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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 227.35

+0.3%

Dec 19 9:30 AM EST

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To: Glenn D. Rudolph who wrote (102196)	4/26/2000 7:40:00 PM
From: A.L. Reagan	Read Replies (2) of 164684

Books, music, video/DVD sales Y to Y increase $134 million, yet the decrease in segment operating loss is only $694K. These guys have been at this part of the business for awhile. Not exactly start-up rookies. Something is wrong with the margin picture when a $1 increase in sales only translates to a half cent improvement in operating margins. Which apparently doesn't even include part of the rent on the new warehouses which I presume is reported as interest expense to the extent these are capital leases. Thought the whole point of lofty valuations for these guys was the alleged scalability (i.e. operating leverage) of the customer interface being on the web. This seems really pretty pathetic if AMZN has been stressing improving profitability of its core operations. Maybe they are finding out that with all the bricks and mortar investments made since last year that fixed overhead is a "burdensome" concept. Not trying to bash, don't pretend to understand AMZN, but do understand retail. The trend numbers in the core business don't make much sense. This horseman looks a bit lame.

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