The Relationship Between Margins and Acquisition Prices
Tom Tunguz
FEBRUARY 25, 2013
Amazon operates its businesses at very close to break-even, zero net margin, to win the greatest share and prevent competition from undercutting them. This is as true for their books business as their infrastructure business, AWS. Bezos has explicitly stated this strategy and it’s the one that has led to Amazon’s massive success in many different lines of business.
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