Amazon grew its business in 3Q14 through several initiatives

Puneet Sikka - Author
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Dec. 4 2020, Updated 10:51 a.m. ET

Amazon continues to grow its revenues at a healthy rate

In the previous part of this series, we discussed why Amazon (AMZN) could take an operating loss in the third quarter as the company makes a number of investments to grow its business. But Amazon expects its revenue to grow at a mid-point of about 21% in the third quarter. As the chart below shows, the revenue growth of 21% is slightly slower than the previous quarters. Yet this growth is still healthy and better than eBay’s (EBAY).

Amazon took a number of initiatives in the third quarter

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During the third quarter, Amazon made a major acquisition of Twitch for $970 million. Twitch is a popular website for video game enthusiasts who want to broadcast their video games to other people or watch other people play video games in real time. Twitch drives the highest live video streaming volume in the U.S. with a share of 44%, according to a report from Qwilt. We discussed various aspects of this deal and how Amazon plans to take on Netflix (NFLX) and Google (GOOG)(GOOGL) in an earlier Market Realist series titled Must-know: Amazon buys Twitch to take on Netflix and Google.

During the third quarter, Amazon also cut its Fire smartphone prices ahead of Apple’s (AAPL) iPhone 6 launch. Amazon decided to slash the price of its smartphone to just 99 cents with a contract from the earlier $199. Amazon is also reportedly planning to develop its own software to place ads online, similar to Google’s AdWords program. Then more recently, to tap the vast physical retail market, Amazon introduced a mobile credit card reader. In this market, Amazon will undercut Square and eBay (EBAY) with lower processing fees.

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