Online books and music store, Amazon.com Inc, has reported a four fold revenue increase in its third quarter, helped by a surge in sales from its newly launched music business which it said had vastly exceeded expectations. Third quarter net losses at the Seattle-based company grew to $45m compared to losses of $9.6m last time and revenues were up to $153.7m compared to $37.9m in the year ago period. Amazon’s founding chief executive, Jeff Bezos, said the third quarter had been as significant as any so far in the company’s brief history. Firstly, another 1.2 million customer accounts were added in the quarter, bringing the total to 4.5 million (compared to just under 1 million registered accounts this time last year). Secondly, the first full quarter of music sales from Amazon’s CD store (launched in June) brought in revenues of $14.4m, which Bezos claimed had made his company the number one, online music retailer virtually overnight. A fact which stretches the truth slightly following the merger of N2K Inc and CDNow Inc which had combined third quarter revenues of over $24m. Thirdly, Amazon completed its acquisitions of PlanetAll and, more significantly, Junglee Corp in the period. Junglee provides what it describes as a web-based virtual database, which essentially helps shoppers to find new things to buy on the internet. This, said Bezos, encapsulated Amazon’s future direction. Bezos is already looking way beyond just books and music to an Amazon.com that people turn to whenever they think of searching for, or browsing through, things to buy online. It might not even be us that sells the product, said Bezos, but he wants Amazon to be the first find and discover shopping site that people turn to when they log on to shop. But this ‘e-commerce destination’ concept isn’t to be confused with portal, or start page sites such as Yahoo. Portal sites, said Bezos, had to offer things which people needed every single day, like news and stock quotes. That’s a great business, but it’s not our business, he said. Most people just don’t want to go e- shopping every single day, he explained. In building this online shopping mecca, Bezos said his company could no longer rely on the first to market advantages it had enjoyed when building a customer base in the book selling space. From now on, he warned, Amazon.com would have to create what he described as a superior customer experience and it would have to do it fast. And so in the absence of company profits, Bezos wants his shareholders to look at the investment choices he makes while building this new empire. Chief financial officer, Joy Covey, added that there would be no guarantees in the path towards profitability. The trend towards profit may be reversed at any time if Amazon chooses to invest in order to maintain its leadership position. á
