Skip to page content or skip to Accesskey List.
Search evolt.org
evolt.org login: or register

Work

Main Page Content

Amazon Out of the Woods?

Posted on January 22, 2002

in News

by Adrian Roselli (aardvark)

Rated 3.6 (Ratings: 9) (Add your rating)

Log in to add a comment
(6 comments so far)

Want more?

 
Picture of aardvark

Adrian Roselli

Member info | Full bio

User since: December 13, 1998

Last login: January 03, 2012

Articles written: 85

Back on January 21, Amazon had expected to report its first profit — a pro forma profit that would exclude many costs included in regular accounting and is often seen as a controversial method of creating good news where there may be none. Amazon has maintained that pro forma accounting is more appropriate for its business model.

However, Amazon posted a $5 million (1 cent per share) profit the very next day using standard accounting methods. Amazon used GAAP (Generally Accepted Accounting Principles), which is considered quite an accomplishment for a company often viewed as the poster boy for creative accounting.

Wall Street tracking firm Thomson Financial/First Call had expected Amazon to post a pro forma net loss of between 4 and 8 cents a share, compared to a loss of 25 cents a share ($90 million, pro forma) a year ago. Amazon's GAAP losses last year were $545 million, or $1.53 per share.

Amazon was able to cut its operating costs in half this past quarter, which allowed for lower prices on core products, resulting in higher sales volume. Free shipping on orders over $99 (originally a holiday special, but permanent as of today) as well as bundled products are credited with some of that volume, according to Bezos. Licensing its e-commerce package to Target and Toys R Us probably hasn't hurt, either. International sales were up 81% from last year, with the Germany and United Kingdom offices breaking even.

Amazon is still in debt to the tune of $2.2 billion ($120 million a year in interest alone), although that debt does not come due until 2008. Amazon is projecting first quarter sales between $775 million and $825 million, with $810 million in liabilities in the fourth quarter, meaning that profit is already earmarked and unable to pay down its debt.

Related Links

A founder of evolt.org, Adrian Roselli (aardvark) is the Senior Usability Engineer at Algonquin Studios, located in Buffalo, New York.

Adrian has years of experience in graphic design, web design and multimedia design, as well as extensive experience in internet commerce and interface design and usability. He has been developing for the World Wide Web since its inception, and working the design field since 1993. Adrian is a founding member, board member, and writer to evolt.org. In addition, Adrian sits on the Digital Media Advisory Committee for a local SUNY college and a local private college, as well as the board for a local charter school.

You can see his brand-spanking-new blog at http://blog.adrianroselli.com/ as well as his new web site to promote his writing and speaking at AdrianRoselli.com

Adrian authored the usability case study for evolt.org in Usability: The Site Speaks for Itself, published by glasshaus. He has written three chapters for the book Professional Web Graphics for Non Designers, also published by glasshaus. Adrian also managed to get a couple chapters written (and published) for The Web Professional's Handbook before glasshaus went under. They were really quite good. You should have bought more of the books.

6 comments on this article. Log in to add your comment | Rate this article: Rate this node 1 star.Rate this node 2 star.Rate this node 3 star.Rate this node 4 star.Rate this node 5 star.

web-related

Submitted by mwarden on January 23, 2002 - 12:20.

I guess this is kind of web-related...

login or register to post comments

web-related...? yeah

Submitted by aardvark on January 23, 2002 - 12:43.

Given how many of my clients refer to the Amazon business model, and given how they are considered a case study for e-commerce, and given how many developers refer to their cart as a UI example (good or bad), and given how they're a web-only business surviving the supposed dot-com crash, and given how they've had to wrangle with everything from accessibility to browsers to download speeds to coding (all of which affects their sales and hence their livelihood), and given a lot of other things, yes, I absolutely think it's web-related. Amazon comes up all the time with clients, with fellow developers, on lists, on sites, and everywhere else I can think of. And it seems to be the dot-com business people are watching, the one that's had so much focus from so many for simply existing on the web. I think reporting on its health is valid.

I'm guessing the one rating it has right now is yours (a 2 out of 5), so does that mean it sucked as an article, or you just don't think it's webby enough? I don't much care about the rating in general, but I hope the rating is based on content, not whether you think it's web-related (especially since I think it is web-related, which means I'd not have rated it at all if my only criterion were its relevance).

login or register to post comments

Re: web-related...? yeah

Submitted by mwarden on January 23, 2002 - 12:55.

Note that I didn't say it wasn't web-related, but that it was kind of web-related.

If that rating was mine, I think it fits. I've never rated a news article higher than a 3 (well, actually, I may have once, but that's because it was an exceptional news piece) just because of the nature of a News article in comparison to articles of other categories. And, I think the content of other articles is more web-related than this one.

cool?

login or register to post comments

Re: web-related...? yeah

Submitted by aardvark on January 23, 2002 - 13:18.

Yes, you did say kind of web related. I guess I just thought you might have a reason for taking the time to post your inner dialogue beyond keyboard practice. I thought maybe you wanted to know why it was posted, but it seems that's not the case.

And if that sole rating was yours, don't you think it deserves to be changed to a five just for the pun in the title alone?

login or register to post comments

Ratings--how muh do they really mean?

Submitted by StOne on January 23, 2002 - 22:52.

Given that many of us read the articles, but don't take time to rate them. (I usually don't, I admit.) Even the highest-rated articles get only a handful of ratings. So it's a very small sampling. Just something I've noticed, for whatever it's worth.

login or register to post comments

nice title

Submitted by lpb1 on February 3, 2002 - 09:46.

i do appreciate the pun in the title. the content is something most web developers should know, too, as these things come up in conversations with clients, etc., and show off well-roundedness (ok, maybe i'm stretching a bit here).

login or register to post comments

The access keys for this page are: ALT (Control on a Mac) plus:

evolt.orgEvolt.org is an all-volunteer resource for web developers made up of a discussion list, a browser archive, and member-submitted articles. This article is the property of its author, please do not redistribute or use elsewhere without checking with the author.