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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: John Donahoe who wrote (44415)	3/7/1999 4:10:00 PM
From: Glenn D. Rudolph	Respond to of 164684

The 10K doesn't breakout fulfillment costs. It's included in Marketing and Sales and in Cost of Sales. The exact numbers are not apparent. Agreed. They are not apparent but the following is in the 10K "The cost of advertising is expensed as incurred. For the years ended December 31, 1998, 1997 and 1996, the Company incurred advertising expense of $60.2 million, $21.2 million and $3.4 million, respectively." Amazon's pro forma operating loss (that is, operating losses sans mergers, acquisitions, and interest expenses) in 1998 was $61.8 million. So let's see -- if Amazon didn't spend any money on mergers, didn't spend a single cent on advertising, and had no interest expenses they would still not be profitable! That is, the loss from their basic operations ($61.8m) was greater than their advertising expenses ($60.2m). So, yet again, the argument that "Amazon can be profitable anytime they want" did not have any merit in 1998.