Question for Jeff Bezos: How Is Amazon Doing?

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Lost in the frenzy of news coverage about the purchase of the Washington Post Company's (WPO) flagship by Amazon.com Inc. (AMZN) founder Jeff Bezos is whether Amazon itself is doing well. There is at least some evidence that the answer is no.

So far this year, Amazon shares barely have outperformed the S&P 500. The stock of also-ran electronics retailer Best Buy Co. Inc. (BBY) has done better, although some would argue that the bricks-and-mortar public corporation was operating so poorly that its shares had nowhere to go but up. However, Best Buy is not alone. The stock of well-run Costco Wholesale Corp. (COST) has done almost as well as that of the world's largest e-commerce company.

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The standard argument about why a company as well-run as Amazon has not performed better in the market is that Bezos does not mind investing in the future of Amazon. The company's second-quarter sales were up 22% to $15.7 billion. Anyone who follows the market knows that Amazon lost $7 million in the same period.

The reason for skepticism about Amazon's prospects and its future profitability are fair and, in some cases, compelling. Its white-hot Kindle and Kindle Fire are each threatened. The Kindle itself has been challenged by the fact that fewer and fewer people want e-readers. More powerful tablets can fulfill the same function and act as computers, as well. The Kindle Fire competes with these tablets, and the market has become flooded, particularly with products from Apple Inc. (AAPL) and Samsung. And the flood is growing, as nearly every large PC maker looks to the growing market as a source of new sales.

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Another of Amazon's competitive worries is that its streaming video products face hard competition from companies that range from Apple to Netflix Inc. (NFLX). Even cable companies, with tens of millions of captive subscribers, offer related products, as do the fiber-to-the-home products from AT&T Inc. (NYSE: T). Amazon has the advantage of selling to a customer base that numbers in the many tens of millions. However, its product is not much different from others on the market.

Amazon also is considered a leader in the App Store for Google Inc. (GOOG) Android applications. It may be a leader, but it has to compete with Google's own app store, and Apple's, which is aimed at its army of iPhone and iPad users.

The biggest Bezos bet on Amazon's future has almost nothing to do with the consumer, however. Amazon Web Services (AWS) is among the largest cloud-based enterprise operations in the world. Its complex groups of products have been aimed at both the very largest companies in the world and small operations that can use the most modest products of AWS for free. But the competition for the products is growing, among both giants like Google and Microsoft Corp. (MSFT) and many smaller companies, such as Rackspace Hosting Inc. (RAX), which offers public and private cloud product applications.

Bezos says he will spend almost no time with his new toy -- the Washington Post. That better be true. He has a large number of problems at home.

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