How does Amazon make such big profits

Amazon Web Service: With this secret weapon, Amazon makes even more profit

After Facebook narrowly missed the analysts' specifications on Wednesday with its quarterly figures and had to pay for it with a price loss of over 20 percent, Amazon presented figures on Thursday. The mail order company also missed the forecast for sales growth slightly: the company made $ 52.9 billion in sales in the second quarter. The analysts had expected 53.4 billion.

But this time the investors reacted differently: Amazon's stock market price was up to four percent up on Friday, the Internet trading company from Seattle reached a new all-time high of 1630 euros per share. With a market value of 765 billion euros, Amazon is currently only surpassed by Apple. Microsoft and the Google parent company Alphabet are already leaving Amazon behind.

Investors reacted enthusiastically because Amazon surprisingly showed a higher quarterly profit than expected: the Seattle-based company earned $ 2.5 billion between the beginning of April and the end of June, twelve times more than in the same quarter of the previous year. For the 13th time in a row, boss and founder Jeff Bezos can show the stock exchange a profit.

Enormously high profit share in the server business

Amazon owes the high quarterly profit to a division that was once started as a waste product of in-house server management: Bezo's secret weapon is “Amazon Web Services” (AWS). The cloud business was able to increase its sales by 49 percent compared to the same quarter of the previous year and now brings the group in more than 6.1 billion dollars in sales per quarter - almost 27 percent of which are profit.

With AWS, Amazon has built a highly profitable second pillar out of nowhere with AWS, which can show a lot more margin than online trading or the digital media business.

Only one other division of the group is currently growing even faster than AWS: Amazon hides its growing business with online advertisements on its own Internet pages under the simple balance sheet keyword “other income”. More than 130 percent increased the income from advertising in comparison to the previous year - 2.2 billion dollars for the group.

Additional proceeds flow into the trading business