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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.
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
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..
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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
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%).
[DISCLAIMER: I own Amazon stock, and I still believe that a company that provides good customer services can't be bad, so I'm holding onto it]
Agreed.
As much as I hate about their one-click patent, Amazon is best place for books and other stuffs. Their recommendation feature is excellent. I found out a lot of authors that I would have known otherwise. And the service is first class. If only other companies would care so much about service quality too....
Sure, Amazon has been losing tons of money, but you have to give credit to the company for very good forcast of their target. They have been very good at being on the mark in the past.
Now, if Jeff Bezos commits to more consistent customer privacy policy, I would be a really happy customer (and shareholder too).
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?" `":" #");}
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?
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
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"
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
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.
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.
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
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.
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]....