Amazon.com Inc. (NASDAQ:AMZN) may be the biggest fish on the market when it comes to attracting potential investors, but there’s a reason Warren Buffet may not think twice about investing in the e-commerce giant. The reason is simple: Warren Buffet is not fond of companies which are consistently switching between products or segments. In an interview, Warren Buffet insinuated that Berkshire Hathaway Inc (NYSE:BRK.A) isn’t inclined towards companies that try to go beyond their specialty. Such companies usually get overwhelmed and suffer losses, or in the longer run, simply burn out.

Amazon.com, Inc (NASDAQ:AMZN) is a veteran in the retail market. The company made its name by offering comparative lower prices and excellent customer service. Recently, to gain leverage over competitors, Amazon.com, Inc (NASDAQ:AMZN) ventured into unchartered territories, such as smartphones manufacturing. Google (NASDAQ:GOOGL)’s rising power in the smartphone market was perhaps making Amazon.com, Inc (NASDAQ:AMZN) uneasy, but Amazon.com, Inc (NASDAQ:AMZN)’s naïve move into the smartphone market with its Fire Phone left the company with a bundle of heavy losses. That gives Buffet one more reason to distrust the company’s spending policy.

Amazon.com Inc. (NASDAQ:AMZN) poured $170 million into its Fire phones and spent extra 83 million dollars on its books, not to forget, the tons of money spent on marketing and advertising. Amazon.com Inc. (NASDAQ:AMZN) is still recovering from the losses occurred due to the Fire Phone, even though it isn’t a complete failure.

Although, it’ll be unfair to say that Amazon.com Inc. (NASDAQ:AMZN) has been hasty in its decision to venture into unknown segments, it still depicts an uncertain picture for Warren Buffet who has made his name by associating himself with steady stocks. Amazon.com, Inc (NASDAQ:AMZN) has been successful in areas like Kindle; it isn’t the best on the market but it’s not downright bad either.

Warren Buffet, in a letter to the shareholders, emphasized that companies should be well in the perimeters of their competence. Any company that is eager to go beyond its boundary won’t have the blessings of Buffet’s Berkshire Hathaway Inc (NYSE:BRK.A).

Just because Amazon.com Inc. (NASDAQ:AMZN) isn’t in the ‘favored’ list of Warren Buffet, doesn’t mean Amazon.com Inc. (NASDAQ:AMZN) is a failure. Amazon.com Inc. (NASDAQ:AMZN) isn’t a failure at all; in fact it is one of the leaders in the retail market. But it can make its finances more formidable if it keeps expanding on its retail business, rather than plunging itself into new categories.

Even if Amazon.com Inc. (NASDAQ:AMZN) wants to indulge itself in new categories, it should do so on the basis of strong research. Fire Phone flopped because of loopholes in the research department. Smartphone market proved to be too overwhelming for Amazon.com Inc. (NASDAQ:AMZN). It should be a learning curve for Amazon.com Inc. (NASDAQ:AMZN). Most analysts think that the company should stick to its original business; introduce innovations and sharpen the comparatively stronger areas, which in the longer run would prove to be more lasting and formidable, as compared to the relatively newer areas Amazon.com Inc. (NASDAQ:AMZN) is trying to get into.

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