Hacker News Reader

Another thing to consider is how the money is spent changes how much profit is made.

If Amazon reinvests into assets, that money isn't considered a loss. So it doesn't reduce profits. So when Amazon buys a video library those IPs are assets.

You only deduct spending that are expenses.

As Amazons business changes it might be harder to hide their profits in expenses.

investments in assets result in depreciations which are expenses that reduce profits; you don't write off the asset as a loss all in one year, but it all gets written off across a series of years.

I don't know. If you look at the income/growth graphs that growth from web services has continued quarterly for two years, and this is the second quarter of profit. I doubt they could have had an "oops" moment regarding almost a billion dollars over two quarters (6 months). It looks like a major change. Unless, like the article suggests, they are taking profits now to prepare for a larger capital investment in the near future.

Perhaps they were expecting the Echo to really flop.