The Journal.
Alexa is in Millions of Homes and Amazon is Losing Billions
Jul 31, 2024
Dana Mattioli, a WSJ reporter, dives into the intriguing world of Amazon's Alexa, revealing surprising financial truths. Despite 500 million devices in homes, Amazon is bleeding billions. Her investigative reporting exposes how clever accounting has hidden these staggering losses. The discussion covers the challenges Alexa faces in voice shopping, including confusing interfaces and ad monetization woes. With leadership changes and a focus on profitability, the future of Alexa hangs in the balance, raising questions about its sustainability.
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Quick takeaways
- Amazon's Alexa devices have accumulated over $25 billion in losses since 2017, raising concerns about the company's profitability strategies.
- Despite widespread adoption of 500 million units, Alexa has failed to monetize effectively due to user engagement primarily in non-revenue-generating tasks.
Deep dives
The Financial Burden of Alexa
Amazon’s Alexa devices have incurred significant financial losses, amounting to over $25 billion from 2017 to 2021. Despite the widespread adoption of these devices, which number over 500 million globally, they are not generating any profit for the company. The initial strategy focused on getting the products into consumers' homes with an emphasis on future monetization, which has not materialized as planned. These losses have become a pressing concern for Amazon as it seeks to rectify its approach and improve profitability within its devices division.
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