The Economics of Amazon.com

Recently I have come across a number of comments online that shared a similar set of arguments. In a nutshell, they go as follows: Apple demonstrates fourth most impressive quarter ever – stock prices fall; Facebook beats revenue and profits forecasts – stock prices decline; Amazon misses the forecasts by a wide margin – stock price keeps going up.

I know very little about stock markets, but I know enough to know that predicting prices of individual stocks is very difficult to say the least. That being said, there are a few things about Amazon and how it operates that may not be necessarily obvious. A couple of weeks ago, I found a blog post by an ex-Amazonian, that summarizes these things succinctly. It is not very short, but quite insightful.