TIME Earnings

Amazon Just Made a Profit for the First Time in 6 Months

The packaging process at the Amazon fulfillment center in Tracy, Calif. on Nov. 21, 2014.
The packaging process at the Amazon fulfillment center in Tracy, Calif. on Nov. 21, 2014. Stephen Wilkes For TIME

The company beats expectations on earnings but misses on revenue—and, crucially, turns a profit

The fourth quarter earnings report for Amazon is in, and it’s caught analysts by surprise.

Amazon reported earnings per share of 45 cents, handily beating expectations of 18 cents, on revenues of $29.33 billion, up 15% but missing expectations of $29.68 billion. The company turned a profit of $214 million, a slight decline from the same quarter a year ago but a stark reversal from last quarter.

Here’s what you need to know about its latest earnings report.

What you need to know: The Internet retailer spooked investors last quarter by missing expectations on both earnings and revenue and offering bleak guidance for the quarter. We’re seeing a shift here, and it’s nearly all upside: the company’s shares were up more than 10% in after-hours trading.

As for guidance, Amazon expects net revenue for its fiscal first quarter 2015 to be between $20.9 billion and $22.9 billion—growth between 6% and 16% compared with the same quarter in 2014—and operating income to be between $50 million and a loss of $450 million. The figure includes about $450 million for stock-based compensation and amortization of intangible assets.

The big number: 53%—the increase in paid membership, worldwide, for Amazon’s Prime service that combines delivery of physical goods and digital media. The company sunk billions into Prime’s shipping component and another billion into its Instant Video component.

“When we raised the price of Prime membership last year, we were confident that customers would continue to find it the best bargain in the history of shopping,” CEO Jeff Bezos said in a statement. “The data is in and customers agree.”

What you may have missed: Amazon Web Services, the company’s cloud computing arm, saw usage growth of almost 90% compared to the same quarter a year ago. The money’s not far behind: Amazon’s “Service” revenues for the fourth quarter were up 38% year over year to $6.2 billion.

This article originally appeared on Fortune.com.

TIME Companies

Amazon Wants to Power Your Work Email

BRITAIN-BUSINESS-RETAIL-AMAZON
A picture shows the logo of the online retailer Amazon dispalyed on computer screens in London on December 11, 2014. Leon Neal—AFP/Getty Images

Amazon deliveries go from electronics to emails

Amazon has launched a work email service aimed at undermining Microsoft’s dominance in office messaging.

The e-commerce giant is introducing WorkMail, allowing users to send and receive emails, and manage contacts and share calendars all stored on Amazon’s cloud servers.

WorkMail won’t replace Microsoft Outlook’s software interface for businesses that make the switch. Instead, it changes the background technology that powers corporate email. It will push messages through Amazon’s encrypted computer networks at a monthly cost of $4 per inbox.

Amazon said that with WorkMail customers won’t have to buy servers or manage software, upgrades, or patches. Instead, they just have to pay for each inbox.

“Customers have repeatedly asked us for a business email and calendaring service that is more cost-effective and simpler to manage than their on-premises solution,” said Peter De Santis, vice president of AWS Compute Services, said in a press release. “We built Amazon WorkMail to address these requests.”

An analyst with Baird Equity Research, Colin Sebastian told the Wall Street Journal that email services could bring Amazon $1 billion each year, based on estimate of sales for Google’s business software.

MONEY online shopping

Amazon Prime Membership Should Come With a Warning

Amazon Prime packages
Justin Sullivan—Getty Images

And the warning is: After paying $99 for your subscription, you're going to spend a ton of money at Amazon.com.

Amazon rarely releases sales data to the media. Nonetheless, the idea that customers who subscribe to Amazon Prime wind up shopping and spending a lot more at Amazon is considered fact. After all, once customers are paying $99 for the service and know that express two-day shipping is available for free on nearly all purchases, it makes sense that they’ll stop shopping elsewhere and do most if not all of their online shopping at the site. It helps, of course, that Amazon has a reputation not only for selling a huge variety of merchandise, but for having low prices as well.

But what impact, exactly, does signing up an Amazon Prime membership have on the individual’s online purchasing habits? Again, it’s hard to say because Amazon is reticent to release data. What’s more, things are complicated because the people who find it most worthwhile to join Amazon Prime are those who shop often at Amazon in the first place. (When you’re a member, the more you spend, the more you “save,” at least in terms of shipping.) So it’s not simply a matter of figuring out how much Prime members versus non-Prime members spend at the site.

Still, it’s undeniable that Prime members spend a bunch more at Amazon than non-Prime members. In a recent story by a couple of my MONEY colleagues about Apple, Amazon, and Google in terms of investing opportunities, a ComScore report is mentioned revealing that “Prime members make twice as many purchases as nonmembers, and they spend 40% more per transaction.”

Read more: Why You Should Never Buy Stuff When You’re Sad

This week, a new survey was released by Consumer Intelligence Research Partners (hat tip: Huffington Post) with some precise dollar figures regarding the topic. According to a survey of consumers who made purchases at Amazon from October to December 2014, Prime members say they spend an average of about $1,500 at the site annually, versus $625 for non-members.

Owning an Amazon Kindle is also correlated with increased Amazon.com spending. Kindle owners (who may or may not also be Prime members) spend $1,450 per year at Amazon, compared to $725 per year for customers who don’t own Kindles, according to the survey. “Similar to Amazon Prime members, Amazon Kindle owners are better customers,” Mike Levin, partner and co-founder of CIRP, said in a press release about the new report. “They also shop more frequently, and also buy more expensive items on average.”

All in all, the spending data spells out plainly why Amazon pushes sales of Prime and Kindles so hard. In particular, the world’s largest retailer has been relentless in upping the Prime value pitch by adding streaming services, producing original movies, and such. Just last weekend, for instance, Amazon dropped the price of Prime to $72 and allowed everyone to stream its Golden Globe Award-winning online show “Transparent” as a way to show off one of the perks of being a Prime member.

Read more: Amazon Is Making It Easier to Publish Your Own Kindle Textbooks

It’s no mystery that Prime membership, Kindle ownership, or both are essentially gateways that welcome online shoppers into the Amazon consumershere and result in sharply increased spending at the site.

On the other hand, there’s good reason to believe that people who aren’t Prime members are more likely to shop around and make purchases at Amazon only when it’s clearly the most convenient or cheapest option. They don’t automatically defer to making purchases at Amazon, like Prime members appear to do. And based on some recent studies indicating that Amazon doesn’t have the cheapest prices across the board, it seems wise to browse a range of retailers rather than immediately head to Amazon for a one-click purchase of your latest need.

Read next: Amazon Outbid Netflix For Its Most Successful Show

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TIME Television

This Show Imagines What Life Would Be Like if the Nazis Had Won World War II

The_Man_in_the_High_Castle_Pilot_7130.NEF
Amazon Studios

Amazon's new pilot proves that alternative-history shows are an uphill battle

The Man in the High Castle, by Philip K. Dick, is an acknowledged classic of the alternative-history genre — the sort of books that imagine a world in which something important had gone differently. (In this case, it’s if the Axis powers had won World War II.) The TV show of the same title, whose pilot is currently streaming on Amazon, is unlikely to meet as much success, not least because the alternative-history genre of TV isn’t something that exists. In general, TV has been uniquely bad at conveying dystopian fantasies. So far, The Man in the High Castle is worse than it could be — but it’s hard to call it a disappointment, given how low expectations should have been.

The power of books that imagine the apocalypse (or a far worse alternate present) is their power to parcel out information about the state of the world we’re witnessing through context. When television attempts to do the same, it feels sledgehammer-level unsubtle. In a book, a mention of a popular current movie or song, or a quick description of a poster or work of art, can be easily absorbed in the flow of information. In Amazon’s Man in the High Castle pilot, when the camera pauses on a movie theater marquee or poster of a Third Reich soldier, it feels as though we’re being nudged in the ribs: This will be important later! The important stuff that’s actually interesting gets withheld to a frustrating degree, in favor of fairly dull characters who are on quests we don’t get enough information about to care. What would it really be like to live under Nazi rule in America? We don’t get a strong sense, aside from a vague feeling that the police would be far more aggressive.

Subtlety isn’t television’s strongest trait, but shows like The Man in the High Castle, which exist in a wildly different universe than our own, only exacerbate the medium’s problems with obviousness. We want to know how America ended up overrun with German and Japanese soldiers — just as how, in Under the Dome, we want to know how the town ended up under a dome, or how in the late ABC reboot of V we wanted to know the alien’s plots. Those last two shows are but two easy examples of an irritating phenomenon: when they did parcel out information about the world in which their characters found themselves, it was heavy-handed in a way that only emphasized how much the rest of the show was wheel-spinning.

In The Man in the High Castle, the popular movies and songs of Nazi-controlled America are lingered upon, as though they’ll be important later. The mechanics of a bus trip to a free zone are straightforwardly stated by a character whose function is largely pure exposition. But the mechanics of how the Germans and Japanese conquered and then divided America are easily hopscotched over. TV can give very obvious information very quickly, through exposition. What it can only do far more effortfully and over a longer period of time is convey a complex society very different from our own. With characters as schematic as the ones in High Castle and a plot so reliant on shoulder-tapping obviousness, it’s hard to imagine tuning in for that long.

What would make the show more watchable in the long run? The twist at the end of the pilot is a good sign: Prior to that, the characters had behaved exactly as we might expect them to. The central question of this show hinges upon a collision between American and Third Reich ways of life, so giving us characters who are morally compromised or hazily in-between — rather than, as many are, firmly situated on one side or the other in an intractable war — will allow the ideas of the show to reach their potential.

Only the first episode is available, so far, which is exactly the wrong amount; those characters who are on one or the other side seem just like chess pieces waiting to play their part in the drama, thanks to how little we know. The lack of information about the most interesting aspect of High Castle, its bizarre geopolitical setting, isn’t tantalizing. It’s a reminder that the show isn’t, yet, getting down to the business of showing us what its world is really like and how it got that way.

Read next: Eva Kor: What It Was Like to Be Experimented on During the Holocaust

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MONEY deals

Free ‘Transparent’ Streaming, Cheap Amazon Prime on Saturday

Jeffrey Tambor in Transparent
Jeffrey Tambor in Transparent Beth Dubber—© Amazon/Courtesy Everett Colle

Amazon already has tens of millions of subscribers to Amazon Prime. But Amazon wants more, and it's using a Transparent-Golden Globes-themed promotion on Saturday to win them over.

A report surfaced last autumn estimating that as many as 50 million people were members of Amazon Prime, the $99-per-year subscription service that includes two-day shipping on most purchases and unlimited streaming of video and music content. Mind you, that was before the 2014 holiday shopping season, during which Amazon reported some 10 million new members had signed up for Prime.

Previous studies have indicated that Amazon actually loses money on Prime due to all the shipping costs incurred by frequent shoppers. Yet Prime is undeniably a powerful revenue driver for the world’s largest retailer, because of the tendency of subscribers to make nearly all of their online purchases at Amazon once they’ve paid for a membership. Hence Amazon’s relentless push to boost Prime subscriptions at any and every opportunity.

And hence the latest Amazon promotion, which on Saturday grants everyone with an Internet connection free streaming of Transparent, the ground-breaking Golden Globe-winning comedy normally only available to Prime subscribers. Besides celebrating the success of Transparent and lead actor Jeffrey Tambor at the Golden Globes, the idea of airing the show for all to see is surely also a pitch to snag more Prime members. The implicit sales pitch being: Just look at the kinds of things you’d get to watch regularly if you were a Prime member!

What’s more, Amazon is giving Prime extra appeal by knocking the usual $99 price of a subscription down to $72 on Saturday, January 24. Why 72? Again, it has to do with the Golden Globes—the most recent awards were the 72nd in history.

MONEY The Economy

Why These 5 Companies Are Laying Off Thousands of Workers

eBay Inc. office building, San Jose, California.
Kristoffer Tripplaar—Sipa USA

The economy is on the mend. Unemployment rates are down. So what's up with all these companies slashing jobs by the thousands?

Here’s some explanation—note we used the word “explanation” not “justification”—for why a handful of companies are laying off large chunks of their workforces even as the economy is on the upswing and unemployment is falling month after month.

eBay: 2,400 jobs
On Wednesday, eBay announced it would be cutting 2,400 jobs in the first quarter of 2015. The company says that the layoff figure includes positions that are unfilled, so the actual number of people losing their jobs will be less than 2,400. What’s more, eBay points out that the figure represents only 7% of the company’s total workforce. (Are we the only ones surprised to hear that eBay currently employs 34,600 people?)

Among the factors influencing the layoff decision: “Weak holiday sales” and revenues that have been lower than analysts expected, as well as a company restructuring in anticipation of the spinoff of eBay’s online payment service PayPal. The company said it may also spin off a third division, eBay Enterprises, which runs e-commerce operations for other companies, explaining in a statement: “It has become clear that [eBay Enterprise] has limited synergies with either business, and a separation will allow both to focus exclusively on their core markets.”

As for weak sales, one reason eBay is suffering is that, unlike Amazon—which effectively uses its Amazon Prime membership program to create legions of shoppers who make the vast majority of their purchases at its site—many eBay customers use the site randomly and haphazardly rather than habitually. “It’s the infrequent shopper that comes two, three, four times a year,” eBay CEO Donahoe told USA Today. “They didn’t come back at the rate we thought.”

American Express: 4,000 jobs
During the course of 2015, AmEx plans on cutting costs by trimming 4,000 jobs after failing to meet long-term revenue growth target of 8%. The Wall Street Journal pointed to “a stronger dollar, a weak December for retail sales and the sharp drop in gas prices” as forces that hurt the company’s fourth quarter results—which actually showed revenue and profits increasing, just not enough to satisfy investors. The 4,000 layoffs represent 6% of AmEx’s total workforce of roughly 63,000.

Baker Hughes & Halliburton: 8,000 jobs
The two energy companies agreed to merge last autumn, and both ended the year strongly, with Halliburton posting revenues up nearly 15% and Baker Hughes achieving record revenues for the quarter. Nonetheless, in light of plunging crude oil and gas prices, oilfield services provider Baker Hughes announced plans for layoffs of 11% of its workforce, roughly 7,000 employees, while Halliburton plans for about 1,000 job cuts of its own.

“This is really the crappy part of the job, and this is what I hate about this industry frankly,” Baker Hughes CEO Martin Craighead said this week in a conference call with analysts. “This is the industry, and it’s throwing us another one of these downturns, and we’re going to be good stewards of our business and do the right thing. But these are never decisions that are done mechanically.”

Schlumberger: 9,000 jobs
Another oilfield services company, Schlumberger also reported surprisingly strong fourth quarter results despite the steep drop in oil and gas prices—and it too recently announced big-time layoffs. Last week, the company said it had laid off 9,000 employees worldwide in late 2014 as profits fell and demand for oil retreated.

Read next: Here’s What You Really Need to Advance Your Career

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TIME Television

You Can Stream Transparent for Free on Saturday

(L-R) Actors Jeffrey Tambor, Jay Duplass, Amy Landecker and Gaby Hoffmann from 'Transparent' pose for a portrait during 2014 Television Critics Association Summer Tour on July 12, 2014 in Beverly Hills, Calif.
(L-R) Actors Jeffrey Tambor, Jay Duplass, Amy Landecker and Gaby Hoffmann from 'Transparent' pose for a portrait during 2014 Television Critics Association Summer Tour on July 12, 2014 in Beverly Hills, Calif. Maarten de Boer—Getty Images

Amazon announced today that it will stream the show in honor of its Golden Globes success

There will be no more excuses for not having seen Transparent come this weekend.

In honor of the show’s success at the Golden Globes, Amazon announced today that it will stream for free this coming Saturday via the Amazon Instant Video app or Amazon.com/Transparent.

The Golden Globes exposure has brought viewers to Jill Soloway’s show about Maura (Jeffrey Tambor), who comes out as trans, and her family. The average number of Amazon customers watching the show has grown 250 percent since it won Best TV Comedy and Tambor won Best Actor in a TV Comedy, according to Amazon Studios.

This article originally appeared on EW.com.

TIME Media

Amazon Outbid Netflix For Its Most Successful Show

Golden Globes 2015 - Transparent
Jeffrey Tambor stars in Transparent Amazon Studios

Transparent could've been on Netflix

Amazon has been raking in accolades for its new show Transparent, which stars Jeffrey Tambor as a transgender parent that comes out to her children. But the show could have belonged to Netflix.

Netflix CEO Reed Hastings told the Huffington Post that Amazon outbid his company for streaming rights to Transparent, which first aired its pilot on Amazon in February. The show has since been hailed by critics, recently picking up a Golden Globe for best TV series.

Amazon’s success with Transparent demonstrates just how competitive the market for premium television is becoming. In the same interview, Hastings told the Huffington Post that Netflix managed to outbid HBO for House of Cards, while HBO ended up snagging the rights to True Detective.

[The Huffington Post]

TIME Companies

Lukewarm Reviews Dampen Amazon’s Diaper Plans

Diaper
Close up of baby grabbing feet Stephanie Neal Photography—Getty Images/Flickr RF

Amazon is putting a hold on its Elements diaper sales to make improvements

Amazon is temporarily discontinuing the “Amazon Elements” diaper brand that it launched six weeks ago after tepid customer reviews.

In an email to customers, Amazon said that it had removed the diapers from its website as it makes “some design improvements to the diaper.” The diapers got mediocre reviews on Amazon, according to GigaOM.

The diapers were the first in Amazon’s new lineup of “Elements” environmentally-friendly products, which feature labels that customers can scan on the company’s mobile shopping app to learn about where the item was sourced.

When the diapers first launched, Amazon said it was responding to demand among Amazon Prime customers for products including diapers as well as information about where products are sourced.

MONEY Tech

Microsoft Takes a Step Down the Mobile Path

Microsoft and Nokia sign
Lehtikuva Lehtikuva—Reuters

The onetime technology leader now finds itself struggling to compete in mobile and media markets. With a new operating system set to debut this week, it’s looking to strengthen its chances.

On Wednesday, Microsoft is set to unveil Windows 10, the newest version of its flagship operating system. The time has come, the company says, to introduce a “new Windows…built from the ground up for a mobile-first, cloud-first world.” Most critically, the new products will make it easier for developers to build apps for mobile devices, including Microsoft’s own smartphones.

The news couldn’t come a moment too soon. The onetime technology leader has been struggling to compete in mobile and media markets. Currently, Windows models account for less than 5% of phones in use. So while Microsoft wants to be seen as the fourth member of the current pack of tech titans, alongside Apple, Amazon, and Google, it still has a ways to go.

Mobile weakness notwithstanding, Microsoft remains the world’s largest software producer, with a stock market value of $381 billion (north of Goo­gle’s) and $90 billion in cash on hand. Revenue from selling and licensing products like Windows to companies—about half of Microsoft’s business—grew by an impressive 10% last quarter. Revenue from Xbox, one of the world’s most popular gaming consoles, grew more than 58%. Meanwhile, the company released its latest cellphone to positive reviews. The stock stands at a near 15-year high.

Still Facing Headwinds

A lot is riding on the success of Windows 10. Demand for personal computers has fallen off, thanks to smartphones and tablets. Sales of Microsoft’s own tablets, such as the Surface Pro 3, have picked up recently but lag far behind those of the Kindle Fire and iPad.

The company’s smartphone—$600 at its most expensive—is “too high cost, and it’s too late,” says Mary Mona­han of research company Javelin. A tardy entrance gave Google and Apple valuable lead time and made Windows a less desirable outlet for app developers. “The value of the iPhone is that you get all of these great apps,” says Monahan. “When you buy a Microsoft phone, what do you get?”

The Outlook for Investors

Prospects for Microsoft aren’t ugly, but they’re not great either. While Xbox, with its legions of dedi­cated customers, has proven popular, analysts believe long-term success requires an untethered platform. “The future is more control of your day-to-day life with your phone,” says Monahan.

Windows 10 is part of new chief executive Satya Nadella’s strategy to prioritize investments in mobile, like its 2014 purchase of Nokia’s handset division; Microsoft is likely to use its cash kitty to fund further deals.

Microsoft’s forward price/earnings ratio is near Apple’s, and it has a higher-than-average dividend yield: 2.7%, vs. 1.6% for its information-technology peers. That means investors are paid well to hold the onetime personal computing champion and wait for a turnaround. With the release of Windows 10, that reversal may be one step closer.

Read Next: Who Will Win the Battle of the Tech Titans?

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