Cloud Computing: Amazon dives after losses blow out

Grazed from FinancialTimes. Author: Barney Jopson.

Amazon shares tumbled almost 10 per cent after big investments in cloud computing contributed to a larger-than-expected loss and led the company to forecast that it would stay in the red in the third quarter. The online retailer reported a net loss of $126m, or 27 cents per share for the quarter to June 30, against analysts’ expectations of a loss of 15 cents, prompting a fall of 9.8 per cent in its shares to $323.66.

Tom Szkutak, Amazon’s chief financial officer, said the loss partly reflected spending on Amazon Web Services, its cloud computing business, which is used by organisations ranging from the Central Intelligence Agency to Netflix. He said usage of AWS services was growing at more than 90 per cent and added: “With the great, strong usage growth rates we’re seeing we’re also investing in capex, in infrastructure to support that growth.”…

The investments include new computer servers as well new staff: Mr Szkutak said the division had hired “thousands” of people…

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