SIGIA-L Mail Archives: SIGIA-L: Ecommerce at its finest
SIGIA-L: Ecommerce at its finest
From: Paula Thornton (paula.thornton_at_prodigy.net)
Date: Wed Jan 09 2002 - 23:03:26 EST
Ziya said: "Predicting when or if Amazon will ever be profitable has been an
analysts' sport over the last five years or so, during which, of course,
Amazon has never made a dime of profit. In 2000 alone, Amazon's net loss was
over $1.4 billion....Amazon has admittedly a nice book operation, but there
isn't much profitable or unique about the company."
Because there are an extensive number of students who read these posts I
wanted to make sure that there was a separation of fact from opinion [and
add more goodhearted evidence of the need for 'IA team members' who have
extensive business training/understanding] . In fact, if you refer to
Amazon's recent 10-Q (available on their site), you would see that by the
end of September 2001 Amazon sold over $2Bil. in products compared to
$1.8Bil. over the same period in 2000. Net of the cost of sales, Amazon's
net profit from sales by September 2001 was $524.5Mil.
That hardly sounds like a company who is not successful at sales. "Profit"
is a relative term. Bezos has made no apologies for the fact that he was
'investing' everything they made into activities which would ensure market
position in a number of dimensions. I'd have to ask Ziya if he/she
personally knows anyone who works among the professional ranks at Amazon. My
"best, challenging, supportive, mentoring" manager (a decade younger than I)
was 'bought' as part of a team by Amazon several years ago for the
'intellect' they could bring to their innovation in technology (esp.
customer data).
On July 23rd 2001 AOL bought $100Mil of Amazon's stock. Hardly a 'vote of
dissatisfaction'. As for Ziya's perspective of Amazon.com being a 'nice book
operation', that would ignore the fact that Amazon breaks out their sales
numbers where Books, Music, DVD/Video are all combined and another category
called Electronics, Tools and Kitchen does a third of the business of the
first category. From July 1, 2001 to September 30th the first category
brought in $351Mil and the second category $103Mil. I'd hardly call that a
'nice book operation'.
Moral: Be informed to add more value (rather than just noise in the wind).
************************************
Paula Thornton, Interaction Design Strategist
Thus the task is not so much to see what no one yet has seen,
but to think what nobody yet has thought
about that which everybody sees ~ Schopenhauer
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