Half the accounting industry basically exists to document how much taxable profit you made "even when spending all the money that comes through".
http://cepr.net/blogs/beat-the-press/jeff-bezos-amazon-and-t...
http://cepr.net/blogs/beat-the-press/franklin-foer-confuses-...
Right or wrong, for good or worse, this author is being deliberately obtuse on this matter.
Amazon generates profits and re-uses them before they're on the books as profits. It's a tactical decision, and the letter of the accounting law doesn't contravene their strategic decision.
If you don't like it, don't buy their stock. They've been at this game for a very long time.. so, it's no surprise.
"The people who say that this is due to the fact that they are investing in building up their business are showing their ignorance. Reinvesting and profits are two separate issues. Profits reflect the difference between revenues and costs on current business operations. These can all be used for investment in expansion (as opposed to being paid out as dividends and share buybacks), but they should still show up as profits. Amazon doesn't show profits or at least not much. This means that it costs them as much to run their business as they are getting from customers in revenue. That is not viable as a long-term model even if they are always expanding."
Both statements seem like reasonable statements to me (who is, again, ignorant of the law). Is he wrong? Could you expand on why he's wrong?
If they are practically giving away kindles or Amazon prime, that's a legitimate marketing cost, not profit spent tactically.
There's no guarantee their revenues will stay after they stop spending that money.