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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.
Hell has finally frozen over... Good day.
A sign of the Apololypse?
Like AOL/TW suing, say, Microsoft?
Oh, wait...
I like you, Stuart. You're not like everyone else, here, at Slashdot.
At 5c a share it's no pension fund in Florida yet
No, but I hear Enron is looking for buyers.
Of course, if you gave me billions of dollars in venture capital I could probably find a way to give you back $5 million too.
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charlton heston is more of a man than yo
Despite their lame patents, Amazon is still one of the best places to get books on the internet. Part of their sucess could be their dealings with brick and mortar stores, like Borders. I also like the fact that I can pick up music that I can't find elsewhere like (quick plug) Dispatch. I'm glad this recession doesn't have them belly up.
Even if it is Amazon, it's good to see the .com model does produce profit.
I just hope they didn't earn a profit from selling customer data, the infamous 1-click patent, and all the other dirty tricks.
A Human Right
I wonder how much of that profit represents 1-click licensing fees.
Jaded? Party of one? Your table's ready...
Meanwhile, porn sites have been making money since a text drawing of a tit was placed on usenet.
I can't believe people. Amazon posts a profit for the first time (and on a reasonable time schedule in the real world) and then someone complains that it's not a big enough profit. What did the submitter expect? a 1-billion dollar windfall? considering the state of the US economy at the moment the fact that amazon made a profit is even better.
My blog: http://jkratz.dyndns.org/~jason/blog/
I would have submitted this first, but i was hit by a flying pig on the way to my computer..
--
Mod up a post Rob doesn't like and you'll never mod again
What's with all the hell freezing over cracks? Is it really so difficult to believe a retailer would eventually turn a profit?
Or all we all just amazed that at least one DotCom company had a solid business plan, stuck with it, and now has something to show for it?
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
Not true. The pro forma profits were $35 million (from about the middle of the article). A quote:
Excluding those expenses, the e-tailer's pro forma profits topped estimates handily, reaching $35 million, or 9 cents a share. According to First Call, Amazon was expected to lose 7 cents a share, excluding goodwill, on sales of $1.01 billion.
"Of all days, the day on which one has not laughed is the most surely the one wasted." -Sebastian Roch Nicol
No, it wasn't pro forma. It was a real net profit. Read the articles again. In fact, their pro forma profit was $35M.
I live ze unknown. I love ze unknown. I am ze unknown.
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?" `":" #");}
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.
No, if you read the article instead of applying your pre-formed assumptions, you'll find that the profit was under generally accepted accounting principles. The pro forma profit was even higher. Amazon beat out the expectations of the naysayers.
main(c,r){for(r=32;r;) printf(++c>31?c=!r--,"\n":c<r?" ":~c&r?" `":" #");}
From the article:
Not sure exactly what the "services" are (like everyone else, I hope it's not 1-click licenses) but this pretty much confirms what my gut told me: Amazon is good at selling books and media, but really lousy at selling everything else. I really hope that they realize this and get out of the TV's-and-lawn-chairs business. They're still a great place to buy books, but I've never bought anything bigger than about 1 cubic foot from them, and I'm pretty sure I never will.
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
http://ars.userfriendly.org/cartoons/?id=19990406
[scene: MS techie in moon suit, facing the perfect home for a new evil AI (in other words, an Arnold Shwartzenegger-type guy)]
MS Techie:[thinking] How do I knock this guy out? He's positively huge. I don't even think a mallet would do him in.
*thinks*
Techie: I heard Amazon.com actually turned a profit this quarter.
*whoomp* [Arnold faints]
Techie:[thinking] Lies and damned lies...
This
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.
This article states:
Amazon didn't even have to resort to controversial pro forma accounting methods. It posted a net profit of $5 million, or 1 cent a share, for the quarter, using standard accounting methods.
A great many people think they are thinking when they are merely rearranging their prejudices. -- William James
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?
and not an expense.
Why? The factory is worth $10 billion dollars. Amazon could sell it if they had to. Then the factory depreciates over time and that's when the company can expense it.
I agree that this is a shitty return, but there's a big difference between spending $10 billion on a factory and $10 billion on programmers salaries.
Trolls throughout history:
Jonathan Swift
Greedy vulture capitalists distracted the contruction of internet commerce in the late 1990s. Finally a few companies are getting it to work properly.
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
An Item that the article didn't mention was their used items. This is a very smart move by Amazon(and a direct rip-off of half.com) since all they do is list used items that people want to get rid of, Amazon gets a percentage of whatever a person sells and it costs Amazon $0.0X money.
But the big "straight numbers" problem with Amazon can be illustrated as follows:
Quarter ending December 31, 2001
Total assets $ 1,637,547,000
- Total liabilities 3,077,547,000
= Total stockholders' deficit ($1,440,000,000)
Quarter ending Sep 30, 2001
Total Assets $1,346,368,000
- Total Liabilities $2,800,362,000
= Total Stockholder Equity ($1,453,994,000)
Would you pay $4.6B (about its current total market price) for a company that continues to be worth around $-1.4B? Take note that I am not accounting for "hope" and "prospects" here.
If they double, triple, or even quantuple this quarter's $5M take, it will be a long time before Amazon.com can justify the enormous chasm between debt and assets. Amazon.com must have some seriously bright prospects to justify their market cap!
The above fiancial data is based on SEC filings and is from the quarter ending Sep 30, 2001 and today's press release from Amazon.com.
... are as follows ...
... see? you dont have to piss ppl off with unsolicited emails to try and make money. sometimes you can just work hard at it (and yes, patent and sell off stuff, but they arent the only business to do it, so GET OVER IT already)
... i think this page should be archived somewhere for posterity. im pretty sure that even winnie the poohs personal website doesnt have that phrase on it.
1) amazon appear to have made a profit without anyone (or me at least) every receiving any spam from them (sure, i get occasional mailing list stuff, but i signed up for that when i created my account with them)
2) the news link in the article has what may be the worlds first html anchor of the phrase "pooh-poohed"
don't most people think "ad revenue" when you say "dot-com model?"
.com model :-)
Maybe I'm older than the average slashdotter, but I still thought '64K single segment' when I saw
[I know it's from CP/M and VMS before that...]
"don't fall into the fallacy of believing that Perl can solve social problems. Maybe Perl 6 can, but that's a ways off"
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.
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.
If you'd been reading Slashdot today, you would have noticed the other story about Amazon.
While they did spend a lot on advertising, they also bought very expensive sorting machines for thier warehouses. The efficency of that machine is what let them hire fewer workers and in turn make a profit - they don't just have big expensive warehouses, they also have a massive sorting machine and a great process for getting things shipped quickly that would probably be an intangible asset worth quite a lot apart from the physical assets.
As for the profit being sustainable, they noted in same article that they think they can double output from those warehouses using the same amount of labor. It seems like at the moment Amazon will turn into the most efficient game in town for turning around web based orders, which in turn should help it stay competitive.
I know I use Amazon for almost all my movie/CD/book shopping (Ok, sometimes I use FatBrain). Sure, I can save a few dollars on average here or there but what I have learned from experience is that Amazon is a lot more likley to have stuff well packed and arrive to me in good shape. Witness buy.com who has a number of times sent a few CD's loose in a box with one air cell thrown in as an afterthought!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
None, I'd venture. If you measure the savings made by Amazon migrating (flocking might be a better word) to Linux, you'd more than equal $5m.
Have a nice dividend (snigger).
Backward%20compatibility%20is%20over-rated
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.
Wall Street seems to be full of them: people buying stocks based on the "bigger sucker" theory, hoping that whether the stocks were worth anything or not there will be a bigger sucker to sell them to later. The whole dot-com crash was due to the failure of this theory: eventually you reach the biggest sucker.
However, there are still a few people out there who actually look at company earnings and (wait for it...) dividends before buying a stock. If you've got a few spare bucks you want to gamble with, being one of these "investors" may not sound like fun, but people playing with their retirement funds might want to give it a try.
The Matrix was cool and everything, but that whole "human battery" idea is just plain stupid. It's gotta be the least efficient method of getting energy one can think of, plus the most absurdly convoluted way of going about it.
Besides, it'd be a lot cheaper for them to build a few fusion reactors here and there, than to pay AOL-TimeWarner-Microsoft-Vivendi (face it, it's the future) licensing fees for the Matrix content and software. Can you imagine the monthly bills for MS Matrix Enterprise Edition with a few billion "seats"? And they probably don't sell too much ad space, so the programming/content costs would be astronomical.
Yeah, yeah, off topic - how bloody interesting is Amazon.com, anyway? Oh, ok - real shame about that Amazon.com profit! There, its on topic - happy now?
sic transit gloria mundi
This is a Pro Forma profit, which is a nice (and legal) way of saying they've deviated from GAAP (Generally Accepted Accounting Principles) and done some creative accounting. CPA types will be glad to explain why there are several dozen ways to define $PROFIT.
Please, check the footnotes...
Well, but then I would have had a comment that consisted of just a link. Besides, there's those Lynx users to think about...
This
Amazon has had a habit in the past of basically moving costs out of the last quarter of the year into other quarters, so their "Christmas" quarter always looks great (though this one looks a shedload better than their year-ago, that's for sure).
Maybe somebody who owns the stock and actually pays attention to the financial statements (i.e., you didn't buy it at $140/share and are stuck with it now) can research this?
Also pay attention to their HUGE debt. Poor debt management can kill a company, like KMart which filed bankruptcy today.
Although I don't like Amazon because of the patents and the fact that Jeff Bezos is a clown (okay a little ad-hominem there, but making him man of the year was an embarrasment to Time magazine if you ask me), I'd hope they succeed because I love reading their great reviews before buying CDs and books from Barnes and Noble. :-)
See this cartoon.
Three years later...
If you read this article from the Seattle Times, it talks of Amazon.com's method of 'pro forma' accounting, which seems to be a pretty convenient way to hide expenses from the bottom line.
I'm happy for the supposed turn for the better Amazon.com is experiencing, as much as I am for any bellweather Dot.Com. I'm just not sure I'd want to invest in them personally.
Frankly, Gates could pluck a few billion from his pocket change, buy Amazon, and have a MAJOR strangehold over much of the commercial world. Not only that, but he gets tons of customer data for Passport.
While Microsoft doesn't appear to want to get into the retail market what-so-ever, Amazon would make a great outlet for their gear.
mogorific carpentry experiments
Bringing in Arthur Andersen to do the books was the best thing Amazon could have done.
Well, yeah - I basically agree with you.
I've been into computers long before the Internet became popular, and I've invested far too much time and effort in this field to just give up on it because of a digital version of the California gold rush.
As long as those of us truly interested in and dedicated to I.T. stick out these "knee-jerk reaction" times, I think things will get back on track sooner, rather than later.
It's the big investors who got burned on the dot-com fiasco, so of course they're the ones out there now proclaiming that "The new economy didn't exist!" and "The next 10 years of the stock market will be driven by industry, brick-and-mortar stores, and traditional service providers." In their minds, it's the only outcome they're comfortable seeing.
The fact is, the Internet is growing up. We're quickly moving from the "wild, wild west" of Cyberspace to a more governed and commercialized space, where the "real world" reaches out and hangs a virtual hat. This also means that after the fallout from the craziness ends, we probably won't see fast growth like we used to see. Instead, we'll see small profits here and there, and a lot of failed commercial sites - paralleling the real business world.
Although I used to criticize Amazon.com for "dabbling" too much (seemed like Bezos wanted to sell everything under the sun, until of course, a particular item didn't pan out so well for him), I think his persistence at selling his core line of products (books and media) is starting to pan out.
I don't wonder at all. For one thing, eBay is the equivalent of a virtual world-wide garage sale/discount goods expo. It's exactly the type of shopping people want to do most when the economy is depressed.
(If you're making lots of cash, you don't want to settle for someone's used stuff. When money is tight or future money is unsure, those cheaper used items start to look like real good options.)
As for other sites like Amazon not benefiting like eBay is - that's really a no-brainer too.
eBay got into the game "early and often". They attained a critical mass of regular buyers and sellers. For a while, I used both eBay and Amazon auctions - but I gave up on Amazon auctions as they just weren't worth my listing fees anymore. (For every 1 item I'd successfully sell there, I'd sell 3 or 4 on eBay - and usually for higher bids.) You have to go where the "eyeballs" are when you want to sell. That starts a chain reaction, since the buyers want to go where the most items are to bid on.
Amazon never really pushed hard enough to win back the users migrating to eBay auctions. I think they had (maybe still have?) a chance to do it because they're another well-recognized Internet name. They'd need to take a loss for a while though, like offer all listings free for 9 months or so, and advertise it in magazines, etc.
Then, they'd also have to ensure they offered every single feature eBay does (dutch auctions, non-paying bidder alerts, easy online payment system, etc. etc.) if they want to keep those people.
...for the first time in 6 years. Somethiing must really be up!
I hear ya ... I owned some Amazon stock ... got out as it was tumbling. I told my broker ... "I don't want to own shares in a company that I no longer buy from ..." which is what I told him once I discovered the discounts on technical books at ReadMe.Doc ...
healyourchurchwebsite.com - WWJB?
I know Amazon is trying to turn into a retailer-perhaps Walmart.NET or something, but let's focus on its core business-books. It does a good job there. It's changed buying habits all over the world. I mean, how many times have you guys gone online to see how well a book is reviewed? Granted, the system isn't perfect, but it's a hell of a lot better than reading the inside jacket (like I used to do before the NET).
I don't know if Amazon is going to change the world as a retailer, but it has changed the way everyone buys books. Even if you don't buy directly from Amazon, people will often look at the online reviews and than going check out the book in more detail at B&N or Borders.
I believe software is somewhat the same-though I generally don't buy a lot of MS stuff, when I do I check the reviews at Amazon. These are the sort of things where Amazon has developed a really good business model.
If it every does go bankrupt, I expect that they'll just shed all the extra stuff and pair back to light and information oriented items like books and software, they can always make money and they already have volume.
NO gods, NO governments, NO [OPTION]....
At least they haven't all brought out their Uzis, like I hear is standard practice in the US.
Our postal workers are good Americans(tm). When they go postal, they use shotguns, like any True American(tm) would. Uzis are for pussies.
:-)
In all seriousness, the professionalism of our postal workers during the Anthrax scare was nothing short of inspiring, and very surprising given all the bad press (and bad events) that have happened over the years, resulting in the phrase "going postal" becoming equivelent to "running amok." A lot of us (myself included) would probably not be inclined to stay at their job and continue working day in and day out with that sort of direct threat hanging over our heads, yet these folks did so, for weeks on end, without missing a beat (at least here in Chicago).
Still, it seems to be more fun to joke about postal workers running amok than high school students, probably because the latter tend to do it a lot more often these days, and not least because we (especially we Americans) love to take the piss out of anyone in uniform.
The Future of Human Evolution: Autonomy
I don't think Bill Gates would buy Amazon. Because they just migrated onto Linux, he would either face a new loss in migrating over to MS technologies, or he would have to live with owning a company saving cost by using Open Source software.
It's basically a lose-lose situation for Bill Gates.
For IBM, it could be interesting to invest in/run Amazon. They are putting a lot of effort and resources into Linux, and it would be nice to show to the world how Linux can be a good foundation for a profitable business.
I doubt they will actually run it, but perhaps they could offer to deal with the technical stuff? It could certainly be valuable experience for all parties.
Stop the brainwash
You're welcome, and thbbt, I got there first :D :D :D
This
from 1998..any follow up of results from a judgement? All I see is one company saying another is hurting our business..But either way more info is good so thanks :)
errr....umm...*whooosh* *whoosh* Is this thing on ?