Scale Is The Game & Amazon is WINNING
The web game is different than bricks and mortar. On the Internet scale is what matters. Doubt that? Look at Amazon's amazingly quick catch-up on social media marketing. From laggards to Kings:

* 22M Facebook Likes.
* 1M Twitter Followers.

* Traffic Rank #5 (US where lower is better).

* 1M inbound links.
* 38M pages in Google.

Amazon doesn't care if it makes money on a particular product because they know scale creates money. Soon they will make more money from their web services than from selling goods.

Amazon had to build a vast network of warehouses and servers. Once that network was built it presented a new revenue opportunity - Amazon web services. Amazon knows they don't find that new pot of gold without their aggressive actions on merchandising and creation of their partner network.

Amazon also knows the people who make the real money in a gold rush are the merchants supplying the shovels and tools. The shovel and tool business is always good as long as merchants are smart enough to know when one thing is almost over in order to move on to the next.

Unfortunately for all Amazon, largely thanks to the Wall Street roots, seems adroit at knowing when to pivot, twist and what dance will be next. Bezos' Wall Street thinking where everything is an arbitrage and you diversify your portfolio, act fast and think long term has helped the company to rule the web.