Amazon (Nasdaq: AMZN) last week reported its fourth quarter results, which yet again surpassed all estimates. Its unsurpassed excellence in e-commerce as well as the cloud keeps it in perpetual high gear. The most exciting news from the company, however, is that Amazon is getting into the health insurance business.

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Amazon’s Financials

Amazon ended the year with net sales growing 31% to $177.9 billion. Net income increased 25% to $3 billion or $6.15 per diluted share. Operating income decreased 2% to $4.1 billion.

Amazon’s fourth quarter revenues grew 38% over the year to $60.5 billion, ahead of the market’s expectations of $59.83 billion. Net income increased 1.5 times to $1.9 billion or $3.75 per share from $749 million or $1.54 per share a year ago.

Operating income increased 69% to $2.1 billion, compared with $1.3 billion a year ago.

By segment, net product sales increased 35% to $41.3 billion and net service sales increased 46% to $19.1 billion.

AWS revenues grew 46% over the year to $5.1 billion or about 8.4% of total revenue and beat estimates of $4.97 billion. AWS generated operating income of $1.35 billion, 64% of the total operating income of the company.  According to KeyBanc analysts, AWS lost market share to Azure in the fourth quarter. From 68%, AWS share slipped to 62%, while Azure’s share increased from 16% to 20% and Google’s share increased from 10% to 12%.

Revenue from subscription services like Prime increased 49% to $3.2 billion. Revenue from online stores grew 20% to $35.4 billion while revenue from physical stores, chiefly from its stores from the Whole Foods acquisition, was $4.5 billion, up from $1.3 billion in the third quarter. Revenue from third party seller services including commission, fulfillment, and shipping fees grew 41% to $10.5 billion.

For the first quarter, Amazon expects sales to grow 34%-42% to $47.75-$50.75 billion versus analyst estimate of $48.6 billion. Operating income for the quarter is expected to be $300 million-$1 billion below analyst estimate of $1.5 billion.

Amazon’s New Offerings

During the quarter, Amazon shortlisted 20 North American cities for its second headquarters. It expects to invest over $5 billion and create as many as 50,000 high-paying jobs at the new office. Amazon hired nearly 130,000 employees globally in 2017, excluding acquisitions.

AWS launched new regions in France and China during the quarter. It plans to open 12 more Availability Zones across Bahrain, Hong Kong, Sweden, and a second GovCloud Region in the US by 2019. AWS now operates 52 Availability Zones across 18 infrastructure regions globally.

AWS introduced four AI services that allow developers to build applications that emulate human-like cognition: Amazon Transcribe for converting speech to text; Amazon Translate for translating text between languages; Amazon Comprehend for understanding relationships and finding insights within text; and Amazon Rekognition Video, a deep-learning powered video analysis service that tracks people, detects activities, and recognizes objects, celebrities, and inappropriate content.

AWS also launched Amazon Sumerian, which enables developers to easily build virtual reality, augmented reality, and 3D applications to run on mobile devices, head-mounted displays, digital signage, or web browsers. It also launched Alexa for Business, to help employees be more productive and organized on both personal and shared Echo devices by simply using their voice.

Amazon dominates the e-commerce marketplace, leaving only niche areas for startups to innovate in. But not for long. During the fourth quarter, Amazon launched two furniture brands: Rivet for affordable furniture and Stone & Beam for stylish modern furniture.It also opened checkout-free store Amazon Go to the public in Seattle.

In a big move last week, Amazon announced a partnership with Berkshire Hathaway and JPMorgan Chase to create an independent non-profit company to cut healthcare costs and improve healthcare services. Its initial goal is to create technology solutions to simplify the health-care system for their 1.1 million employees, their families, and, then potentially, all Americans.

The fact that Amazon, an execution machine, is attempting to disrupt another big industry is exciting. Global health care spend is expected to reach $8.7 trillion by 2020. Bsed on 2011 data, US spends 17.2% of its GDP or $8,608 per capita on healthcare. The market value of the top healthcare companies tanked by $30 billion following this announcement.

Questions for the Amazon Board

About 75% of all ebook sales and 44% of all online sales can be attributed to Amazon. While its monopoly in e-commerce is not harming consumers as much of its dominance is due to the heavy discounts it offers, it has made it awfully tough for startups to compete and disrupt. Critics also point out that while it offers discounted and services that appear to be free, users “pay” for them by giving away their data. This data enables them to merchandise with precision, something smaller players are unable to match.

How will Amazon handle these concerns? Is it ethical to funnel the profits from its cloud business to offer heavy discounts in its e-commerce marketplace while smaller players struggle to innovate and compete? Will it consider suggestions that it should spin out AWS, Amazon Prime Video, and Amazon marketplace?

In summary, will Amazon self-regulate, or will it allow governments to impose regulatory measures to address some of these criticisms?

Amazon’s stock is trading at $1390 with a market capitalization of $669 billion. It touched a record high of $1498 following the results. It hit a 52-week low of $803 in February last year.