NEW YORK (06/28/2000) - Contrary to a recent investment company's financial analysis, Amazon.com Inc. is not about to run out of cash, according to company founder and Chief Executive Officer Jeff Bezos.
While acknowledging that Amazon.com is "a famously unprofitable company," Bezos said in a keynote address here Wednesday that Amazon.com will generate cash from operations this year.
Bezos noted that a report issued last Friday forecast that Amazon.com would run out of cash by September. Bezos called the report inaccurate and said the analyst who had written it had not called the company about it. Though Bezos did not mention the firm that issued the report, Lehman Brothers Inc. of New York last week put out a report that forecast that Amazon would run out of cash by the middle of the year.
After hitting a 52-week high of US$113 six months ago, Amazon.com hit a 52-week low of $32.50 last week after the report hit. At mid-day trading Wednesday, Amazon.com was trading at $38.50.
When asked at a question-and-answer session after his keynote when he thought the company would be profitable, Bezos said that he has made it a policy not to forecast profitability nor give analysts guidance on when the company would be profitable.
He did, however, say that he could give "progress reports" on specific segments of the business, and specified that the company's music, video and DVD (digital video disk) business is expected to be profitable this year. The business had $400 million in revenue in the first quarter and had an operating loss of $2 million. The book business was profitable in the fourth quarter of last year and this year's first quarter, he said.
Bezos said the company is investing heavily in features such as interface personalization, and that at this point in the evolution of the Internet it is important to lay the infrastructure to support the Internet economy of the future.
"I will tell you that no one cares more about profit than Amazon, but we also believe that we are in a time for investing," he said. "People underestimate tremendously what will happen 10 years from now."
Amazon.com, based in Seattle, is at http://www.amazon.com/.