Jeff Bezos, founder and former CEO of Amazon Inc (NASDAQ:AMZN), tweeted a photo of a framed 2006 magazine with him on the cover with the text “Amazon’s Risky Bet.” The headline made reference to Amazon Web Services, the company’s most profitable venture today.
Big Bet
Jeff Bezos’ Wednesday tweet read: “ I have this old 2006 BusinessWeek framed as a reminder. The ‘risky bet’ that Wall Street disliked was AWS, which generated revenue of more than $62 billion last year.”
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The magazine in question is Businessweek. In its November edition that year it featured a piece about Jeff Bezos’ then-new internet venture, calling it “Bezos’ biggest bet since he and his wife, MacKenzie, drove west in 1994 to seek fame and fortune on the Net.”
Back then, the e-commerce giant was worth only $10 billion and the article pointed to how Bezos was going on a spending spree, as his cloud computing investments had soared by 52% from the year before.
Today, AWS is one of Amazon’s biggest growth-harvesting units and has become an essential component in the company’s $1.08 trillion market cap.
A Risk Taker
According to Amazon’s annual filing, AWS made $62.2 billion in revenue in 2021, and in the first quarter of this year, it has made $6.52 billion in operating income —well above the company’s total of around $3.7 billion.
Amazon has been adept at risking in the tech business, not always with good results. In 2014, the e-commerce juggernaut reported losses of $170 million for unsold Firephones, and five years later it shut down 87 pop-up stores and terminated its restaurant delivery undertaking.
In 2021, the company halted Dash Buttons, one-click buttons meant to be mounted around users’ homes for frequent reorders of products, CNBC reports.
Throughout the years, and to drive the company to success, Bezos has remained adamant: “We need big failures if we’re going to move the needle — billion-dollar scale failures… And if we’re not, we’re not swinging hard enough.”
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