Here [1] we see that Amazon's (The Conglomerate's) profit was $513M.

In the same article, we're told:

The operating income for A.W.S. more than tripled in the quarter to $604 million.

Therefore, the conglomerate made $513M, and separately, a subsidiary company, AWS made $604M. This means that other parts of the conglomerate lost a total of $91M

Here's the 5 year old version.

If your family harvests 10 bananas, and you harvest 6 of them, and your family gives away 5 of them, you contributed more than your family kept.

[1] http://www.nytimes.com/2016/04/29/technology/amazon-q1-earni...

I'm not an accountant, but when I want to understand corporate finance technicalities, I'll look up the definitions on investopedia.com. They do a pretty good job of putting them into "layman speak." Revenue is what you think it means[0]: 10% of all the cash Amazon took in over a given period was from AWS. Operating income is "a synonym for earnings before interest and taxes"[1].

So, in effect what they're saying is that AWS is so profitable that it has been subsidizing loss-centers in Amazon's business.

Edit: I should add that Amazon has a history of not turning a very large profit (if at all), and instead choosing to re-invest income on growth and R&D. So the behavior itself is not all that newsworthy, it more just speaks to the importance of AWS.

[0] http://www.investopedia.com/terms/r/revenue.asp

[1] http://www.investopedia.com/terms/o/operatingincome.asp

What it actually sounds like is that AWS is not a focus of the reinvestment in R&D Amazon is famous for. Whether it's unusual in this respect, or whether this is typical of established business units and they focus R&D on new opportunities, I don't know.

Maybe? That didn't automatically follow for me - the "more than 100%" is pretty vague. Could it not also hypothetically be that some of the AWS unit's profit gets reinvested into AWS, thus bringing down the absolute value for operating income whilst not violating the percentage relationship?

Amazon is printing money with AWS, and using that money to continue running the retailing side of the house at a loss.

How much of Amazon's AWS revenue does Google need to eat up for Amazon to no longer be able to subsidize the consumer logistics side of the house?

Amazon lost money for a long time and both private and public investors were fairly forgiving. More importantly, GCP is not "eating up" Amazon's revenue. Both are growing very fast because the entire market is growing very fast.

> Both are growing very fast because the entire market is growing very fast.

There is a limit though. There's only so much compute and storage required at current prices.

That's easy.

They are picking up enterprise customers left and right. The strategy there is easy.. just go up the stack and peddle solutions built on AWS. Oracle makes billions selling crap the customer never install, much less use.

Bezos speaks Wall Streets language and will get away with making little for many years.

The grocery business is a huge push that will require much broader capital investments over a huge geographic footprint. They will be back to losing money soon enough.

I'm not an expert, but this page may help...

http://www.investopedia.com/ask/answers/122714/what-differen...

Whilst I don't understand how something can be 'more than 100%' of operating income, I do understand the gap between revenue and operating income being described can exist if other parts of the business are operated as loss leaders (i.e. they don't make profit on everything they sell).

It means that Amazon's retail operation is not turning much of a gross profit, but AWS is.