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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

July 27, 2012 at 9:55 AM

Vote: Does Amazon need to deliver more profits?

Once again, Amazon.com posted strong revenues but disappointing profits. As the Seattle Times’ Amy Martinez reported, the second-quarter results were the sixth straight quarter in which Amazon’s profit has declined on a year-over-year basis. Were shareholders disappointed? Amazon’s stock price was up more than 7 percent this morning.

CEO Jeff Bezos may not be the best Seattle civic steward and he may be a 21st century John D. Rockefeller, but his strategy harkens back to an older and to my mind more sustainable model of management. He’s reinvesting most of the company’s earnings into building the business. This is something that has been steadily lost since the 1980s, as companies were rewarded for squeezing every penny into short-term results in hopes of raising the stock price. Then, the hope was a merger, damaging communities and competition, R&D and innovation.

Amazon is in a particularly strong position to be the contrarian as it builds a business that keeps taking market share from more established rivals. But it’s a model that would build a stronger America than the short-term looting we’ve seen. What do you think?

Is Amazon’s strategy smart?

Read on for the best links of the week and the haiku:

The Week’s Links:

Comments | More in Amazon.com

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