Doesn't this contradict your previous comment? How exactly do they "undercut everyone and go for long-term market share domination"?
I actually think AWS is profitable and while they might not have recuperated their initial datacenter investments, they do cover the accounting depreciation (which is all that matters).
They undercut everyone offering the same product. Rock-bottom hosting that might stay up and might have customer service available sometimes is not the same product.
Maybe I have a hard time understanding this, but the whole discussion was how Amazon undercuts their competitors and runs the business with a small loss because they are looking at the long-term game.
Saying that Amazon sells you customer service seems entirely unrelated. Yes, the might have better customer service and they might have more things (EBS, Route 53, etc) but they certainly do not undercut their competitors price-wise.
I actually think AWS is profitable and while they might not have recuperated their initial datacenter investments, they do cover the accounting depreciation (which is all that matters).