Amazon mum on EC2, S3 spending

Summary:While Amazon delivered a blow-out quarter it remains quiet about detailing how much it is spending on the fast-growing EC2 and S3 Web services. On the first quarter earnings conference call, Bear Stearns analyst Robert Peck tried to pin down Amazon (AMZN) executives on the capital spending issue for 2007, but CEO Jeff Bezos didn't bite.

While Amazon delivered a blow-out quarter it remains quiet about detailing how much it is spending on the fast-growing EC2 and S3 Web services.

On the first quarter earnings conference call, Bear Stearns analyst Robert Peck tried to pin down Amazon (AMZN) executives on the capital spending issue for 2007, but CEO Jeff Bezos didn't bite.

Regarding EC2 and S3 spending, Bezos noted "we do not break it out." "We are seeing very strong demand for those services and expect to continue to roll out new capacity for them," he said. "We have been adding new capacity for those services and I expect that to continue indefinitely."

What's notable about Amazon's Web services is that they have the potential to be bigger than the retailing business. Meanwhile, analysts seem to be getting the message--as long as Amazon delivers strong financial results.

How big can Amazon's Web services become? It's unclear, but 5 million objects stored isn't a bad start.

Bezos:

I think we are really on to something, given the early initial traction. This is new customer stuff for us. We have been working on it for just a couple of years now, and there are already a very large number of developers using these services. We have gotten very positive feedback from them. We keep enhancing the services. The team here at Amazon that is working on these web services is super passionate about this, very, very excited.

When asked how big Web services will be relative to Amazon's core retailing business, Bezos noted it takes a long time to grow a business. But he did add that the "market sizes are potentially large."

As long as Amazon can balance its spending on Web services with strong results from the retailing business Wall Street will be patient with Bezos' initiatives.

Topics: Amazon

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.