"Profit is something to worry about but Amazon at its core is a retailer," Mahaney said. "With Amazon you should expect single-digit operating margins, but when they get into other segments like ad revenue and Amazon Web Services then you see higher margins." Making Lemonade Amazon has largely given up trying to avoid collecting state and local sales taxes. But once again, it's turning lemons into lemonade. No longer minimizing physical presences to avoid tax issues, Amazon is building more distribution centers, close to big cities, as it pushes toward next-day and same-day delivery. The move still puts pressure on brick-and-mortar retailers to adapt. The company is also branching out into online grocery with its AmazonFresh service, available in Southern California, San Francisco and Seattle. Mahaney doesn't see a new online rival to Amazon in the next five to 10 years. "Amazon is extremely hard to replicate. It would be extremely expensive to set up distribution centers and master logistics," he said.