Sales figures, customer statistics
The sales figures for the fourth quarter of 1998 alone
reached 252.9 million dollars (almost four times the corresponding
quarterly figure for the previous year : +283%). Between
these two periods, the total number of customers multiplied
fourfold, to reach over 6.2 million accounts. The incredible
power of electronic commerce allowed Amazon to gain the
confidence of 4.5 million more customers.
But if the sales figures are rocketing, the losses are
just as important, as the company announced losses during
the second quarter of 1998 that amounted to 22.2 million
dollars. Is this a bad sign ? Not necessarily, as in order
to retain its dominant position, Amazon must continue
to increase its visibility on the Internet by reaching
agreements with some of the Web's most strategic partners
: search engines and browsers such as MSN or Netscape
capture a huge audience. It's not unusual for partnerships
with these elements to earn tens of millions of dollars.
Despite its success, Amazon Dotcomus still has many critics,
who refuse to believe that its economic model is viable
and a sign of an evolution of its type. Their problem
is that they understand neither Amazon's strategy, not
its strengths. Amazon wants to retain its position as
market leader and is committed to a strategy of winning
customers. This is why its shareholders are prepared to
put up with massive losses, which amuses the former economy's
financial analysts. Has the American market gone mad ?
They, who are so obsessed by the variations in sales and
share profits ? These analysts can't understand that if
the basics remain the same (turnover, profits) it is impossible
to compare a company which has a well-established activity
(for example General Motors) with one which, not content
with creating a new market, of which no-one knows the
exact potential (we only know it will be enormous, and
will partly replace the existing markets), has achieved
an annual customer increase of 300% , and will reach a
turnover of a billion dollars by its fourth birthday.
I don't think I am sticking my neck out if I suggest that
Amazon will be making money by the end of 1999, even if
its financial strategy excludes short-term profit sharing.
For further information, look under the heading HELP/Frequently
Asked Questions on http://www.amazon.com
or contact the investors' relations officer at ir@amazon.com
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