Why Amazon Is Happy to Burn Money on the Kindle Fire

Amazon’s profits are down because they’re spending money on expansion. A lot of the money is going into Amazon’s old business, CFO Thomas Szkutak explained — the company is building out dozens of new distribution centers to help it ship all the physical stuff its customers still order. And a lot of the money is going into its new digital business — in particular, the new Kindle Fire. Amazon is ultracautious when providing any details about its business, and Szkutak didn’t break from that tradition. But he did go out of his way to play up the company’s investments in its new tablets. And while he didn’t spell it out, he made it quite clear that the company was happy to lose money on the tablets in the short term because it could sell more stuff to Fire owners in the long run.