Tuesday Night Links

• One argument against Amazon is that it is investing for a revenue volume that will never come. That's a different argument, to me, than saying its business model isn't profitable. And even on that point, you can chart its quarterly revenue for yourself and tell me if it looks like it's flattening out.  Though it has not always been on an exact upward sloping curve (we can expect the curve's slope to adjust up or down as various lines of its retail business mature or accelerate depending on Amazon's market share and traction in each line), the long term arc bends up like the corner of a world-dominating smile. [Eugene Wei]
• Knowing the numbers isn't enough in and of itself, but as books like Moneyball make clear, doing so can reveal hidden truths, unknown vectors of value (for example, in the case of Billy Beane and the Oakland A's, on base percentage). To this day, people still commonly talk about Amazon not being able to turn a profit for so many years as if it is some Ponzi scheme. Late one night in 1997, a few days after I had started, and about my third or fourth time reading the most recent edition of the Analytics Package cover to back, I knew our hidden truth: all the naysaying about Amazon's profitless business model was a lie. Every dollar of our profit we didn't reinvest into the business, and every dollar we didn't raise from investors to add to that investment, would be just kneecapping ourselves. The only governor of our potential was the breadth of our ambition. [Eugene Wei]
• Upon taking over from Tavares in 2025, Filosa convened a series of strategy meetings at U.S. headquarters in Auburn Hills, Mich., just outside Detroit. One presentation included an all-black slide. The only words were a date–June 15, 2021. It was the day the company decided to remove the Hemi from some vehicles. [WSJ]
• Currently, the real yield offered on 30-year TIPS at the market price is higher than at any time in the last several years, getting to over 3%. That high yield is also coming at a time when stock index valuations are still elevated, making the relative attraction of that long-term yield more competitive with equities than is typical. [WSJ]
• Any stream, from the littlest brook to the mightiest river, has a length that’s proportional to its drainage area raised to the power of 0.6. (In symbolic form: L ~ A0.6.) [Hack's law] 
• The territory was acquired in 1890 by German South West Africa in order to provide access to the Zambezi River and consequently a route to the east coast of the continent and German East Africa. The route was later found not to be navigable because of the location of the Victoria Falls, one of the world's largest waterfalls. [Caprivi Strip] 
• Internet advertising has been the fastest growing advertising channel in recent years with paid search ads comprising the bulk of this revenue. We present results from a series of large scale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase behavior are correlated, we show that returns from paid search are a fraction of conventional non-experimental estimates. As an extreme case, we show that brand-keyword ads have no measurable short-term benefits. For non-brand keywords we find that new and infrequent users are positively influenced by ads but that more frequent users whose purchasing behavior is not influenced by ads account for most of the advertising expenses, resulting in average returns that are negative. [NBER] 
• No matter how we configure the selection process, however, the problem of the resulting elite becoming insular and self-serving appears to be a chronic one. In a long book review of Soner Cagaptay’s The New Sultan (2017) on Turkey’s president Recep Erdogan, Alexander argued that domination by elites is virtually tautological. People who are bright, ambitious and, when necessary, ruthless will figure out what it takes to get on top, and then take the necessary steps. Hoping for a different kind of elite, such as one dominated by the self-effacing and reflective, is a waste of time. [The Political Contradictions of Trumpism] 
• Senator Joseph McCarthy famously asked, “Who lost China?” A credible answer would include the following obvious counterfactuals: with less indulgence from New Deal liberals, with sustained military aid rather than an unwarranted military embargo, with a press corps that preferred an imperfect and semi-democratic China to totalitarian Communism, republican China—and thus the best Chinese traditions plus a modicum of liberty—might have endured. China would have escaped what Dikötter calls “The Tragedy of Liberation.” This is the great theme of his major trilogy. [Red and Dead]