e-commerce? Perhaps even all commerce overall? If either is their goal, that is a very long slog - a journey that, if the last 20 years are any indicator, will include very few profits.

    The author was wowed by their $20b in sales - but, heck, AAPL makes that in less than a quarter! Come to think of it, AAPL probably made more profit in its last quarter than AMZN made in its entire existence! Yes, it's growth rate (albeit without profits) are a bit higher than AAPL, but look at the respective stock valuation! AAPL's price to earnings ratio is about 16 - AMZN trades at whopping 700! How is that remotely justified, given that they can't even profit on $20b in business?

    1. Anonymous Coward
      Anonymous Coward

      Re: Can't believe that I agree with Balmer

      But Mr Balmer also thinks that Apple is crap

      Oh wait, That is what we are supposed to think on this 'We all hate Apple' site.

      1. Cipher

        Re: Can't believe that I agree with Balmer

        AC wrote " But Mr Balmer also thinks that Apple is crap"

        He didn't say he agreed with *everything* Balmer sez...

      2. Alex Rose

        Re: Can't believe that I agree with Balmer

        "But Mr Balmer also thinks that Apple is crap

        Oh wait, That is what we are supposed to think on this 'We all hate Apple' site."

        We're an equal opportunity site - we hate everyone. For instance, I hate you.

        1. Michael Habel Silver badge

          Re: Can't believe that I agree with Balmer

          "But Mr Balmer also thinks that Apple is crap

          Oh wait, That is what we are supposed to think on this 'We all hate Apple' site."

          We're an equal opportunity site - we hate everyone. For instance, I hate you.

          Woo you best slow down there mate that kinda chatter could land you up to Two Years at Her Majesties pleasure if your not careful...

          Speaking of that delightful topic. Would the Register be just as liable for not moderating this Board?

          1. Anonymous Coward
            Anonymous Coward

            Re: Can't believe that I agree with Balmer

            "Speaking of that delightful topic. Would the Register be just as liable for not moderating this Board?"

            Quite the opposite, having editorial control makes you more liable for the content posted, not less. It's actually better to have an unmoderated board and respond to take downs as and when, although it's a very grey area indeed.

      3. JustNiz

        Re: Can't believe that I agree with Balmer

        but does he really STILL say Apple are crap?

        Sure he would have had to deny that anythnig good ever came out of anywhere but Microsoft when he was CEO of it, but if he's still actually saying that now, I'm amazed at how someone so genuinely clueless could have ever got where he is/was.

    2. Destroy All Monsters Silver badge

      Re: Can't believe that I agree with Balmer

      Yeah but SO WHAT?

      I don't see a shareholder revolt and demands to CASH OUT DIVIDENDS OR ELSE. So pumping everything into EC2 buildup or god-knows-what else .. why not? Shareholders are probably okay with this because they are not "buy and hold" or "need the money now for my retirement home" types but trader types with bubble-fueled rabies.

      The only thing that one can conclude from Ballmer's bragging is that under his watch, Amazon would still only be selling books, but might have "made lots of money". Or not.

      If Microsoft had any serious competitor (evidently not Apple) Ballmer would sing from another sheet entirely anyway.

      1. Peter2 Silver badge

        Re: Can't believe that I agree with Balmer

        Is the issue that Amazon isin't making a profit, or is the issue that it isn't declaring a profit and paying the tax on it through creating accounting?

        1. Destroy All Monsters Silver badge

          Re: Can't believe that I agree with Balmer

          There is no issue.

          > creating accounting

          Learn2english before attempting to work on the deep pseudo-logic of the tax code, created by psychotics and understandable by autists only.

          Of course amazon pays taxes by sole fact that it gives its employees money that they have to hand to the friendly state on as "income tax", so there is that.

          Oh, and ... hey Ballmer you stupid arsehole? Your shitty Exchange Online happens to be down currently, even though your status page says otherwise. Yeah, QUALITY MS PRODUCTS.

          1. Pigeon


            Priceloose. Me upvote u

          2. Anonymous Coward


            "Learn2english before attempting to work on the deep...."

            "Of course amazon pays taxes..."

            Just to think, my 6 year old is learning about proper nouns.

        2. Alan Brown Silver badge

          Re: Can't believe that I agree with Balmer

          The issue is that a company's share valuation is supposed to be based on its expected annual dividend payouts and that simply isn't happening with Amazon.

          Ballmer's a heckuva hypocrite though: MS share price followed similiar paths despite it it not making dividend payouts until the company was well over 20 years old.

          Shares are a loan to the company at whatever price they were originally sold for and dividends are effectively loan interest payments.

          When speculators step in and share value increases at a rate in excess of the deferred dividend payout, then you have a bubble forming - and it's best to keep in mind that no matter what a share might be valued at today, it can be worthless tomorrow. They are a high risk "investment" which only have any value if and when you sell them.

          1. Tapeador

            Re: Can't believe that I agree with Balmer

            "Shares are a loan to the company at whatever price they were originally sold for and dividends are effectively loan interest payments."

            Actually ordinary shares are merely a right to the residue following liquidation and sale of all of a company's assets. Some might have divident rights.

          2. T. F. M. Reader Silver badge

            Re: Can't believe that I agree with Balmer

            @Alan Brown: "a company's share valuation is supposed to be based on its expected annual dividend payouts"

            So how will you price shares in a company that does not pay dividends? Are you saying they are worthless?

            Actually, when a company pays a dividend its stock price drops by the amount of dividend (per share) paid. This should be obvious if you consider buying a share just before or just after a (certain - announced, etc.) dividend payment.

            The actual share valuation is supposed to be based on one's estimate of the company's value (assets, projected income, etc): price=(value-debt)/#shares. Obviously, if the company has cash assets that's a part of the value. If some of the cash is paid out as dividends then the company value drops by that amount, and so does the share price. If the company announces a dividend or issues a statement that no dividends will be paid next year that does not change the company's value or share price. Your decision to buy shares should be based on your expectation that the company's value will increase in the future (it may, instead, be based on your expectation that in the future idiots will value the company higher than you do, but that's another topic).

    3. roger stillick

      Re: Can't believe that I agree with Balmer, pt.2 there is no end game...

      Thomas Wolf= There is no End Game for AMZN... in the Japanese Business mindset, a business can go on forever as long as it continues to established in the 16th and 17th century are still thriving in Japan, even after being totally defeated in WW2...Jeff's AMZN is a newcomer in this never ending game and he looks like he can be winning long time...RS.

    4. Anonymous Coward
      Anonymous Coward

      Re: Can't believe that I agree with Balmer

      I would assume the idea of growth is, at some point to turn that around into massive profits. It's a big gamble, as other companies have no doubt collapsed under their own weight.

    5. Richard Boyce
      Thumb Down

      Entertainment and Devices

      By this standard, the Entertainment and Devices division is not a successful business. Far from it. Current Xbox sales are not profitable enough to pay back all the previous losses on Xbox. Now Surface is repeating the same pattern.

      1. Anonymous Coward
        Anonymous Coward

        Re: Entertainment and Devices

        "Current Xbox sales are not profitable enough to pay back all the previous losses on Xbox.

        The Xbox division has been consistently making a profit since 2008. The Xbox One is also already profitable.

        "Now Surface is repeating the same pattern."

        Surface sold $900 million last quarter and is already profitable:

        1. oldcoder

          Re: Entertainment and Devices

          "Current Xbox sales".... has only barely broken even over the long term.

          "Surface sold"... So they just barely covered the losses from just ONE year. And according to other sites, did that by not even selling one million units. At $1000 US each, that still isn't covering expenses. The key to making profit is to have the sell price greater than the manufacturing cost... And Surface still isn't quite that.

  2. Dan 55 Silver badge

    Then again it also takes a certain mindset to plough absolutely everything back into the business. Not everything has to be short term but some kind of return after 21 years would be nice for the people who have invested in them.

    1. Turtle

      @Dan 55

      "Then again it also takes a certain mindset to plough absolutely everything back into the business."

      Don't discount the money he gets in salary, expense accounts, stock options, and other assorted benefits. They are not negligible. Amazon as a corporation might not be making a profit but don't think that Bezos is anything other than very well compensated.

      1. Alan Brown Silver badge

        Re: @Dan 55

        "Amazon as a corporation might not be making a profit but don't think that Bezos is anything other than very well compensated."

        Bezos' pay packet doesn't benefit the shareholders, unless he _is_ the shareholders.

        It's extremely easy to characterise Amazon as heavily overgeared and hyped, as they appear to be holding high levels of debt - and a lot of competitors with similar business models have failed in the last 20 years.

        It would be interesting to see how many conservative pension funds have holdings (those funds typically rely on dividend payouts rather than on share trading)

  3. busycoder99

    This bears repeating here:

    1. Destroy All Monsters Silver badge
      Paris Hilton

      Re: This bears repeating here:

      Someone who hates paying taxes? MUH EGILATARIANISM! MUH "YOU DIDN'T BUILD THAT" socialist bullshit.

    2. Anonymous Coward
      Anonymous Coward

      Re: This bears repeating here:

      That's just an apologist excuse for Amazon's lack of profit. If this was such a great strategy every company would do it, because no one wants to pay taxes if they can help it. That's why Apple, Google and everyone else has that complex "double Irish" overseas tax strategy, why they leave money overseas instead of bringing it back to the US, etc.

      If simply "investing everything back into the business" was a viable strategy, everyone from Apple to Exxon would be doing it - but they can't, because they make vast piles of money Bezos can only dream of and there's no conceivable way they could reinvest it all and avoid showing taxable income unless Apple started drilling for oil and entering every other business every company in the Dow 30 is in, and Exxon did the same along with designing their own smartphones and tablets.

      What is the end game for shareholders? If I told you, "hey invest $100K in my new restaurant and you'll own 20% of it" but I always reinvested every penny back into the business so your 20% never provided you a penny of income, would you think you made a great investment? Maybe if you could find someone willing to pay you more than $100K for that 20%, but they might want to be assured they'll get some return from it, other than having to find someone willing to pay them even more.

      At some point a business must make a profit for investment in it to be worthwhile, but now the apologists seem to have a way that can permanently excuse Amazon from ever making money. Forgive me if I inform you that investing in a company that will NEVER pay out dividends is a terrible idea. Well, it isn't a terrible idea, it is known as charity, but at least with charity you get a tax deduction and a warm fuzzy feeling for having helped out.

  4. William Donelson

    How Ballmer completely wrecked Microsoft:

  5. Andy Roid McUser

    Ignore anything Ballmer says

    "$500, fully subsidized, with a plan! That is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard, which makes it not a very good email machine." - Steve Ballmer 2007

  6. Franklin

    "I'm proud of the fact that I made $250bn under my watch as CEO," says Ballmer, neglecting to add that under someone--anyone--else as CEO, Microsoft might have made rather a lot more.

    1. Anonymous Coward
      Anonymous Coward

      What did they say about George W Bush?

      Born with a silver foot in his mouth? Ballmer bragging about making $250 billion as CEO is like a billionaire bragging about making millions a year - he could do that if he put it all in a savings account making 0.25% a year.

  7. PhillW

    As per busycoder99:

    If you make no profits, you pay no taxes. They will just shuffle money around so that Jeff Bozo does not need to pay tax...... so the rest of us buy him another luxury jet and get to 'tut, tut' over how much more austerity we have to endure........ Do any of you lot still buy from Amacon? I gave them up for xmas 3 years back, and I've not missed them in the slightest.

    1. Destroy All Monsters Silver badge

      > how much more austerity we have to endure

      Are you enduring "austeriy" (sic)?

      1) Your spelling SUCKS

      2) You may notice that taxes are going UP, salaries in the state sector are going UP, and debt INCREASES (and thus the value of money DECREASES). How is that "austerity"? It's called "letting everything hang out because no-one gives a fuck anymore".

      3) If the US state stole all of Amazon in a single go, it could pay back about 0.5% of the national debt (more like 0.04% once leftists' discounting of outstanding social promises is undiscounted). You think that's going to pay your pension and healtcare? Think again.

      1. Anonymous Coward
        Anonymous Coward

        Destroy All Monsters, you really don't like spelling mistakes?

        We are all human. We all err. You can attack spellings all day long. Not being perfect is part of human nature.

        Are you able to see past that? To engage people with their opinions, thoughts and experiences? Perhaps even learn from them, or ask them how they are going to develop and improve?

        Anyone can knock down a house, but it takes effort and skill to build one. Anyone can burn down a town, but it takes organisation and thought to feed one. Anyone can point to a fault in another person, can you point to their successes?

      2. Anonymous Coward

        DestroyAllmonsters criticizing spelling and grammar is similar to a pot calling that kettle over there, black.

  8. Anonymous Coward
    Anonymous Coward

    He has a point...

    .. no fan of Ballmer, but I'd rather trust my business to someone who I know should be there in 2/3/5 years time.

    Amazon don't have enough cash to battle vs Google or MS in the IaaS play, which is where most companies start. I'm not sure they can transition from IaaS revenues to PaaS/XaaS quickly enough to enrich their margins.

    Be wary of any company that does not declare details in significant lines of business IF you are going to trust your company assets with them.

  9. Mr Miser

    sounds like a snippet of a speech from an Ayn Rand book

  10. Randall Shimizu

    I am wondering if Jeff Bezo's will simply decide to cash out and retire while the stock is still high.

  11. roger stillick

    Show Me the Money...There is No Money...

    Years ago the Wife n i attended a US Gov SBA (small business administration) seminar on getting your DBA, going into business and understanding 'Yes, i Can be Sued'...SBA 504 loans, Non-Profit filings, and how to show a profit to qualify for a loan, or a Corporation Startup...and buy needed stuff.

    Something uniquely American showed up right away... almost 100 percent of the seminar attendees admitted they had never shown much profit and rarely, if ever paid actual income taxes (The USA has NO VAT)...Everyone operated above the line of being declared a hobby by making USD $1.00 at least once in a 3 yr period...per the SBA= 'even GE (General Electric) does this'...

    So the Seminar was really about how to rearrange your money to show enough profit to qualify for a SBA 504 loan if wanted or how to satisfy a group of investors if you want to go public...and the way to get taxed profit converted into needed tools, vehicles, and plant (tax money can be leagally rearranged / allocated for untaxed stuff needed to make the business work) or don't build your basement sauna from company funds...but a nice 1 ton diesel crew cab PU w/ company logo on the doors is ok to sit in your home driveway if you do callouts off hours...Nothing i have commented on is illegal here in 2014 USA...

    Enter Amazon as a USA stock market item... suprisingly Jeff Bezos does way better than GE so it is a better rated stock than GE (an old school Blue Chip stock).

    IMHO= sorry folks elsewhere, Amazon is simply amazing and Jeff has a winner (he used to be a NY stock market GURU)... nothing has changed, his business plan is golden...RS.

  12. Rule of Thumb

    Anyone care to explain Ballmer's math?

    >if you're worth $150bn, eventually somebody thinks you're gonna make $15bn pre-tax and they make about zero

    Can anyone expand on what Ballmer is saying here? By "make pre-tax" I guess he means profit, because their quarterly revenue was < $20BIL. Why should market cap. equal ten times some profit?

    1. roger stillick

      Re: Anyone care to explain Ballmer's math? look at GE...

      R O T= look at GE, they and everyone else that is not grooming a company for sell off does this...Pre tax is close to zero...

      IMHO= they just don't brag about it as it would scare their investors...RS.

      1. Steve Todd Silver badge

        Re: Anyone care to explain Ballmer's math? look at GE...

        I don't know what you think you know about GE, but they reported a profit last quarter of $3.6bn (up 6% year on year) and are running with a PE of a little less than 20. They may pull accounting tricks to minimise taxation, but they need profits to pay dividends, and all of the Dow Jones members pay a dividend (GE giving the third highest yield in the index).

        1. roger stillick

          Re: Anyone care to explain Ballmer's math? look at

          Steve Todd= according to Forbs they still pay little or no taxes due to creative accounting...

          Most of the profit went to 'projects' (just a little different way of reinvestment, or, they were political contributions, who knows ??)...RS.

          1. Steve Todd Silver badge

            Re: Anyone care to explain Ballmer's math? look at

            Your problem would appear to be in believing Forbes, who don't seem to be able to read a balance sheet. Last year they only paid $600+m in income tax as they took a write-off on operations they closed down. The year before it was $2.5bn.

  13. hardboiledphil

    In my mind there's a huge difference between 'not making a profit/not paying tax' and losing $437m in one quarter. Half a billion loss is a weird strategy to avoid giving the government some cash

  14. Frank N. Stein

    If a business isn't making money, how is it growing and what is it growing? Increasing sales while still losing money doesn't really equal "growth" because what isn't growing is the money they should be making. This is odd, because if Apple, Microsoft, or Oracle were losing money, there'd be a shareholder revolt. Remember how things got for HP when they were losing money? Who else can you think of who's sustained continuous loses year after year while increasing sales? The positive is that they apparently have the cash to keep the business running and making increased sales. Hopefully some day, that will amount to money. I didn't realize until I read this article, that Amazon had been round for 20 years and has never made a profit. How long can they continue to operate at a loss like this?

    1. Alan Brown Silver badge

      "If a business isn't making money, how is it growing and what is it growing? "

      You can show a loss by ploughing profits back into capital equipment and replying on depreciation, but that strategy only works for so long.

      The other thing to bear in mind is no matter what the share value is now, Amazon only got whatever they were worth when originally sold. Unless they've made new share issues (creating more debt), they've leveraged the losses by taking out loans (creating even more debt) based on the share value. That's voodoo economics at its finest.

  15. Doctor Syntax Silver badge

    How much profit do the likes of Microsoft Ireland make? IIRC it was a long time before Microsoft started paying dividends yet their stock market value kept going up and up.

    1. Anonymous Coward
      Anonymous Coward

      "IIRC it was a long time before Microsoft started paying dividends"

      Traditionally, fast-growing technology companies have argued that it is better to reinvest profits into the business to drive growth still faster. When they have chosen to redistribute cash to shareholders, they have done so using stock buybacks, which is not only tax-efficient, but also helps drive up the value of the remaining shares in circulation. But the US government's decision to scrap taxes on dividends in 2003 has persuaded the technology sector to re-evaluate its position and dividends are now more common.

  16. Fihart

    Over a cliff.

    I don't think anyone is accusing Jeff Bezos of driving Amazon over a cliff.

    Steve Ballmer, Microsoft more so.

    1. TheOtherHobbes

      Re: Over a cliff.

      >Steve Ballmer, Microsoft more so.

      That's not a cliff. That's an opportunity.

      Jury's out on Bezos. I'm willing to believe he knows what he's doing. But Amazon (the site) is getting kind of chaotic, AWS is going up against the likes of Digital Ocean and Linode at one end and Azure at the other, and now Bezos is spending cash on bricks and mortar - as well as tablets (not quite fail) and phone (utter fail.)

      It's looking increasingly out of control. A quarter or two of actual profits would do a lot to reassure everyone.

  17. Will Godfrey Silver badge


    <sark = "on">

    They are simply following the Hollywood model. What's the problem?


    1. BonerNose

      Re: So?

      surely just...




      or maybe

      <sark state="on">



  18. Grubby

    I disagree

    The purpose of a process is to deliver an output. A business is merely a set of processes that are designed to produce a number of outputs. Money can be used as a measure, for example some companies only focused on squeezing as much as possible out of their customers will measure their success by how much money they make.

    Others will measure customer satisfaction, innovations delivered; the number, quality and happiness of employees. Personally I would rather work for a company that shows these values, I'd rather be a customer of a company that shows these values and I'd rather invest in a company that shows these values.

    1. Tapeador
      Thumb Up

      Re: I disagree

      That's actually completely accurate from the perspective of company law: a company NEED NOT have as its object the creation of profit and return of value to investors. On the contrary its object can be whatever the company's articles of association declare as its object, including those other laudable measures you listed.

    2. I ain't Spartacus Gold badge

      Re: I disagree

      When you sell your company to shareholders, you lose some of the right to choose how you measure success. The shareholders who now own the company get the right to tell you to make profits. In order to compensate them for the vast amounts of money you chose to take from them in exchange for selling shares.

      A majority of those shareholders even have the power to sack you, or change the objectives of the company.

      1. Tapeador

        Re: I disagree @ Spartacus

        I'm not so sure you're right.

        Assuming you're right that a shareholder majority can vote in a change to the articles of association, it doesn't necessarily follow that any single majority will ever exist which chooses to do that.

        I have a suspicion the law permits the founders of the company to prohibit changes to those articles, or set very high majorities, or deprive ordinary shareholders of voting rights, or give a superior veto right to an exclusive class of (e.g. founder-) shareholder.

        Where I think you're certainly wrong is in your claim that "the own the company", because they only own a right to the residue post-liquidation. Everything else you've said seems a sort of moral deduction you've made, which actually doesn't hold, if you take into account the fact the shareholders will be aware they've entered into a contract for a very constrained package of rights (i.e. shareholders expectations of rights may be a lot lower than you've described, if they're warned that's the deal).

        1. I ain't Spartacus Gold badge

          Re: I disagree @ Spartacus

          That is true. It seems increasingly common in tech stocks to have massive amounts of the voting stock, concentrated in very few hands. So for example Zuckerberg held 51% of the voting stock, with only 10% of the total stock. A mis-match that I believe isn't allowed under the London Stock Exchange listing rules. This gives him total control of the company, for only 10% of the risk - and is another good reason not to own FB stock. I know nothing about the Amazon structure.

          As you say, just because a whole bunch of shareholders want something, doesn't mean they can get it. Even if each share had equal votes.

          However, once you've pissed off a bunch of major shareholders they can start making life awkward. Particularly if they can force representation on the board. And in the long run the people with the majority of voting shares get to decide who's on the board, and how much they get paid.

          The moral and legal obligations change when you sell shares. It's no longer your money. It's no longer your company. There are limits on what you can do.

          Remember also that your personal fortune is still tied up with the company. You're a paper billionaire. Your money is mostly tied up in those preference shares. Every time you sell some, your super-votes get more and more diluted. And if you piss off your big shareholders, they'll sell, and possibly have a public hissy-fit. Then your paper billions get devalued, and that yacht (or volcano base) requires the sale of more shares, and therefore the loss of more control.

          The legalities are complicated. But what it boils down to is you sold the company. Or at least a share of it. The people you sold it to want something in return. Deal with it. Or do what Michael Dell did, and buy your company back. Then you're in charge again, and can do what the hell you want.

  19. Annihilator Silver badge

    Pyramid scheme

    It's basically a pyramid scheme. Or the Martingale betting scheme (double your stake after every loss, you'll eventually win and recover your sum of losses). All valid schemes assuming there's infinite room for growth, which there isn't.

    Eventually, Amazon will need to generate sustainable profit/growth in order to stop collapsing under its own weight. Or bubble, if you will.

    Of course, Bezos and his many billions will be nowhere near it when that happens.

  20. macjules Silver badge

    C'mon it's Ballmer for chrissakes

    P.J.O'Rourke once said that making fun of born-again Christians is like hunting dairy cows with a high powered rifle and scope. Could equally apply that to Steve Ballmer.

  21. TruthZyme

    So keeping thousand of people in jobs (no not him!) isn't of any significance. Such people pay taxes ( even if Amazon doesn't) and so their contribution to society ( national security, fires service, ambulances, education... the list goes on .. ) counts as nothing relative to share-holder returns. Uncle Bill recycles vast sums to charities of his choice. What does Steve do along that axis?

  22. Anonymous Coward
    Anonymous Coward

    On the plus side..

    .. Amazon is not depending on conning people out of their money - they do actually provide a real service. They haven't been in the dock repeatedly for things like flat out theft (Stacker, for instance) or abuse of monopoly position (EU), nor is their income model dependent on breaking a standards model to con governments into accepting MSOOXML as a supposedly usable, open standard or screwing over usability as that creates a new argument to spend money by the clueless.

    So yes, Amazon makes less money, also because it ploughs a lot back into the business instead of giving "charitable" donations to places that threaten to use other products. Ballmer laughing at that is like Al Capone laughing at honest business owners that they're not in the protection racket or running drugs (not that I would characterise Amazon as fully clean - they have done some dodgy things too but compared to what MS has been up to when protecting its income it's very mild indeed).

    1. hoola Silver badge

      Re: On the plus side..

      Yes, and where is all the money coming from to services those losses? If you make a loss, then that means you have a shortfall in income over outgoings. You then need to fill the gap. That is currently being filled by idiotic investors who for reasons nobody can fathom, have this unbending belief that any Internet based company is perfect. They are then suprised when the edifice collapses and they all lose the money that has been invested. Not that this is their own money, it will always be someone elses.

      If this was a traditional "bricks and mortar" company, even if it had in Internet division, it would have been wound up years ago.

      Amazon is out to do one thing and ont thing only, destroy all competition using an "legal" means possible. If this is creative tax arrangements or using investors money to subsidise the operation, they do not care. All that matters is market share and while the money keeps flowing in from the investors it will keep going. We are as much to blame with the culture of knowing the price of everything and the value of nothing and chucking everything away as soon as it it out of date, broken etc. Manufacturers are equally to blame but this has been enforced by us and the big retailers where everything has to be cheap, even if it is crap.

  23. Frankee Llonnygog

    Hope he's better at being a shareholder

    Than he was at being a chairholder.

  24. Henry Wertz 1 Gold badge

    P/E ratio

    "Growth rate can't be the only measure by which a business is measured - yet that is exactly what investors seem to be doing year in and year out. "

    To expand on this a bit, when I was in college I took a few econ classes; it was odd, because the book and class were this mix of conventional economic theory and, well, there was a chapter in the book about how Enron was great that we skipped over since they'd just collapsed. P/E (price to earnings ratio) for typical utilities companies (low growth but steady income) was about 7-12 (so stock price is about 7-12x earnings per share) and other companies up to maybe 20. Now P/E ratios of 50 or more are commonplace, which would have conventionally been considered a stock bubble. Amazon's P/E for 2013 was 530,

    Partially Ballmer's comments are sour grapes I think, but what he says is also true; it's odd for a company that in the long term breaks even (more or less, it makes money one year and loses the next...) to have such a high stock value.

  25. This post has been deleted by a moderator

    1. Anonymous Coward
      Anonymous Coward

      Re: ýt

      Evidence? Links? References? That's quite a heavy accusation you're making.

  26. Saint Gerbil

    "I'm proud of the fact that I made $250bn under my watch as CEO."

    Unfortunately Microsoft probally could have made £500bn if you hadnt have dropped vista and windows 8 on us.

    I'm a big fan of MS but seriously dude you were the worst CEO.

  27. Tomas

    More than one way to look at a business...

    Balmer's view is that a businesses ONLY purpose is to make obscene profits and generate millionaires.

    To do this all of one's product is vastly overpriced "simply because one can do it."

    Perhaps Bezos believes in keeping prices and profits low and plowing money back into the company, getting as close to break even as possible.

    Investors mostly view a company as a cash cow, and even though Amazon's collection of companies don't pay vast sums in dividends, those investors do make a steady profit by their stocks continuing to increase in value over the years.

    If you sell a share that cost you $10 for $100, you've made a profit.

    Personally I'm more impressed with Bezos/Amazon than I am with Balmer/Microsoft, and even trust them more as a company. Microsoft's total focus was to take as much money from their customers as possible, and call it profit., Amazon's was not to overcharge customers, and call it good.

    I've spent thousands more with Amazon than I EVER have with Microsoft...

    Stuff it, Steve.

  28. Anonymous Coward
    Anonymous Coward

    Given the choice

    would I buy Amazon or Microsoft shares. Sorry, it would be Amazon.

    Microsoft are at a dead-end. Their old products are end of life, and their new products suck. They are the new IBM/3Com

  29. Conor Turton

    One thing overlooked by those who say Amazon are doing nothing wrong and Ballmer is just being bitter is that unlike Amazon, Microsoft now have many $billions to weather a storm. Amazon has virtually no reserves in comparison to operating costs. If it sees a prolonged drop in revenue and the banks refuse to finance them the only people it can go to for money are the shareholders. And what do you think will happen to the share value if it does?

    Re-investing profit into the business to grow it is a good idea but at some point you have to build up some reserves to cover at least the annual running costs of the company. Amazon have not done this. They have maybe $8Bn which is barely 1/4 of what they need to run for a year and lots of governments around the world are eyeing that for tax as in many of the markets it trades in it pays next to nothing if anything at all - France already sent them a bill for $252m.

    It wouldn't take a lot to bring Amazon down and it could be quite rapid.

  30. Steve Davies 3 Silver badge

    Balmer's Tax [redacted] trick

    Buy a sports team and pay very little Tax

    Pot calling kettle black a bit here...

  31. Anonymous Coward
    Anonymous Coward

    Most of their sales have been subsidized by the "no need to collect taxes on internet sales" subsidy. It means that they don't have to compete on an even playing field with other businesses. If Amazon doesn't have to collect tax, why should my local bookstore have to collect tax?

    Adjust for their subsidy and their business model loses over $1 billion per year, after 20 years in operation. You're subsidizing them by having their tax load shifted to your property and income taxes. Don't believe in sales tax? That's fine, but then let's exempt everyone from collecting them, not just internet sellers like Amazon.

    That Amazon keeps losing money despite its huge (for retail) government subsidy is surprising.

  32. No Blades No Bows

    I would read this

    This is great explanation of Amazon as a business and it's ambitions.

  33. Nelbert Noggins

    Next Balmer will be announcing he believes in the Easter Bunny and Santa Claus.

    Maybe it's just sour grapes because Amazon have better accountants.

    Does anyone serious believe Amazon aren't making money for 21 years?

  34. SouthernLogic

    Missed the point

    Unlike Microsoft that Balmer was well on his way to ruining. Amazon has been brilliant in their use of cash. They have been able to generate billions, yet managed to keep any profit off the books. Taxes the pay are nil. Try that Microsoft it is a very delicate balance to achieve and Amazon has become quite expert at it.

  35. nijam

    Like Microsoft China, then?

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