Amazon Business Expanding: Going After Massive Growth

It seems that despite first quarter earnings showing decreased income for Amazon, business is expanding and this appears to be the time that the company is going after massive growth. Sales were up by 38% although income was down, largely due to the expenditure involved in a hiring drive along with operational expenses increasing.

The figures make for interesting reading and no doubt investors may have concerns at present but looking ahead this expenditure could be the right move at the right time. Net sales for Q1 in 2011 were $9.86 billion compared to $7.13 billion in the same time frame last year. Net sales were also higher than Wall Street analysts predicted. However at the same time expenses rose from $6.74 billion for Q1 last year to $9.54 billion this first quarter, according to Ben Parr over on Mashable.

Profits for shareholders were therefore lower than forecast at 44 cents per share rather than the 61 cents predicted by analysts and in after-hours trading Amazon was down 0.71%. Hiring costs accounted for a heavy part of Amazon’s expenditure as the company has increased its workforce by an amazing 45% during the last year and now has 37,900 employees. However the extra staff were necessary to keep up with the speed that Amazon are producing new products, such as its Cloud Player, an ad-supported Kindle and its own app store.

Developments are being continuously put in place by Amazon, and the company is obviously seizing this moment to ignore short-term earnings and continue it’s growth with rapid expansion, even though this means it now also faces further competition from the likes of Apple, Google and Microsoft.

What do you think of Amazon’s tactics to run with expansion for now and endeavor for long-term growth? We’d still imagine that Amazon is a pretty good bet and investors would do well to have faith. Let us have your comments on this.