Bezos Says Amazon.com Will Turn 'Pro Forma Operating' Profit by Fourth Quarter, 2001

CEO Says He Isn't Seeking Merger or Buyer For Company



Apr 01, 2001, 00:00 ET from Newsweek

    NEW YORK, April 1 /PRNewswire/ -- Amazon.com CEO Jeff Bezos tells Newsweek
 the company will turn what he calls "pro forma operating" profit by the fourth
 quarter of this year and he wants to assure his 30 million customers that he's
 not running out of money. "The stock is not the business," he tells Newsweek
 in the April 9 issue. "The business is in better shape than it has ever been,"
 he adds, claiming that profit will come simply by better execution.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010331/HSSA009 )
     Even though Amazon.com takes in almost $3 billion a year and is ranked
 among the 50 top brands in the world, after six years the company is deep in
 debt and still burning dollars, and with the stock market tanking, the share
 price has taken a beating. Bezos now says profitability "is the right thing to
 do" and he tells Technology Correspondents Steven Levy and Brad Stone that,
 while the company is actively seeking partnerships, even if no other partners
 emerge, "we'll be fine." He also says he isn't looking for a merger or a
 buy-out by an Old Economy company.
     But, Wall Street Editor Allan Sloan crunches Amazon's numbers and writes
 in the current issue (on newsstands Monday, April 2) that the company's road
 to profitability may not be so easy. "By my math, which Amazon doesn't
 seriously dispute, it ran through $350 million to $400 million of cash last
 year. If you assume Amazon continues to bleed cash at a $400 million annual
 rate, I give Amazon about 18 months before its cash on hand dwindles to levels
 low enough to make its suppliers restive. Amazon says my $400 million burn
 rate is way high," he writes.
     Sloan says Amazon shouldn't have become a public company before it had a
 profitable business and it shouldn't have expanded into a "hodgepodge" of new
 businesses simply because "the buzz phrase in 1999 was 'top-line growth.'
 That means increasing sales -- but not necessarily making profits." Sloan
 predicts that Amazon will survive, but not in its current form.
 
              (Article attached.  Read Newsweek's news releases at
               http://www.Newsweek.MSNBC.com. Click "Pressroom.")
 
 

SOURCE Newsweek
    NEW YORK, April 1 /PRNewswire/ -- Amazon.com CEO Jeff Bezos tells Newsweek
 the company will turn what he calls "pro forma operating" profit by the fourth
 quarter of this year and he wants to assure his 30 million customers that he's
 not running out of money. "The stock is not the business," he tells Newsweek
 in the April 9 issue. "The business is in better shape than it has ever been,"
 he adds, claiming that profit will come simply by better execution.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010331/HSSA009 )
     Even though Amazon.com takes in almost $3 billion a year and is ranked
 among the 50 top brands in the world, after six years the company is deep in
 debt and still burning dollars, and with the stock market tanking, the share
 price has taken a beating. Bezos now says profitability "is the right thing to
 do" and he tells Technology Correspondents Steven Levy and Brad Stone that,
 while the company is actively seeking partnerships, even if no other partners
 emerge, "we'll be fine." He also says he isn't looking for a merger or a
 buy-out by an Old Economy company.
     But, Wall Street Editor Allan Sloan crunches Amazon's numbers and writes
 in the current issue (on newsstands Monday, April 2) that the company's road
 to profitability may not be so easy. "By my math, which Amazon doesn't
 seriously dispute, it ran through $350 million to $400 million of cash last
 year. If you assume Amazon continues to bleed cash at a $400 million annual
 rate, I give Amazon about 18 months before its cash on hand dwindles to levels
 low enough to make its suppliers restive. Amazon says my $400 million burn
 rate is way high," he writes.
     Sloan says Amazon shouldn't have become a public company before it had a
 profitable business and it shouldn't have expanded into a "hodgepodge" of new
 businesses simply because "the buzz phrase in 1999 was 'top-line growth.'
 That means increasing sales -- but not necessarily making profits." Sloan
 predicts that Amazon will survive, but not in its current form.
 
              (Article attached.  Read Newsweek's news releases at
               http://www.Newsweek.MSNBC.com. Click "Pressroom.")
 
 SOURCE  Newsweek

RELATED LINKS

http://www.amazon.com