It seems to me that Amazon is the last of the 90s dotcoms. It's barely viable, so it just keeps going, but there's a huge premium on its share price that seems to presume that one day it will get a monopoly on online sales and suddenly be able to generate huge profits. As if this wouldn't (a) immediately result in massive cannibalization by new entrants or failing that (b) anti-trust enforcement.
Is amazon really "barely viable"? They seem to sell huge volumes in their main business. They might be losing money in the kindle business but that won't affect their main business (at least I wouldn't think so)
Before considering Kindles or "Prime" Amazon is barely profitable. It loses money on both of these new businesses, and it has the sword of Damocles (sales tax) ready to drop on it at any moment.
Yes, thanks to their vast operating profits from the cloud they have a P/E of ~3000.
Let's be generous and assume Amazon could push a button and run the rest of its business at break even, and that its revenues from the cloud are pure profit -- its P/E would only be somewhere between 50-70.
