Amazon Makes a Profit 311
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.
Something to keep in mind (Score:5, Interesting)
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
Linux saves Amazon (Score:5, Interesting)
Re:Porn (Score:5, Interesting)
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.
"Profit" in the loosest sense of the word (Score:4, Interesting)
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%).
quantnum theory (Score:2, Interesting)
Incorrect (Score:2, Interesting)
What do you give up for good book service? (Score:4, Interesting)
Just my view.
The Unneccesarily Long Road to Profitability (Score:5, Interesting)
Amazon's Future (Score:4, Interesting)
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.
Re:This is interesting ... (Score:3, Interesting)
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...
Re:Great! (Score:0, Interesting)
Amazon now says the recommendation feature isn't really theirs. [164.195.100.11] Actually, the way they buckled under to another patent claim on the obvious application of existing technology [com.com] is more significant news than just one more instance of their "creative accounting."
Re:Jaded? (Score:0, Interesting)
Re:Amaron? (Score:4, Interesting)
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.
some kind words for Amazon (Score:5, Interesting)
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.
Re:Congratulations! (Score:2, Interesting)
Re:Congratulations! (Score:2, Interesting)
Given 5 billion dollars and a 3% interest bearing bank account, there would be _no_ impact on a local economy.
amazon has a *VERY NICE* web site.... (Score:3, Interesting)
Sure they are not darling red-hat (one click patent and all), but they run a decent web site.
Google, too (Score:5, Interesting)
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.
Re:Great! (Score:2, Interesting)
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?
Re:What do you give up for good book service? (Score:2, Interesting)
I'm not saying Amazon's a saint, but before you denouce them, look at what some of the stores you frequent participate in.
Re:Congratulations! (Score:2, Interesting)
What I really want to see... (Score:1, Interesting)
Not impressed (Score:1, Interesting)
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.