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Broadcast
26th October 2000
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AMAZON
CHIEF HAPPY DESPITE CONTINUING LOSSES
Investors
waiting for the day when the internet retailer Amazon.com makes
a profit will have to wait a bit longer. In its latest three months
trading Amazon lost $50 million. The company has been losing money
now for five years.
One
investment bank, Lehman Brothers, has again warned that it has concerns
about Amazon's ability to repay a company bond.
But
Amazon's founder Jeff Bezos dismisses such fears and pointed out
that in the original business - selling books online - the company
is now making money and he says he is tickled pink because they
are really good results.
Two important new product categories are working he claims, dismissing
the concern than many people had. "Our electronic store is now
our second largest business - it has surpassed even the size of
our music business which is growing very rapidly."
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Customers are adopting new product categories like electronics
and toys and kitchen and tools. Jeff Bezos |
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He is also confident that the business model works. "If you look
at our most mature business, which is our US books, music and video
business, that business now has a $25 million operating profit in
this third quarter. We are very proud of that performance and that
takes away the question as to whether or not the business model
works," he said.
There have always been a large number of critics who believed
that Amazon's business model did not work but, with money in the
bank, Mr Bezos thinks the scales will eventually swing and the company
will post a profit.
As
for the fall in their share price, which values the company at a
more reasonable level, Mr Bezos says it if good for internet companies
in general.
"One of the things you are seeing in the year 2000 is very healthy
- the return of one of the traditional roles of investors - which
is to be sceptical. In the year 1999 a lot of investor scepticism
was set aside so what you are seeing now is going to be a period
of consolidation and the companies that survive that period are
going to be the leaders and they are going to come out stronger."
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One of the things you are seeing in the year 2000 is very
healthy: the return of one of the traditional roles of investors
- which is to be sceptical. Jeff Bezos |
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