Amazon did not wait until the second half to pick up the pace of spending. In its filing with the US Securities and Exchange Commission, Amazon said: "As worldwide e-commerce and other online and web services grow, competition will intensify".
Once again, internet major Amazon's losses from its worldwide business soared, this time over five times for the quarter ending June 30, climbing to as much as $724 million.
Amazon.com Inc Chief Executive Jeff Bezos has unseated fellow tech billionaire Bill Gates as the richest person in the world, profiting from the e-commerce company's meteoric stock rise to reach a fortune of $90.6 billion, Forbes reported. Amazon founder Jeff Bezos said "Our teams remain heads-down and focused on customers", but left defending the decision on a conference call with analysts to CFO Brian Olsavsky. Amazon hired more than 30,000 new employees "in the last few months", Mr Bezos said. Analysts had expected operating income in the third quarter of $931 million, according to FactSet StreetAccount. Net income was $197 million in the second quarter, or $0.40 per diluted share, compared with net income of $857 million, or $1.78 per diluted share, in second quarter 2016. Analysts estimated US$40b. Bezos issued a request for philanthropic ideas in a tweet in June, just before Amazon announced a $13.7 billion deal for organic grocer Whole Foods. "We see great momentum and success there, so we continue to invest and we have some of our best people in that business".
The vast Amazon fulfilment warehouse at Rugeley The Amazon warehouse at Rugeley The vast Amazon fulfilment warehouse at Rugeley
At the same time profits for the group slumped 77 per cent as it spent more on expanding services such as its Amazon Fresh grocery delivery service, its TV on-demand Amazon Channels subscriptions and its two-hour delivery Prime Now service around the world. The company had 85 million Prime subscribers in the United States as of June 30, an increase of 35 per cent from a year earlier, according to Consumer Intelligence Research Partners. The company doesn't disclose the number of Prime subscribers.
Revenue from Amazon Web Services, its profitable cloud-computing division, rose 42 per cent to US$4.1 billion. The unit's sales increased 43 per cent in the previous quarter. Also, ET reported in June that Amazon was set to introduce its Alexa voice Service and Echo speakers in India by the end of this year.