Pandora, Amazon: Sister Success Stories
Companies with this mindset go through periods of investment and reinvestment that often drag on the near-term bottom line. It's all about assuming the proper strategic-competitive position for the future.
A look at the AMZN and P charts, courtesy of Yahoo! Finance, followed by a quick dip into the archives proves instructive.
While not carbon copies, similarities certainly exist between the two charts. With AMZN gyrating wildly back in 1999 -- like P does today, but at a lower price per share -- Bloomberg Businessweek conducted a Q&A with Amazon CEO Jeff Bezos. This exchange looks a lot like the ones Pandora executives have with reporters on a daily basis:
Q: Do you have a goal for when you can throttle back on expenses and become profitable?
Our strategy is very, very clear: We're focused on long-term returns for investors. And to throttle back on investment now would be shortsighted. When we have less opportunity, that will probably happen. But as long as we have lots of opportunity, we're going to continue to invest commensurate with that opportunity in a very disciplined and methodical way, but in a long-term context. To do anything else, we believe, is irrational.
But we also don't claim that that's the right strategy. We just claim it's ours. And then people get to decide. But we're clear about it. And we do passionately believe it's the right strategy.
Make no mistake about anything I've said here: Long-term profitability and building an important and lasting and sustained company is incredibly important to us. We just believe that, by investing now, we increase our chances of achieving those things.
And, of course, two years later reporters across the land, including one from Fortune, asked the same question bears ask today about Pandora: Can Amazon Be Saved?