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Alexa had "no profit timeline," cost Amazon $25 billion in 4 years (arstechnica.com)

submitted 3 months ago by [email protected] to c/[email protected]

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Amazon is known to have sold Echo speakers for cheap or at a loss in the hopes of making money off Alexa later. In 2019, then-Amazon Devices SVP Dave Limp, who exited the company last year, told WSJ: "We don’t have to make money when we sell you the device." WSJ noted that this strategy has applied to other unspecified Amazon devices, too.

People tend to use Alexa for free services, though, like checking the weather or the time, not making big purchases.

"We worried we’ve hired 10,000 people and we’ve built a smart timer,” a former senior employee told the WSJ.

Amazon is now banking on the impending release of a subscription-based gen AI Alexa to finally drive profits. The idea is that people will be willing to pay a recurring fee to use Alexa if it can do more advanced things, like perform multiple commands without the user having to say "Alexa" repeatedly, be more conversational, and manage smart homes more intuitively. Amazon is considering charging $5 to $10 per month for generative AI Alexa, Reuters reported in June.

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[–] [email protected] 24 points 3 months ago (1 children)

Amazon is now banking on the impending release of a subscription-based gen AI Alexa to finally drive profits.

Didn't they lay off almost the entire Alexa research team in 2022? Lmao. I love how this story of incompetent management has another incompetent management storied embedded within.

[–] [email protected] 29 points 3 months ago (2 children)

It was never about profit it was always about getting people to voluntarily install Spyware devices in their homes. I'm sure the massive amounts of data they collected was the point

[–] [email protected] 10 points 3 months ago

We live in such a bizarre time. A Bezos-like character couldn't have been a villain in an episode of the "Twilight Zone". Even the reality of that show - audiences of that era would have thought the character utterly ridiculous and the situation cartoony. How could an evil man even in the far off future of 2024 amass ~$2 billion (adjusted for inflation), have worker-serfs, spy on 10,000,000s of Americans, have a $50m toy - his yacht, etc.

[–] [email protected] 9 points 3 months ago* (last edited 3 months ago)

It was about profit. The executives envisioned a future where everybody would use their Alexa devices to do all their shopping off Amazon

Some dumb shit where they probably all have personal shoppers and thought the proles would love an AI version of that

Amazon already has the data the devices could've collected thanks to Google and Meta

[–] [email protected] 10 points 3 months ago* (last edited 3 months ago) (1 children)

Commies when a company tries to innovate novel products without caring whether they profit or not maddened

[–] [email protected] 2 points 3 months ago

That's a funny thing about this, they were treating Alexa as if it was profitable by using a stupid metric of profitability. They were using a system that attributed to the Alexa team any increase in purchases after buying Alexa, even if they weren't purchased using Alexa.

This was a self fulfilling prophesy because they gave deeply discounted Alexas to prime subscribers, who they know purchase more from Amazon. Surely lots of people got prime just to get the discount, then the Alexa team got credit for the increase in sales that comes when people have prime.

[–] [email protected] 9 points 3 months ago

yeah officially, in reality probably wholely financed by the CIA & co.