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As Amazon announced positive first quarter results yesterday, it also said that it plans to increase the annual membership fee for Amazon Prime in the US from $99 to $119. The increase will take place in mid-June for new members, and then will be phased in for existing members as their renewals take effect.

It has been four years since Amazon last raised the cost of Prime, from $79 to $99.

Amazon said that the increase is because of the greater number of features that Prime now offers. It also comes as the company has said that it now has 100 million Prime members globally, though it does not break out US numbers.

Prime gives its members guaranteed two-day shipping on more than 100 million products, as well as access to Prime Video and Prime Music streaming, and e-books.

Amazon yesterday said that its Q1 net income was $1.63 billion, up from $724 million a year earlier; revenue was up 43 percent to $51 billion, up from $35.7 billion a year earlier.

In addressing the positive performance, owner/CEO Jeff Bezos “singled out the performance of the company’s cloud computing business - known as Amazon Web Services, or A.W.S. - referring in a statement to a ‘remarkable acceleration’ in growth in the segment for a second consecutive quarter,” the New York Times reports. The Times also notes that “Amazon’s revenue received a big lift from the company’s acquisition of Whole Foods Markets last year. The company’s physical stores business, most of which is from Whole Foods, added $4.26 billion in revenue for the quarter.”
KC's View:
First of all, about the Prime membership increase. As far as I’m concerned, it is still more than worth it … though I am sure that there could be some losses when people start getting their renewal notices. I don’t think it’ll be much, though … largely because Amazon keeps adding value to the program.

As for the numbers … lots of folks kept arguing that Amazon was building a house of cards with nothing in the way of real profit. it has to be something of a disappointment to them when Amazon actually starts showing profit. The new argument probably will be that Amazon is making more money from web services than from retailing … which strikes me as a smart business model, not something to be decried as unfair or somehow illegitimate.