This was an earnings week for Amazon, and the earnings didn’t make everyone happy.

The numbers are huge, but they didn’t match expectations.

• EPS: $5.22 vs. $5.57, according to analysts surveyed by Refinitiv

• Revenue: $63.4 billion vs. $62.5 billion, according to Refinitiv

• AWS: $8.38 billion vs. $8.5 billion, according to analysts surveyed by FactSet

One culprit: more than a promised $800 million spent in the second quarter to get infrastructure ready for one-day shipping. I mean, one-day shipping is going to cost a lot. So, Amazon is going back to its old message of eschewing short-term profits in favor of long-term growth.

I think part of the problem might be that this isn’t just a message of Amazon’s, something they dangle for the rubes, but a guiding business philosophy. And that’s something that Wall Street understands, but only up to a point. You sell out at a loss for a while, crush your competition, and then you squeeze everybody — that’s what Wall Street understands. Amazon is a little more radical than that. The squeezing, it comes, but there’s no safe phase where we know what Amazon’s ordinary profits are. It’s always building to get on to the next thing.

Sour Grapes

Ben Thompson wonders whether the next thing is worth it. One-day shipping doesn’t get you that much more than two-day shipping, and it still doesn’t beat a ride in the car for something you absolutely need ASAP.

AWS is also not growing as fast as the rest of the cloud sector, and some of that might be because of the way Amazon is tooled and might be because Amazon competes with so many other businesses that companies are reluctant to put all their eggs in the AWS basket. Here’s one full-throated case for why Amazon should spin off AWS (although the author doesn’t think they’ll do it); here’s one very sotto voce case for splitting up Amazon (not so much a case as a repetition of a phrase, Amazon should explore whether it should remain a single company).

I don’t know. Amazon has managed to create a very diversified business that nevertheless all fits together. The profits from one sector help pay for investments in others. You could probably build a successful set of companies based on the pieces of Amazon, but it wouldn’t be Amazon. Barring an antitrust-motivated breakup, I don’t see why it should happen.

The DOJ is Coming, and other Bad News

Then again, nuttier things have happened, and the Department of Justice and the US Congress is coming for Amazon, along with its tech giant friends. That’s hanging over Amazon as well, and is another reason why the missed-expectation earnings were magnified.

Congress is going to want to know how a former AWS employee was able to hack over 100 million people’s data from Capitol One’s AWS server. Investigators are going to want to know how Amazon managers used eBay’s own messaging system to poach eBay sellers off its platform. Customers and reporters are going to want to know more about Amazon’s secret deals with police departments to promote Ring home surveillance systems, that require police departments to get statements from Ring whenever they say anything in public.

There Is Some Good News, Right?

It’s an enormous company. There’s always some “good” news for Amazon.

• The numbers show that Amazon is continuing to cut into the Google-Facebook online ad duopoly. Amazon should reach 8.8% of all digital ads by the end of the year.

• Amazon signed a breakthrough multibook deal with star author Dean Koontz that, if it works, could change publishing. Is the tipping point to all-digital, no-middleman services one big success away?

• Amazon has started cracking down on retailers who use too much packaging, specifically too much cardboard. Everything’s moving towards streamlined, low-waste shipping.

• The Lord of the Rings series has set its full creative team of writers, producers, designers, and such. I have a feeling this is going to be a big show for Amazon, the Amazon Prime flagship, and a lot rides on its success.

• In public, the Amazon Prime team is doing everything to deny anything of the sort, saying they’re just looking for quirky genre hits that don’t drive volume but delight their fans. Yeah, sure. Still, it’s a nice position to be in.

• Amazon’s not done with the grocery business yet. There’s something else, not a Whole Foods, not an Amazon Go, that is the Amazon platonic ideal of a grocery store. And we’ll just have to wait and see until we get it.

• You can watch a new Amazon warehouse being built. Yay? (Maybe your kids will like it?)

Okay, this is too many bullet points.

Thanks for reading, and we’ll see you next week.