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September 5, 2000
Amazon C.E.O. Comments on Business
REUTERS INDEX: TOP STORIES | INTERNATIONAL | BUSINESS | TECHNOLOGY
By Reuters
Filed at 1:57 p.m. ET
HOUSTON (Reuters) - Investors wondering when persistently unprofitable online retailer Amazon.com (AMZN.O) will start making money should focus on the contribution to its operations from mature businesses, Chairman and CEO Jeff Bezos said on Tuesday.
Speaking to reporters after addressing an audience at Rice University, Bezos declined to specify when Amazon.com as a whole would become profitable, saying the company had internal goals for profitability but would not disclose them.
``The thing to look for is when the ratio of our mature businesses to our new businesses starts to become high,'' he said.
Bezos said Amazon's relatively mature business of selling books, compact discs and video tapes over the Internet in the United States had already generated an operating profit of $10 million in the second quarter of this year.
He rejected the suggestion that profits would remain elusive as long as the company kept adding new start-up business lines such as tools, electronics, toys, kitchen equipment and national online retail businesses in Britain, Germany and France.
``It's the ratio that matters. You can continue adding at the same or even an accelerated rate and still the ratio of new business to mature businesses changes,'' he said.
Bezos also said the Internet was bringing about an unprecedented shift in the balance of power in commercial relations in favor of the consumer.
Manufacturers would be forced to direct their energy into making better products rather than clever marketing programs.
``The days of selling mediocre products through excellent marketing are numbered,'' he said.
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