Trick or Treat: Happy Halloween!

Spooky returns

A $10,000 investment in Amazon 20 years ago would be worth about $230,000 today.

What are the secrets to the company’s success? For one thing, a ruthlessly efficient corporate culture, in which employees are supposed to treat each day of the job as though it’s “Day One” for the company, executives carry around laminated cards printed with the company’s “Leadership Principles,” and warehouse workers may be expected to pick up an item “every eight seconds.”

Then there’s also the company’s uttery mastery of economies of scale—aka dominance through sheer size.

Big Bezos on campus

Amazon reports its quarterly earnings per share tomorrow. The company reported lower profits than expected last time around, in part because it spent a lot of money working to speed up delivery times. Investors will be looking for signs of improvement.

Although retail sales (i.e. everything you buy on Amazon.com) still make up the bulk of the company’s revenues, Amazon Web Services—the company’s cloud computing division—accounts for a disproportionate share of its profits. (That’s because running server farms comes with higher profit margins than its main retail business.)

While its long-term returns are still solid, Amazon stock has lagged the market lately—losing about 9% in the past three months.

That may be a reaction to the company’s disappointing second-quarter earnings, but could also be related to increased political rhetoric on reining in big tech. The Federal Trade Commission is already conducting an antitrust investigation of the company.