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Amazon Makes a Profit
sofar writes: "Amazon finally makes a profit. Well, only $ 5mln, but maybe you can actually earn something on your stock now. At 1c a share it's no pension fund in Florida yet." I wonder how much of that profit represents 1-click licensing fees.
Just because Amazon turns a slight profit doesn't make your stocks worth anything.
In addition to raising money through sale of stock, Amazon has also raised money by selling bonds. Lots of bonds. The ammount of securities debt Amazon is carrying is far more than the total value of the company.
Now for the fun bit: when push comes to shove, bondholders get paid before stockholders. Always. The people who loaned the company will get paid back before the people who bought part of it. Now it's worth noting that the securities amazon.com has issued are trading at very low rates. They're junk bonds. The market thinks there's a good chance that Amazon will not be able to cover the interest payments on those bonds in the long term. If that happens, the shareholders get $0.00 from any sale of assets.
This makes Amazon.com a risky buy. Not as bad as VA Software, (people find Amazon's services useful afterall) but still risky.
--Shoeboy
And they have Linux to thank for it. According to this article Linux saved them $17 million. Therefore, if it wasn't for Linux, they'd be losing $12 million and they wouldn't have been able to keep their promises to Wall Street.
main(c,r){for(r=32;r;) printf(++c>31?c=!r--,"\n":c<r?" ":~c&r?" `":" #");}
Off-topic from article, but. . .
The latest issue of Wired has an interesting article on just how hard it is to make money selling porn on the Internet. The market is saturated, so new-comers are pretty much shut out.
Even the old dogs are having a difficult time making money. When sites like drbizzaro.com and its partners give away so much product for free, you have to offer a pretty compelling product, or cater to a very specific niche to make money.
obviously no deficiencies vs. no obvious deficiencies
I'm not impressed at all by a company that has had to spend several billion dollars to make a profit of $5 million. First of all, $5 million is peanuts, and the stated profit takes none of the infrastructure expenses they've been making for the last several years.
If I spend $10 billion on a factory one year, and make $5 million the next year after operating expenses, am I profitable? No way. Not until the $10 billion factory is paid for.
There was also few details given about the expense exclusions that have likely been included in the calculation. Let's see what the SEC filings have to say (they're not out yet).
And even still, a $5 million profit on a $10 billion+ investment is a pretty lousy return (rate = 0.05%).
this is proof that in an infinite amount of time, the quantnum probability of anything happening is at least 1
The story says the profit is net profit according to generally accepted accounting principles. (Of course the real scandal is that many companies are choosing to ignore GAAP in favor of the "pro forma" crap you discuss, but it doesn't apply here.)
sulli
RTFJ.
So what is the cost to you for that good book service. Amazon's patents are exactly why I do not order from them. I did order from them alittle over two years ago and yes they are excellent at what they do. That said, noway am I buying from them. There agressive patent tactics leave me feeling dirty when at there website.
Just my view.
How many internet companies (where it matters not to the customer where you are) do you think would have been doing much better if they had not headquartered in high-priced tech centers like Seattle and San Francisco?
There is a recent story here about Amazon's future.
It talks about Amazon making its way to open real stores and even let customers order online and pick up their purchases at stores like Circuit City to save on shipping. Amazon has started working with its competitors by providing them with services instead of competing. Amazon is also going to provide e-commerce services to AOL subscribers starting next year.
--Metrollica
Try finding books here in Canada and you'll see how great Amazon is.
Walking into any of the various Chapters/Indigo brick & mortar stores is totally pointless unless you're looking for the latest bestseller or Oprah recommendation (and note how many acres of space are devoted to selling candles, picture frames and other crap like that). Interestingly while they do have quite some selection, the 'best books' in every department seem to always be out of stock, and never replenished, while all the other non-selling crap obviously remains on the shelves.
Ordering online from Chapters/Indigo is even worse, most things I am interested in seem to be always on 3-6 weeks shipping, while Amazon has ALWAYS, ALWAYS, ALWAYS had EVERYTHING I wanted on '24 hours' shipping (and it *did* ship in 24 hours).
I also remember once ordering a book in a brick & mortar Chapters store, being quoted '2 months' and after about 1 *year* being told that the book went out of print in the meantime (and yes, I kept going there every other week to ask what was going on). Same thing happened trying to order an import CD from the Virgin megastore: they got all my data, told me 3 weeks, it's been 2 years and they still haven't gotten back to me...
While ordering from Amazon is expensive for us Canadians (shipping ain't cheap, and 3 times out of 4 I get to pay duty/GST and PST on the things) it is really the only option if you really want something in a reasonable time frame.
Now if only Amazon shipped *everything* to Canada (most/all toys/electronics/power tools/etc. are US-only) it would be even better, not to mention if they slashed the really expensive shipping charges on paperbacks...
-- the cake is a lie
Amazon now says the recommendation feature isn't really theirs. Actually, the way they buckled under to another patent claim on the obvious application of existing technology is more significant news than just one more instance of their "creative accounting."
National CyberCrime Prevention Foundation
National CyberCrime Prevention Foundation
Dude;
where do you think amazon.com GETS its rare books from?
Yup.
Independent book sellers! (says so on their page, no idea how reliable that is. ^_^ )
Kinda hard to find alot of those old books therwise, hehe.
Need help treating your acne? Come here!
disclaimer: unabashed fan of Amazon
It's been mentioned how helpful Amazon is for those who don't live in an urban center.
What is more notable is how many small presses Amazon has saved. It has given "shelf space" to small/speciality presses who couldn't get the back dusty corner in a mall store. Some time back, more than a year, I remember reading an article which contrasted Amazon's sales with typical brick & morter bookstores. B&M's sales are 80% best sellers, 20% "others". Amazon's sales were the reverse. Good for small presses, non-mainstream writers, & folks who don't live near specialty bookstores.
Although it seems obvious that anybody can take billions of dollars and create five million out of it, amazon.com's accomplishments are being overlooked. Their main goals in pumping the billions of dollars into their venture was in fact at the time to control marketshare, and knock out competitors. As the dot-com craze slowed down they realized that they were dominating their market, and could begin cutting back. Also, Amazon.com not only surpassed wall st's expectations, but in fact their own. Of course, upcoming quarterly reports may tell us otherwise, or prove that amazon.com is fueling a money engine in hopes to not only dominate their market, but to also pay back the venture capitalists.
Another accomplishment that shouldn't be overlooked is the 1000's of jobs that Amazon creates in an otherwise bleak Seattle economy.
Given 5 billion dollars and a 3% interest bearing bank account, there would be _no_ impact on a local economy.
Anytime I need to read about book / dvd reviews, I head on to Amazon site.
Sure they are not darling red-hat (one click patent and all), but they run a decent web site.
Since my article on Google's profit was rejected yesterday I can only assume Slashdot editors only care about the performance of dotcom companies they own stock in.
I shop at Amazon, I recommend Amazon to friends and family because they are certainly best of breed.
Congrats, Mr Bezos. BTW, how long does it take to get from your office to the loading dock on your new Segway?
--jdp Maintainer of VisEmacs
Not true, because that bank would use that money to makne loas, many of which would be local buisnesses. How else do you think that bank would get the 410 thousand dollars a day it would have to pay in interest. (No single bank would allow you to deposit that much btw, specially not at one time, they simply couldn't handle it) But thats another story.
...is RH also post real earnings. ("real" == GAAP, not pro forma.) I suspect that will take a lot longer, though, considering their business model.
OK, let's review:
Spent $13 billion
Got a few warehouses, a web site, and "first mover advantage" in what is going to be a low margin business, one day soon.
At 1 cent per $12 share, that's a return on equity of 0.08%, or about 0.32% annualized.
Now to compensate for the volatility risk of this thing, one might hope for earnings of what? 15%? Ridiculously low, but interest rates are low. That'd be about $250MM/q, or a cool billion a year, in nice round numbers. Achievable? Maybe.
To make that return back when the stock was $100 would have required profits of $8bbn/year. What were they thinking?
Looking back, Bezos could have bought the entire publishing industry, built his damn website, and been in a high margin business. Too bad he didn't have the vision for it.