Weekly readings – 17th August 2019

The Amazon Publishing Juggernaut. I saw someone mention on Twitter that America’s exceptionalism is about the endless potential. To be honest, I have been quite surprised by the reactions to Amazon’s branching out to other areas in addition to their long-known expertise. They are taking advantage of capitalism and exceptionalism for which America is known for. If you don’t do a job well enough to secure your market share and please your customers, you’re ripe for the taking. Amazon is just so darn good at doing the taking

The dawn of the age of geoengineering. A super interesting blog post on the potential Earth-saving projects.

Amazon offered vendors ‘Amazon’s Choice’ labels in return for ad spending and lower prices. Not a good look for Amazon.

Apple brings contactless student IDs on iPhone and Apple Watch to more universities. I love the way it is going. Apple makes it more sticky for students to own an iPhone

Is Elon Wrong About LiDAR? A very interesting post on Lidar, a popular technology in the world of autonomous vehicles

Amazon’s Quarterly Earnings

On that FY2019 Q2 earnings by Amazon…

Revenue

In the last 90 days, Amazon recorded $63 billion, meaning that it took the company less than 36 hours to make $1billion. An extraordinary rate. Compared to last year’s Q2, revenue rose by 20% with Services (31%) outperforming Products (12.5%). Nonetheless, gross margin slipped as this quarter’s figure is at 4.8% compared to 5.6% last year.

Source: Amazon

AWS

Among Domestic, International and AWS categories, the latter continues to lead the way in terms of YoY growth. AWS’s revenue in the last 90 days is $8.3 billion, a rough equivalent of about $32 billion annually. It’s pretty impressive for just a segment of a company. Not many standalone companies can generate that much revenue in a quarter. It’s even more telling when we put AWS next to GCP. Google announced last week that GCP’s annual run rate is $8 billion, meaning that AWS is approximately 4 times bigger than its rival from Google.

Despite making up only 13% of Amazon’s revenue, AWS is responsible for about 69% of the company’s operating income.

At 37%, AWS’ YOY growth is the lowest recorded in a long time, but the law of big numbers should be taken in account here as the division is not as small as it used to be. If broken down into more strategic categories, AWS isn’t the segment with the biggest YoY growth (Excluding FX) in the company. It’s Subscriptions. Subscription memberships, especially Prime, play a crucial role in Amazon’s ecosystem. The fact that it notched the biggest growth, ahead of AWS, is very positive for the company.

Advertising

As can be seen above, advertising slowed down significantly after a hot streak just 12-15 months ago. YoY growth decreased noticeably compared to the 3-digit growth just a while ago. Still, it contributed $3 billion to the company’s top line.

Free Cash Flow and Shipping Costs

Amazon’s free cash flow this quarter is truly insane with 65% YoY improvement in Operating Cash Flow and a 3-digit growth in Free Cash Flow.

Source: Amazon

Shipping costs continued to rise with 36% YoY difference compared to previous second quarter’s. It’s worth noting that none of the Online Stores, Physical Stores and 3rd Party Seller Services have the same growth (all grew at a slow pace than shipping costs)

Sometimes, it’s hard to believe that a company founded roughly 25 years ago can be this powerful and big. A segment responsible for only 13% of its revenue is the dream of so many and it continues to deliver at an impressive rate.

Weekly Readings – 6th July 2019

Rising U.S. Inequality: How We Got Here, Where We’re Going

How Costco gained a cult following — by breaking every rule of retail. Costco is Charlie Munger’s pick as Amazon’s biggest threat. He may have a point here.

Student Loans Are Not A National Crisis. I am a bit reluctant to add this story to the post as I don’t really like the headline. However, his points are valid. So why not? In the summary, I agree with him that wiping out college debt does nothing to address the root issue. It’s about the system that leads to the current debt situation and the lack of personal finance knowledge.

The rise and rise of a Vietnamese corporate empire. FT pulled the curtains on one of the biggest corporations in Vietnam. Both the good and the bad.

Amazon in-sourcing nearly half of its parcel transportation needs. A look at Amazon’s transportation capabilities

Understanding Financial Statements. A very good primer on the fundamentals of financial statements.

Global App Revenue Reached $39 Billion in the First Half of 2019, Up 15% Year-Over-Year. A great study on app revenue and downloads in the first half of 2019 from Sensor Tower.

Global Entertainment & Media Outlook 2019–2023. An interesting and informative report on global entertainment and media by PwC.

Making 5G pay. A look at how 5G can be monetized, how much consumers are willing to pay (an estimate) and how different 5G packages can be introduced for different needs.

All about Direct Listings. A great overview of direct listings by a16z

Weekly readings – 29th June 2019

Bodies in seats. A horrifying investigative piece on the working environment of and the emotional toll on employees who are tasked with policing content on Facebook.

Millions of Business Listings on Google Maps Are Fake—and Google Profits. Fake business listings plague Google Maps and can spell potential danger on users.

Why Google+ Failed. An insider perspective on why Google’s attempt to unseat Facebook failed.

The 70-year-old retiree who became America’s worst counterfeiter. A highly interesting story that I believe is unknown to many.

GDPR Enforcement Tracker. 56 fines since its official introduction with Google’s $50 million fine as the biggest one so far. Whether GDPR met your expectation, the most important point I think is that without regulations, how could you hold companies accountable?

How E-Commerce Sites Manipulate You Into Buying Things You May Not Want

The Insulin Racket. A deep dive into why insulin, which is very critical to many’s well-being, became three times more expensive in the span of 10 years. Drug companies profited while lives were devastated.

Jony Ive Is Leaving Apple. I like John Gruber’s take on this.

Freemium’s Public Moment. Some interesting head-to-head comparisons between Fremium-based companies

Amazon is watching.