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Thursday, April 19, 2001
Bezos is focusing on new services
Amazon.com's CEO wants to sell more to the customers the company already has
By Anne D'Innocenzio
Associated Press
NEW YORK - Jeff Bezos, chief executive officer of Amazon.com, is under Wall Street's microscope.
Sure, shares for the Seattle-based online retailer soared last week when the company boasted that it expects its first-quarter results to handily beat analysts' estimates of a 30-cent-per-share loss. Its statement pegged sales for the quarter at $695 million, with an operating loss of 22 cents per share. The official results come out next week.
Despite the upbeat projection, analysts are not convinced that Amazon's problems are over. The company, which has branched out beyond books into such products as software, electronics and kitchenware, is faced with several challenges, among them an overall slowdown in consumer spending and prospects of profitability.
Ever the promoter, Bezos flew into New York last week to tout the company's new retail partnership: Taking over Borders.com's money-losing e-commerce site.
Bezos spoke with The Associated Press:
Associated Press: Are you concerned about the slowdown in your core area of books, music and video?
Bezos: As we just announced, year-over-year, we saw a very slight growth in what we call U.S. BMV (books, music and video) segment. We also saw very strong growth in electronics and international. Our U.S. BMV had a 30 percent increase in gross profit.
AP: Do you think an increase in sales will come from new users?
Bezos: Our focus in the U.S. is primarily on existing customers. We already have such a large customer base in the U.S., and it make sense to focus on those folks and try to offer them new services, so that they will buy more from us. Outside the U.S., we are primarily focused on new customers.
AP: What product areas would you like to eliminate? Kitchenware? Tools?
Bezos: We are very happy with the areas, and they have very nice margin characteristics.
AP: Wal-Mart, Target and Kmart have all retooled their sites, reaching out to the Middle American consumer. Do you think your business will be hurt by the new competition?
BEZOS: Important industries are built by multiple companies, and we think there will be lots of winners online. We've always believed that. I still believe that.
AP: Amazon has been under fire by analysts for not providing financial details. Do you think you are providing enough financial information to assure analysts that you will have enough cash for the remainder of the year?
BEZOS: Absolutely. I feel very strongly. That was an issue of one or two analysts that simply had it wrong. The vast majority of analysts and investors do believe we have plenty of cash. We don't need to raise more cash. Even some of our harshest critics on the valuation of the companies are very clear that the cash piece is a myth.
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