Netflix Looks Like a Loser and Feels Like a Winner

Years ago, before Amazon had become the internet’s 800-pound gorilla, there were many Wall Street analysts and journalists who viewed the company with extreme skepticism. I worked for Fortune magazine at the time, and we were among the doubters.

Our rationale was sound. Amazon's earliest product categories—books, movies and videos—were seeing a decline in revenue. It cut deals with a handful of companies that wound up going out of business. Even after the dot-com bust, its stock was overvalued by traditional measures. And most telling of all, because founder and chief executive Jeff Bezos was so insistent on plowing every spare penny back into the business, the company made no money. In one particularly biting 2001 story, we concluded that Amazon “will never be the high-growth, wildly profitable, super-efficient company of Internet lore.” Ouch.