Times are rough for Amazon.com. Its stock has dropped 27 percent this year, as earnings have fallen short of Wall Street expectations; its Fire phone is a flop thus far; and its public image has taken a hit from its dispute with Hachette publishing.
But CEO Jeff Bezos makes no apology for Amazon's business model.
"One of my jobs is to encourage people to be bold. It's incredibly hard," he tells
Business Insider founder Henry Blodget. "Experiments are, by their very nature, prone to failure. A few big successes compensate for dozens of things that didn't work."
He cites Amazon Web Services, Kindle, Amazon Prime and the company's third-party seller business as examples of bets that did pay off. "They pay for a lot of experiments. I've made billions of dollars of failures at Amazon.com. . . . None of those things are fun, but they also don't matter."
And what does matter?
"Companies that don't continue to experiment, companies that don't embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence." Bezos says.
Morningstar analyst R.J. Hottovy is concerned with Fire phone's losses. But he remains bullish on the company.
"We still consider Amazon to be one of the most disruptive forces in the retail market today and believe the building blocks of our longer-term margin expansion assumptions are still in place, including Prime memberships, Amazon Web Services and Fulfillment by Amazon," he writes on Morningstar.com.
"We view the shares as undervalued." Hottovy sees fair value at $375. Amazon closed at $297.73 Thursday.
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