Why Is Amazon's (AMZN) Net Income Since '97 Less Than Facebook's in 2 Years?
A tale of two tech giants and how their bottom lines stack up.
— -- In a tale of two companies, the earnings reports of Amazon and Facebook this week show how the tech sector is playing out in vastly different ways, depending on what kind of services they offer.
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Amazon, which has been a publicly-traded company since 1997, reported a much larger loss than Wall Street had expected on Thursday, leading to a slumping stock price today. With roots in Seattle, the company says it is investing heavily in new products, such as the Fire smartphone, which starts selling today.
Amazon's net income since the company went public is less than Facebook's net income in the two years since the Menlo Park, California-based company's IPO. In contrast to Amazon, Facebook does not produce any consumer hardware, nor is it burdened with expanding its physical infrastructure to deliver goods.
Facebook's profit totals about $5 billion since its second quarter of 2012, the first quarter following its IPO, according to its earnings reports. Amazon's total profit since 1997 is $3.1 billion, though the company's accounting methods vary in some of its quarters, according to financial data firm FactSet.
And while the precise accounting may differ, the varying bottom lines of the two tech giants show the different challenges each face -- with Amazon investing heavily in infrastructure.
The social media company reported soaring earnings and sales on Wednesday, spurred by a growth in users and mobile advertising revenue.
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"Amazon's last three or four years have been more characteristic of a heavy investment cycle," said RJ Hottovy, analyst with Morningstar.
Amazon CEO Jeff Bezos has repeatedly said he doesn't intend to make money off devices like the Kindle Fire, instead opting to make money off the content people buy on them.
Hottovy said Amazon's long-term potential overshadows things like the company's most recent earnings announcement. The company is still reporting an acceleration of Amazon Prime users and a growth in vendors who sell on Amazon.com.
Amazon did not respond to a request for comment by ABC News. Facebook confirmed its profit history but declined to comment further.