SHOW ME THE MONEY! Ballmer on Amazon: 'They're not a real biz, they make NO cash'

Re: Can't believe that I agree with Balmer

But Mr Balmer also thinks that Apple is crap

Oh wait, That is what we are supposed to think on this 'We all hate Apple' site.

Re: Can't believe that I agree with Balmer

I would assume the idea of growth is, at some point to turn that around into massive profits. It's a big gamble, as other companies have no doubt collapsed under their own weight.

@Dan 55

"Then again it also takes a certain mindset to plough absolutely everything back into the business."

Don't discount the money he gets in salary, expense accounts, stock options, and other assorted benefits. They are not negligible. Amazon as a corporation might not be making a profit but don't think that Bezos is anything other than very well compensated.

Re: This bears repeating here:

That's just an apologist excuse for Amazon's lack of profit. If this was such a great strategy every company would do it, because no one wants to pay taxes if they can help it. That's why Apple, Google and everyone else has that complex "double Irish" overseas tax strategy, why they leave money overseas instead of bringing it back to the US, etc.

If simply "investing everything back into the business" was a viable strategy, everyone from Apple to Exxon would be doing it - but they can't, because they make vast piles of money Bezos can only dream of and there's no conceivable way they could reinvest it all and avoid showing taxable income unless Apple started drilling for oil and entering every other business every company in the Dow 30 is in, and Exxon did the same along with designing their own smartphones and tablets.

What is the end game for shareholders? If I told you, "hey invest $100K in my new restaurant and you'll own 20% of it" but I always reinvested every penny back into the business so your 20% never provided you a penny of income, would you think you made a great investment? Maybe if you could find someone willing to pay you more than $100K for that 20%, but they might want to be assured they'll get some return from it, other than having to find someone willing to pay them even more.

At some point a business must make a profit for investment in it to be worthwhile, but now the apologists seem to have a way that can permanently excuse Amazon from ever making money. Forgive me if I inform you that investing in a company that will NEVER pay out dividends is a terrible idea. Well, it isn't a terrible idea, it is known as charity, but at least with charity you get a tax deduction and a warm fuzzy feeling for having helped out.

What did they say about George W Bush?

Born with a silver foot in his mouth? Ballmer bragging about making $250 billion as CEO is like a billionaire bragging about making millions a year - he could do that if he put it all in a savings account making 0.25% a year.

"If a business isn't making money, how is it growing and what is it growing? "

You can show a loss by ploughing profits back into capital equipment and replying on depreciation, but that strategy only works for so long.

The other thing to bear in mind is no matter what the share value is now, Amazon only got whatever they were worth when originally sold. Unless they've made new share issues (creating more debt), they've leveraged the losses by taking out loans (creating even more debt) based on the share value. That's voodoo economics at its finest.

"IIRC it was a long time before Microsoft started paying dividends"

Traditionally, fast-growing technology companies have argued that it is better to reinvest profits into the business to drive growth still faster. When they have chosen to redistribute cash to shareholders, they have done so using stock buybacks, which is not only tax-efficient, but also helps drive up the value of the remaining shares in circulation. But the US government's decision to scrap taxes on dividends in 2003 has persuaded the technology sector to re-evaluate its position and dividends are now more common.

Re: Over a cliff.

>Steve Ballmer, Microsoft more so.

That's not a cliff. That's an opportunity.

Jury's out on Bezos. I'm willing to believe he knows what he's doing. But Amazon (the site) is getting kind of chaotic, AWS is going up against the likes of Digital Ocean and Linode at one end and Azure at the other, and now Bezos is spending cash on bricks and mortar - as well as tablets (not quite fail) and phone (utter fail.)

It's looking increasingly out of control. A quarter or two of actual profits would do a lot to reassure everyone.