Amazon vs. Microsoft: Breaking Down the Profits

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Oct. 24 (Bloomberg) -- Bloomberg senior West Coast correspondent Jon Erlichman breaks down the financial pictures at Microsoft and Amazon as both tech titans are set to report results later today after the bell. He speaks on Bloomberg Television’s “Bloomberg West.”

Here are two companies we talk about so frequently on bloomberg west, and yet they could not have more different financial stories.

Let's start with microsoft.

It gets kicked all the time.

There are worries about its future, but here is a company that consistently has been generating between $5 billion and $6 billion in profit.

Compare that to the amazon story.

You've got to replace b's -- replace billions for millions.

And two of the quarters, the company has actually lost money.

Take all that information and compare that to what is happening in the stock market where investors have a little bit more love over the course of the year for amazon than they have microsoft.

What is going on?

The story really has been that here is a company in amazon that is building for the future.

They spend a lot of money right now, which hurts the bottom line performance, but when the company performs its results, you have to look at how much revenue it is generating.

It could generate more than $17 billion.

Look for that number.

In the case of microsoft, it is what is happening with the windows unit.

How is the performance their?

We talk about the struggles the pc industry is facing and how that affects software sales.

Those are the two big things to watch for when each of the company's reports their latest results.

And both of these companies have dreams of hollywood.

What might we learn about that?

It is always nice to get these tidbits when executives speak every quarter.

You are right in the case of amazon.

Amazon is doing original shows, just like netflix does original shows.

At the end goal is to get people to shop more with amazon.

They get more people to subscribe to amazon prime.

And in the case of microsoft, here is a company that is also working on developing shows that would be available through xbox in a way to potentially drive more xbox sales.

The end goals may be a little bit different, but it is a similar idea.

Let's make shows that will ultimately lead to higher sales in our respective businesses.

Thank you.

It has been a busy time in

This text has been automatically generated. It may not be 100% accurate.

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