Price of Amazon Prime may jump to $99 or $119 a year

Amazon CFO Tom Szkutak hinted that the price of Amazon Prime may increase by as much as $40 next year.

Perhaps investors have had enough, because when Amazon released earnings yesterday that weren't quite up to part with analysts' expectations, shares of the world's largest e-retailer sank by nearly 10%. Money-wise, Amazon raked in a profit of $239 million on revenue of $25.59 billion with EPS coming in at $0.51. The folks on Wall Street, though, were anticipating EPS of $0.66 on revenue of $26.06 billion.

What's really strange is that if we look at Amazon's earnings during the same quarter a year ago, the company's reported holiday quarter income dropped by 45%, and yet shares shot up 9%. Indeed, Amazon's share price history might easily be categorized as investors completely ignoring Amazon's earnings results and sending the stock into the stratosphere.

So perhaps the recent stock tumble is a sign that investors are tired of their "wait-and-see" approach and want to see Amazon start generating huge profits.

That said, Amazon CFO Tom Szkutak hinted during the company's earnings conference call yesterday that we might see an increase to the company's popular Amazon Prime service. As it stands now, Amazon Prime costs $79 per year and offers users free shipping on millions of items, free book borrowing for select Kindle titles, and last but not least, free streaming to the company's video on-demand service. Going forward, Amazon may increase that pricepoint to either $99 or $119.

That's a rather significant price increase, but it's important to keep in mind that the price of Amazon Prime has remained the same ever since Amazon first started the program nine years ago.

Copyright © 2014 IDG Communications, Inc.

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