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

To: H James Morris who wrote (57665)	5/21/1999 8:03:00 AM
From: Glenn D. Rudolph	Respond to of 164684

Amazon.com's Bezos sees profits but can't say when By Martin Wolk SEATTLE, May 20 (Reuters) - Yes, Amazon.com Inc. <AMZN.O> plans to be profitable someday. "Amazon.com believes it is very important that one day we will be profitable," Chairman and Chief Executive Officer Jeff Bezos assured shareholders at the company's annual meeting Thursday. "We don't subscribe to any kind of new math." But as usual Bezos declined to say exactly when that would be, saying only that the online retailing giant continues to invest heavily for the long term, which he defined as "ten-plus" years. In its most recent quarter Amazon.com lost $36.4 million on revenues of $294 million, and the company warned losses would deepen in coming quarters. Bezos declined to comment on how the company has done so far this quarter. Although Amazon.com's stock price has declined 41 percent from its record high last month just before its earnings announcement, there was little grumbling in the packed audience. After all, even with the recent decline, Amazon.com shares have risen nearly eightfold in the past year alone. Bezos reiterated his warning that Amazon.com is likely to remain volatile along with other pure-play Internet stocks. But he said a severe downturn in Internet stock prices actually could benefit Amazon because its strong cash position would allow it to make acquisitions at reduced prices. "Our financial flexibility could serve us very well in that situation," he said. Amazon.com has about $1.4 billion in cash after completing a $1.25 billion convertible bond offering this year. The company filed with federal securities regulators this week to offer another $2 billion in equities or debt. Chief financial officer Joy Covey said the filing gives Amazon.com additional flexibility to move quickly, although she said there were no specific plans for any offerings. Covey also said she thought it was most likely that in the long term Amazon.com operating margins would settle in the 8 to 11 percent range, or about 6 to 9 percent after taxes. But she and Bezos said it could be lower or higher, depending on whether the company seeks a low-price, high-volume model or shifts to more high-margin revenue sources such as commissions and advertising. "There are multiple scenarios and we don't know which one will be the operating one," Bezos said. "We are trying to maximize absolute dollar margins, not percentages." Bezos also said the company expects to have "thousands, if not millions of partners" as it pursues its goal of becoming a place where consumers can find anything they might want to buy online. "It's just not practical to be the direct seller of everything, so we're going to have to partner," Bezos said. He pointed to the company's direct investments in Pets.com, HomeGrocer.com and drugstore.com as well as its new auction site which sells items from thousands of individuals and businesses. He also said Amazon's low-profile "Shop The Web" service, which leads customers to third-party sites, was a key part of its growth strategy, although he kept a tight lid on details about the project's future. Foresight and planning LOL........