Amazon Defies Gravity For Yet Another Quarter

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Amazon announced higher revenue today but sharply lower profits. Investors don’t seem to care much: Amazon shares closed down a bit on the news, but as I write this they’ve already made up all of the loss and then some in after-hours trading. Matt Yglesias is amazed:

Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.

It’s a marvel, all right. The general idea, as near as I can tell, is that Amazon will build up lots of brand loyalty and will eventually be able to raise prices a bit without losing its customers. Maybe. I suppose I’d probably be willing to pay a slight premium to buy something on Amazon if my only alternative were an outfit I didn’t know anything about. (Or if I’d gotten some Amazon gift cards for Christmas, which I did.) So maybe they’ll eventually be able to pull this off. The problem is that, increasingly, their competition won’t be small e-retailers I’ve never heard of, but a handful of fellow giants who all have good reputations, good service, low prices, and easy checkout. That’s a tough space to make a profit in.

I suppose it’s also possible that selling actual stuff will merely be a loss leader for the Amazon services that make money in the future: remote storage, cloud computing, rakeoffs from Amazon affiliates, etc. Maybe maybe maybe. Still, my daddy taught me that a P/E of 3,479 was just a wee bit optimistic. I think I’ll stick to the craps tables in Vegas. The odds are better.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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