Amazon invests heavily in cloud, tablet development

[Simon]

Amazon.com will continue to invest significantly in cloud computing and developing a tablet rather than ease tight margins.

Sales of its Kindle ebook reader helped boost revenue by 51% in the second-quarter to $9.91 billion, topping predictions.

However, net income fell to $191 million from $207 million, and operating profit margin fell to 2% from 4.1% a year earlier, after heavy spending on distribution, technology and digital content.

Despite that, the company is continuing to invest in warehouses and distribution, as well as spending heavily on servers and datacenters for cloud-computing system Amazon Web Services.

The company is also buying more digital content to bolster media offerings, such as streaming video.

This spending has dented profit margins in recent quarters. Analysts and investors are mostly happy to see such investment by the company - as long as it winds down at some point and lays the foundation for future profits.

Read more: http://www.pcpro.co.uk/news/cloud/368905/amazon-invests-heavily-in-cloud-tablet-development

[Rik]

Oh dear, we'll have such a diverse market that one purchase will see a user locked in for life.