Amazon invests in its Robotics armAmazon opens a new $40 million Robotics facility in the U.S.
Amazon expands its Robotics efforts, which began back in 2012, by opening a first-of-its-kind $40 million robotics factory in the U.S. Scott Dresser, vice president of Amazon Robotics, said:
This new innovation and manufacturing hub, along with its sister site up in North Reading, Massachusetts, places Amazon robots at the epicenter of robotics innovation here in Massachusetts for years to come.
Amazon amazes potential employees with bonusesAmazon is stepping up its Christmas recruitment efforts as a labor crunch in the U.K. continues to worsen, offering employees £3,000 to come work for them instead of rivals.
Amazon is taking steps to make sure its Christmas delivery schedule doesn’t fall prey to labor crunch-induced delays, and is offering a whopping £3,000 in bonuses to potential new employees. The company is looking to hire around 20,000 people across the U.K. for the Christmas crunch to avoid the same delays that other companies have already warned consumers about.
A regulatory rollercoaster for AmazonAmazon and its founder Jeff Bezos are in hot water with regulators, facing accusations of lying to Congress and a potential bipartisan antitrust bill.
A Reuters expose on Friday accused Amazon of copying products on their marketplace, making them into Amazon own products, and then promoting them over the originals on the platform. It hasn’t taken long for regulators to start sniffing around, and five U.S. lawmakers are now considering taking the case to the Justice Department for further investigation. The letter accuses Amazon and its founder Jeff Bezos of lying to Congress about its business practices, and wrote in a letter to Amazon CEO Andy Jassy:
We write in response to recent, credible reporting that directly contradicts the sworn testimony and representations of Amazon’s top executives—including former CEO Jeffrey Bezos—to the Committee about their company’s business practices during our investigation last Congress. At best, this reporting confirms that Amazon’s representatives misled the Committee.1 At worst, it demonstrates that they may have lied to Congress in possible violation of federal criminal law.
The letter adds to Amazon’s growing list of regulatory woes, which include plans for a bipartisan antirust bill that will ban big tech companies like Amazon and Google (GOOGL) from favoring their own products and services on their platforms.
Illustration by TradingView
AWS gets a new partnerNXP Semiconductors selects Amazon Web Services (AWS) as its preferred cloud provider.
Netherlands based NXP Semiconductors has chosen AWS as its preferred cloud provider, and will migrate most of its data centers to AWS. Olli Hyyppa, CIO and senior vice president of NXP Semiconductors, said:
AWS gives us the best scale, global presence, and selection of compute and storage options, with continuous improvements in price performance, that we need.
Amazon’s first UK retail outletAmazon is bolstering its high-street presence in the U.K., and has just opened its first non-food brick and mortar store in Kent.
Amazon is building up its U.K. presence by opening its first retail store, selling anything from toys to homeware items – and all the products sold have been given more than 4 stars by Amazon users.
QuickSight Q is availableAmazon makes QuickSight Q available.
Quick SIght Q, Amazon Web Services’s machine learning capability, is now generally available.
Amazon adds more climate conscious colleaguesAmazon’s two-year old Climate Pledge is going strong, and the e-commerce giant just announced 86 new signatories.
From an environmental stand-point, Amazon’s Climate Pledge is one of the most impactful corporate initiatives in tech. The e-commerce giant has just convinced another 86 companies to pledge their commitment to achieving net-zero carbon by 2040.
Markus Spiske / Unsplash
Amazon cracks down on review fraudAmazon is making moves to protect its consumers, extending its campaign against paid and fake reviews and shutting down 3,000 Chinese online stores.
Amazon began a clean-up campaign in May to protect its consumers from reviews that are either fake or incentivised, and the e-commerce giant has now officially shut down over 600 brands across 3,000 accounts for review fraud. It’s the biggest clean-up Amazon has ever done, and despite all the brands being Chinese, the company says it is not targeting China specifically. A spokesperson said the shut-downs have not affected the growth of Chinese companies on the platform.
Baptiste RIFFARD / Unsplash
Amazon adds some food delivery perksAmazon and Deliveroo partner up to bolster the Prime experience, offering consumers free deliveries on some of their orders.
Amazon Prime is the king of deliveries, and now that extends to food deliveries too. The e-commerce giant, which invested in Deliveroo two years ago, has struck a deal with the food delivery service to give Deliveroo Plus to anyone who is a Prime member in the U.K. During an investigation last year, competition regulators in the U.K. were concerned that combining the Prime network with Deliveroo might give the delivery service an unfair advantage, but ultimately didn’t find evidence of enough risk. Lisa Leung, Amazon UK’s head of prime and marketing, said about the deal:
We’re always looking for ways to offer even more value to Prime members giving them the best of shopping and entertainment. That is why we are excited for this offer with Deliveroo – so millions of Prime members in the UK and Ireland can get the convenience of great meals delivered fast.
Speaking of Prime – Amazon will also be hiring 125,000 employees across the U.S. to support its fulfillment and delivery centers.
Ross Sneddon / Unsplash
Amazon’s super-smart TVThe rumors are true: Amazon officially starts making its own TVs.
Amazon is looking to take over the living room, adding to its other lighting and personal assistant products to build its very own TV. The TVs will have an inbuilt Alexa, and are supposedly better than anything else on the crowded market – Amazon VP Daniel Rausc says:
Smart TVs have been around for decades, but we don’t think they’re really smart. They’re not really that capable compared to what customers would love to get from them. More often than not, TVs present a passive experience. We believe that with voice and ambient computing, TVs really have the potential to do so much more and to be so much smarter for customers.
In another move to keep its market dominance, Amazon is trying to combat a tight job market and make sure to have the best employees on the market by offering full college tuition for 750,000 workers.
Amazon TV rumorsReports roll in that Amazon is planning on launching its own branded TV as soon as October.
Amazon has been working on its own branded TV, which will be powered by Alexa, for about two years – and apparently the e-commerce giant will release the new product in the U.S. as early as next month.
Amazon announces note redemptionAmazon redeems $1,000,000,000 of debt.
Amazon will redeem its outstanding 3.300% Notes due December 5
AWS partners with Grafana LabsAmazon Web Services (AWS) teams up with Grafana Labs to offer cloud customers an easy way to use Grafana to manage their data on the AWS platform.
Amazon announced a new collab with Grafana Lab to release Amazon Managed Grafana to AWS customers, who will now be able to unify their data onto one dashboard.
Amazon hops onto BNPL bandwagonAmazon hops onto the buy-now-pay-later bandwagon after inking a deal with fintech Affirm – whose shares went soaring 46% on the news.
Amazon customers spending over $50 will now be able to split purchase payments into instalments after the e-commerce giant went into partnership with buy-now-pay-later fintech company Affirm (AFRM). The service is currently being tested on a select few customers and will be rolled out in the next few months.
Amazon joins PayPal (PYPL) and Square (SQ), which have both made the service a feature of their platforms in recent months. Eric Morse, Senior Vice President of Sales at Affirm, said:
By partnering with Amazon we’re bringing the transparency, predictability and affordability that Affirm provides today to the millions of people who shop on Amazon.com in the U.S. Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.
Shares of Affirm (AFRM) exploded just under 46% on Monday and Amazon stock lifted around 2%.
Amazon Global launches in South KoreaAmazon Global launches its own store in South Korea on e-commerce platform 11st.
Amazon and e-commerce platform 11st have joined forces to bring Amazon’s extensive offerings to the South Korean market.
Big Tech gets called to the Principal's officeAfter a string of cyber attacks cast a scary spotlight on security issues, the White House summons the heads of big tech companies like Alphabet, Apple and Amazon to discuss how to combat the growing threat.
On Wednesday, the White House held a cybersecurity summit with all the big tech industry leaders to discuss how to bolster the nation’s cybersecurity after a series of high profile cyber attacks like the SolarWinds and Colonial Pipeline hacks showed the gaps in the current system. Biden met with over 20 CEOs from a range of industries including big tech, insurance, energy and banking, and all of them walked away having made a pledge to bolster the country’s cybersecurity in some way, ranging from new industry standards to training employees. Biden said:
The reality is, most of our critical infrastructure is owned and operated by the private sector, and the federal government can’t meet this challenge alone.
Amazon’s Andy Jassy said the company will share with the public the training tools it uses to help its own employees guard against cybersecurity, and will be sending out free multi-factor authentication devices for Amazon Web Services for an added level of safety.
Barrons feeds the bullsAmazon stock is “unstoppable” according to Barrons, which reckons that Amazon Web Services alone justifies the e-commerce giants’ $1.65 trillion market cap.
Barrons feeds the bulls, pointing out how Big Tech has absolutely thrived during the pandemic – Amazon, Facebook, Apple, Microsoft, and Alphabet alone generated a combined revenue of $332 billion in the second quarter, up 36% from the same period the year before. Despite that, big tech is facing a tough time as the economy re-opens and the world goes back to a less digital lifestyle. Amazon is one of the most vulnerable to that shift as customers are suddenly able to shop in person for the first time since the pandemic, diminishing Amazon’s shine. Despite that, Amazon has been referred to as “unstoppable”, largely owing to its burgeoning Amazon Web Services – growth in the sentiment is increasing, and revenue from the cloud business is set to hit $100 billion by 2023. The analysts wrote:
Growth at Amazon Web Services is accelerating, and revenue from the unit could hit an annualized $100 billion by 2023. Valuing that business at, say, 15 times sales (most cloud application companies fetch higher valuations than that), gives you a market cap of $1.5 trillion, meaning that investors are getting Amazon’s e-commerce business and its nascent advertising business almost for free.
Brick and Mortar is backAs the rest of the world goes digital, Amazon is experimenting with a return to traditional brick and mortar with plans to open its own department store.
E-commerce giant Amazon has completed the whole online domination thing, and is now taking things old school with plans to open several physical Amazon storefronts that will reportedly operate like large department stores, marking the beginning of a new era for the pioneering company. The stores are said to be planned around popular stores like Noordstrom and Bloomingdales, at a slightly scaled down level. Clearly the market is already paying attention, with other big dogs in the space like Target (TGT) and Best Buy (BBY) sinking in pre-market trading.
Don’t worry though, the company is always working to improve its online services too, with Amazon Web Services yesterday launching a new database management system called MemoryDB.
Sangga Rima Roman Selia / Unsplash
Amazon culls Chinese sellers over fake reviewsFollowing a Chinese regulatory whipcrack, Amazon comes down hard on Chinese sellers with fake reviews on its platform, dropping over 50,000 marketplace accounts in the region.
A major portion of e-commerce giant Amazon’s online store is made up of Chinese sellers and goods – in January it was estimated that over 75% of new sellers on the marketplace were from China. These companies use Amazon as a way to enter the U.S. market as competition and regulatory obstacles become more and more challenging, and they often write fake reviews for products to get Amazon’s attention and boost their digital storefront on the site. Amazon’s former policy of offering freebies in return for a guaranteed written review probably didn’t help matters, and to its credit, the firm soon realized the practice was compromising the integrity of the product and its reviews, and began disallowing ‘pay-for-praise’ schemes across the platform.
Now, over 50,000 Chinese sellers on Amazon’s ecommerce platform have been dropped from the platform as punishment for bending the rules and pushing fake reviews, leading to losses in sales of up to 100 billion yuan ($15.4 billion) for the sellers that have lost their place. The crackdown comes not long after Chinese regulators issued brand new antitrust rules that also attempt to restrict fake reviews online. Amazon insists that it is not targeting Chinese companies specifically (despite only Chinese companies getting the chop).
It’s a fairly major deal for the ones affected though. The President of the Shenzhen Cross-Border E-Commerce Association, which announced the news, said:
Suppliers cannot be repaid, bank loans cannot be applied for, employees are facing unemployment, and the profits of the past few years have been emptied overnight. (The industry) has been almost completely broken.
Amazon takes Walmart's crownStep aside Walmart, there’s a new king in town. Amazon is now the largest retailer outside of China, after people spent over $610 billion on the site in the last year.
Amazon is reaping the rewards of its pandemic-fuelled growth, and after its sales and those of third party sellers on its e-commerce platform overtook that of Walmart’s (WMT) in the year ending in June. Keen shoppers have splurged over $610 billion on Amazon in the last year, eclipsing the $566 billion Walmart (WMT) can boast – the first time that another company has taken the crown since 1990, making Bezos’ baby the largest retailer outside of China.
The sky's the limit for Amazon deliveriesAmazon is making moves to boost its already booming business, opening a brand new $1.5 billion air hub to perfect its deliveries and logistics.
After four years of planning and construction, Amazon’s brand new air cargo hub is officially in business. On Wednesday, the e-commerce giant cut the metaphorical ribbon on the $1.5 billion hub, which is based out of the Cincinnati/Northern Kentucky International Airport and will serve as the central hub for the company’s U.S. cargo operations, speedily transporting goods across the country. The project has been in the works for over four years, with former CEO Jeff Bezos breaking ground in 2019, and is expected to bring in over 2,000 jobs for region. The grand opening is a massive milestone for the company’s growing air cargo segment, Amazon Air, which launched in 2016 and already operates out of 40 airports around the country, building on its already impressive network of warehouse and delivery vehicles that work to ensure those Amazon packages arrive in a timely manner on our doorsteps.
The 800,000-square-foot sortation building sits on an over 600-acre campus that features seven buildings, an expansive new ramp for aircraft parking, and a multi-story vehicle parking structure. The sortation facility is equipped with the innovative use of robotics technology that helps move and sort packages—including robotic arms and mobile drive units that transport packages across the building—miles of interlinked conveyors, and ergonomic workstations that support a comfortable work environment for employees. The building will also feature a solar rooftop scheduled for installation over the next year, and all energy generated from the panels will feed directly into the electrical grid of the local community.
Wonderful communities and diverse teams like this are the heart and soul of our operations. We’re excited to get rolling in Northern Kentucky, and we’re thrilled to employ thousands of fantastic people from the area in this next-generation, highly sophisticated facility that will connect our air cargo network for years to come,
said Vice President of Amazon Global Air Sarah Rhoads.
Nathan Coats / Flickr
Amazon's Q2 earnings diveDespite posting its third $100 billion quarter in a row, Amazon sinks nearly 8% on Friday after missing expectations with its second quarter earnings.
Friday saw Amazon, along with the broader tech market, take a hit after the e-commerce giant released second quarter results that missed on revenue expectations. The online retail giant posted earnings per share of $15.12 compared to expectations of $12.30, and revenue rolled in at $113.08 billion compared to the $115.2 analysts were calling for. Revenue did see a jump of 27% year on year, the third billion-dollar quarter in a row, but not quite in line with Amazon standards at this point considering the 41% increase the company reported this time last year. It marks the company’s first time missing revenue expectations in three years.
Echoing similar sentiments from tech giants like Apple (AAPL) and Facebook (FB), Amazon expects growth to slow even further going into the third quarter, as companies begin to lap the pandemic highs of last year. Guidance calls for sales of between $106 and $112 billion, which would represent growth of between 10% and 16% – well below estimates of $119.2 billion.
Our customers are safe and healthy and ordering from us. And we know that there’ll be more vacations or be more mobility. They’ll be things that probably people shied away from last year and that’s all good. But it does tend to lead them to do other things besides shop. So we’re just adjusting our run rates in the, in the period that we see that happening.
CFO Brian Olsavsky said on a call with reporters.
The news did not go over well with Wall Street. Amazon lost 7.56% on Friday and brought the S&P 500 and Dow Jones Industrial averages down by around 0.5%. To be fair though, the firm does have a habit of falling following an earnings beat, no matter how impressive the numbers. In the last three years, the company has reported nine earnings beats, and six of those have led to a drop in share price.
Amazon edges ahead in the satellite space raceBranson may have beat Bezos to outer space, but the billionaire's OG business Amazon is catching up in a race of its own against Musk’s SpaceX.
Former Amazon CEO Jeff Bezos may have lost the billionaire race to space to Richard Branson, but his former baby is making strong headway in the intensifying race to develop satellite internet. There are some pretty big players involved: including Elon Musk’s Starlink Network, SoftBank (SFTBY) (backed OneWeb), and (until recently) Zuckerberg’s Athena from Facebook (FB). These techno-kings and their pioneering companies are racing to develop low Earth-orbit satellite networks that will deliver high speed internet globally. The competition is heating up and the stakes are getting high, and it was confirmed on Tuesday that Facebook (FB) has bowed out after Amazon acquired its entire internet satellite team. It’s a huge step for Amazon, and will bolster its $10 billion efforts to compete with SpaceX’s Starlink via its own Project Kuiper satellite network.
Amazon got approval from the Federal Communications Commission (FCC) back in July 2020 to launch and operate 3,236 internet satellites to form the backbone of Project Kuiper, which hopes to provide high-speed internet to households across the U.S. that don't currently have the luxury. It’s worth noting that Starlink definitely has a headstart – with over 1,800 satellites already in space, the network is expected to provide continuous coverage by September this year. There have been a fair few collisions in the race so far, and the billionaires butted heads in January after Starlink requested permission to move some of its satellites lower... funnily enough, right about the same spot that Amazon planned to launch its own satellites. As you can imagine, things got messy, and spilled into the streets when Musk took the battle to Twitter. But Starlink ultimately came out on top and now Amazon will have to adjust its Project Kuiper plans accordingly.
Lucky for the e-commerce giant, Facebook’s (FB) skilled team of 12 has joined the existing 500 experts already working on Project Kuiper. After receiving its FCC authorization last year, Amazon has to send half of its planned satellites (around 1,600) out to orbit by July 2026. Considering it hasn’t yet launched any, the team will likely need all the help it can get to catch up.
Amazon stock stayed pretty steady, though Facebook lost 1.27% in yesterday’s trading.
Optimism for Amazon as Pentagon scraps JEDIAmazon starts the week with a boost of nearly 5% after the Pentagon cancels its $10 billion JEDI contract with Microsoft, potentially paving the way for Amazon to push its way in.
Shares of Amazon got a bump of 4.69% on Tuesday after the U.S. Department of Defense called off a $10 billion cloud contract that was the topic of an ongoing legal battle between Amazon and Microsoft. The JEDI (Joint Enterprise Defense Infrastructure) deal was first announced in 2018, and Amazon Web Services (AWS) was widely expected to win the project. It was a bit of a kick in the teeth when Microsoft got awarded the prestige of the multi-billion dollar cloud deal, especially as the company was widely viewed to be a late arrival to the cloud game. JEDI has been the subject of a bunch of legal entanglements even since, as Amazon vehemently argued against the decision, claiming that the then-President Donanld Trump had placed unfair pressure on officials to choose Microsoft. In fact, the deal is now so far behind schedule that the contact doesn't even fulfil DoD requirements anymore.
JEDI might be a bust, but the Pentagon still has $10 billion to spend on its cloud infrastructure, leading to the launch of a brand new multi-vendor contract called the Joint Warfighter Cloud Capability contract. Who’s gonna win this one? Stay tuned to see Amazon and Microsoft once again battle it out – although hopefully this time, it might be a slightly fairer fight.
Jassy takes the reinsJeff Bezos officially steps down as Amazon CEO, leaving the e-commerce giant to enter a new chapter with Andy Jassy at the helm.
Amazon founder Jeff Bezos has finally and officially handed over the reins Jassy, leaving him the challenge of navigating the company through the post-pandemic world. The date of the handover, July 5, has sentimental value to both Bezos and the company, as it’s the same day that Amazon was incorporated in 1994, exactly 27 years ago.
It was first announced in February that Bezos would be leaving his post and letting Andy Jassy take over, a home-grown talent who has led Amazon’s cloud division, Amazon Web Services, since 2003. Giving Bezos more time to focus on shooting off into space on his rocketship.
The market clearly has confidence in the new boss – the price bumped over 2% on Monday and was up almost 5% in Tuesday morning trading.
Hear the lion roarAfter much speculation, Amazon and MGM are officially merging in a deal worth $8.45 billion.
In Amazon’s most ambitious move yet into the entertainment bizz, the e-commerce company is buying MGM Studios (they’re the ones with the famous roaring golden lion logo) for $8.45 billion, the two companies announced on Wednesday. The purchase will be Amazon’s second biggest ever, and it’s the second major media merger in as many weeks after AT&T and Discovery joined forces. It’s all part of a market-wide media consolidation that is throwing together big tech and Hollywood, and changing the landscape of consumer entertainment. The deal shows how eager Amazon is to spend some serious dosh as it fights to stay relevant in the saturated streaming market. Other media giants like Netdlix and Disney have also been looking to boost their content libraries, but Amazon spent over $11 billion on video and music content in 2020, up from $7.8 billion the year before, and it’s clear that Bezos is serious about making his mark in the space.
The real financial value behind this deal is the treasure trove of in the deep catalog that we plan to reimagine and develop together with MGM’s talented team. It's very exciting and provides so many opportunities for high-quality storytelling,
said Mike Hopkins, senior VP of Prime Video and Amazon Studios.
Amazon's turn in the firing lineJust as Apple’s antitrust case wraps up, another begins. Amazon is being sued by Washington DC over the impact of its pricing for merchants on consumers. Looks like the market has faith in its firepower though, because the price barely budges.
As the antitrust battle between Apple and Epic games draws to a close, big tech is hit with another lawsuit as Washington DC hands Amazon its first antitrust case in the U.S.
Karl Racine, attorney-general for the District of Columbia has accused Amazon of violating the district’s competition laws by forcing merchants to follow restrictive selling rules and crushing competition. The problem is that the e-commerce giant charges third-party merchants a fee of up to 40% of product price through its website, but at the same time, it doesn't allow its merchants to sell those products for a lower amount on other platforms (including their own websites, or other popular sites like Walmart) – meaning that consumers are having to pay that 40% mark-up no matter where they buy the product, merchants are having to overcharge for their products, and other online retailers don't really stand a chance.
The lawsuit comes as an army of attorneys general take fire at big tech companies with charges of anti-competitive behavior – and notably, Karl Racine is also the guy behind the antitrust cases against Google and Facebook filed in the last couple of years. Amazon has already been the target of a lawsuit in the EU over the treatment of its merchants, but this is the first time it’s happened in the U.S. Unsurprisingly, Amazon has disagreed with the lawsuit, saying that in fact its policies always aim to keep prices low.
The DC attorney general has it exactly backwards – sellers set their own prices for the products they offer in our store. Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively,
an Amazon spokesperson said
The name's Bezos. Jeff Bezos...Amazon is pulling out the martinis (shaken, not stirred) while in talks with MGM Studios about acquiring the iconic film studio behind the James Bond franchise.
News hit the stands that Amazon is rumored to be in talks with MGM, which is one of Hollywood’s most famous film studios (they’re the people with the roaring golden lion logo, you know the one) and one of the few left that hasn’t been taken over by a big conglomerate on the back of a wave of mega-consolidation. Warner Bros is now operating within Discovery (they’ve just moved over from AT&T), Paramount sits within ViacomCBS, and Fox is inside Disney.
The MGM move comes on the back of a major revamp of Amazon’s entertainment plans, for which they’ve called in the big man himself – staff were told last week that CEO Jeff Bezos would be coming back to the company to take control of a new division, the ‘Global Media & Entertainment’ organisation”. The new segment will include all of the company's entertainment content, the breadth of which has been expanding in recent years. Last year, the ecommerce giant spent $11 billion on music and film content for Prime, up from $7.8 billion on 2019, and has been sneaking its sticky little media fingers into all sorts of other pies, including a deal with NFL worth over $1 billion per year to show Thursday night Football. In its most recent earnings, Bezos shared that Prime now has over 200 million members, so things are off to a good start.
A deal between the two could be the beginning of a whole new round of consolidation, kicked off by Monday’s deal between AT&T and Discovery. People have been sniffing around MGM for a while now, but the potential $9 billion price tag on this deal is higher than even Apple was willing to talk about three years ago. Amazon’s deep pockets could be what sets the company apart from the rest – Bezos is certainly putting his money where his mouth is. Investors are staying cautious for now though, and the share price barely shifted on the news.
Amazon shakes the magic money treePeople are wondering why Amazon (one of the richest companies in the world) is borrowing $18.5 billion in a debt sale. Does it need the cash? It spooks the market slightly, sending prices down just over 3%.
Amazon issued a sizable $18.5 billion of debt in eight parts, apparently in order to buy back stock and refinance debt – and proving that even one of the richest companies in the world can be tempted by cheap borrowing costs. As of the end of March, Amazon held over $73 billion in cash, equivalents, and marketable securities, and the company posted its second quarterly revenue in the $100 billion club, so it’s not like it needs the dough.
This is Amazon’s biggest bond sale, and it’s the second-largest to take place this year after Verizon’s $25 billion offering in March. The online giant has actually been on a bit of a shopping spree since the pandemic began, building data centers and new warehouses around the world as it deals with the surge in demand spiked by the pandemic. Its purchases of equipment and property totalled $45 billion for 2020, compared to $20 billion the year before.
The price of the debt was obviously just too good to pass up - on the two-year portion of the debt it paid just 0.1 percentage points above the equivalent US treasury bill (according to Refinitiv data) – showing that bond investors see the debt as super low risk.
“They can grow into this leverage. If you’re able to borrow for reasonably cheap, and then you’re able to get the operating leverage to go with it, it results in a lot of earnings,”
said head of North America investment grade at Incesco, Matt Brill, to Bloomberg TV.
Amazon defeats unionization effortAmazon sees off attempts to create the company’s first unionized warehouse as workers vote against it by 1,798 to 738.
The company has historically opposed unionization attempts, despite regular complaints about staff conditions.
The Retail Wholesale and Department Store Union had organized a landmark vote that would have created the first ever Amazon workers union, at a facility in Alabama. The union lost the vote, but said it would appeal the decision.
It accused Amazon of interfering with the right of employees to vote in a "free and fair election" by lying to staff about the implications of the vote in mandatory meetings and pushing the postal service to install a mailbox on company grounds in an effort to monitor the vote.
Amazon denied this and said its workers had spoken.
Investors also had their say, pushing the stock up 2.2% on daily basis to close at $3,372 on April 9.
Prime Video historyAmazon Prime Video becomes the first streaming service to secure exclusive broadcast rights for the National Football League.
Amazon scored with a 10-year exclusive broadcast agreement to show 15 Thursday night football games and one pre-season match per year in the US. The deal was set to begin in 2023.
It was the latest bit of good news for the company after a Rhode Island man was sentenced to 30 months in prison for defrauding Amazon of more than $50,000 in a product return scheme. A scammer who falsely offered work-from-home Amazon Associate referral opportunities was also banned from telemarketing and fined more than $2 million.
The stock rose 1.5% over the next trading day to $3,074.
The way to AmarilloAmazon unveils plans to open its first fulfillment center in Amarillo Texas.
The one million sq ft facility would open in early 2022, creating more than 500 new jobs.
Amazon Web Services (AWS) also had a strong start to March, with a second software and cloud infrastructure center launched in Japan and the PGA Tour became the latest AWS user.
The stock had been struggling in March as the global coronavirus vaccine rollout and easing of lockdown restrictions signalled a return to normality. It also meant investors were shifting towards stocks focused on the so-called reopening economy. Amazon’s share price hit $3,113 by March 11. This was up from $2,951 just a week before but below its peak of $3,380 that was reached in February.
Amazon files two fake goods lawsuitsIt was a busy start to February for Amazon. As well as announcing that its founder Jeff Bezos would step back, the company launched lawsuits against four individuals selling fake Salvatore Ferragamo designer goods and separately against sellers listing counterfeit Dutch Blitz card games.
It was the latest action taken by Amazon’s counterfeit crimes unit, which had been kept busy since launching in 2020.
There was also another fulfilment center opening announcement for Tennessee, and Amazon said its tech hub in Boston would be expanded, both creating more than 1,000 new roles.
The markets were still digesting the changes at the top of the company and Bezos being replaced as chief executive. The stock hit $3,262 by the close of trading on February 11, down 2.3% since the start of the month.
Bezos to step backThe reliance on online deliveries by the public during the pandemic helps Amazon post record sales for the fourth quarter of 2020 but it’s the stepping back of its founder and chief executive that dominates the Q4 earnings report and market reaction.
Amazon reported net sales were up 44% annually for the fourth quarter of 2020 to $125.6 billion and at $386 billion for the year.
Net income was $7.2 billion in the fourth quarter or $14.09 per share and had risen to $21.3 billion, or $41.83 per share, during 2020.
But beyond keeping households in groceries and Kindles as well as creating more jobs during the pandemic, the big news was that Amazon founder Jeff Bezos was stepping back as CEO. The company said he would become executive chair in the third quarter of 2021 and Andy Jassy, who ran Amazon Web Services, would take over as chief executive of the whole company.
Amazon shares had been rising in the run up to the results but markets aren’t always happy with change, especially when such a high-profile individual changes their role. The stock hit a high of $3,380 when the results were released on February 2 but sank 2% over the next day to $3,312.
3,500 new jobs as Amazon expandsAmazon announces that it will open six new fulfillment and sorting centers in Detriot, creating more than 3,500 jobs.
The company committed to building five new buildings to support operations such as warehouses closer to customers. Up in the skies, it also added to its aircraft fleet to speed up deliveries across the US and purchased eleven Boeing 767-300s for the first time.
Amazon also launched a $2 billion Housing Equity Fund to support the building of 20,000 affordable homes in areas such as Washington State, Arlington and Nashville where the company expected to have at least 5,000 employees each in the coming years.
The stock had been dropping since the turn of the year and closed on January 6 at $3,138. This was down 3.6% since the start of the year.
Amazon ends 2020 above $3,000Stockmarkets had taken a battering during the pandemic and many ended the year lower than where they started. Amazon defied this though as its online delivery service proved crucial during the coronavirus outbreak – both for consumers who couldn’t go outside to real shops, and for sellers forced to move online in order to continue operating during lockdown restrictions.
Amazon ended the year with plans for five new fulfilment centers to meet demand for goods and deliveries. It opened its first facility in Louisiana and South Dakota, two new centers in San Antonio and a new one in North Little Rock.
Social network Twitter also became the latest high-profile Amazon Web Services user, signing up to Amazon’s cloud storage and security tools.
Amazon’s stock ended the year at $3,256, up 71% since the start of the year. It outperformed the NASDAQ, which rose 43.2% over 2020 as the tech-dominated index benefited from a shift towards digitization during the pandemic.
Amazon becomes largest corporate purchaser of renewable energyAmazon becomes the world’s largest purchaser of renewable energy after adding 26 new wind and solar projects in Australia, France, Germany, Italy, South Africa, Sweden, the U.K. and U.S.
The company had now invested in 6.5 GW of wind and solar projects to supply its operations with more than 18 million megawatt hours of renewable energy annually. This was enough to power 1.7 million US homes for one year. The move supported Amazon’s goal to reach net-zero carbon emissions across its business by 2040. Part of that commitment was to power Amazon’s infrastructure with 100% renewable energy and the company was now on a path to achieve this milestone by 2025, five years ahead of the initial 2030 target.
It came as Amazon promised thousands more jobs in early December with new fulfilment center openings in Nevada, Oklahoma City, and Missouri. It also announced plans to open a second Amazon Web Services software and cloud infrastructure center in Melbourne, Australia.
The company also showed its charitable side with a $2.25 million donation to homeless charity The Housing Fund to provide grants to Nashville residents whose income was hit by the pandemic, tax increases tornados and job losses.
None of this seemed to be enough to power the stock though and it fell to $3,101 on December 10, down 3.6% from the start of the month.
Unsplash / Zbynek Burival
Amazon and Zoom extend relationshipAmazon and Zoom are two big winners of the pandemic, benefiting from a shift to online deliveries and remote working. Video conferencing tool Zoom was already an Amazon Web Services user, and said it would continue using the storage and security software it provides.
It came as Amazon launched an intellectual property accelerator in Europe to link its sellers with lawyers who could help protect their brands and tackle fake goods.
The stock ended November at $3,168, up 5.4% since the start of November.
Amazon clamps down on unfair pricingAmazon stops and reports three of its online stores for selling hand sanitiser at “egregious prices.”
Less than scrupulous individuals were using the pandemic to try to rip people off. Some of the most in-demand products were face masks, hand sanitiser, and toilet paper. Amazon spotted three sellers overcharging for hand sanitiser. They were reported to authorities and ordered to pay more than $52,000 in penalties and $23,000 in consumer redress.
Amazon’s legal team was busy in November as it also filed a lawsuit against counterfeiters using social media to sell fake goods through its website.
In more positive news, Amazon also launched a prescription medicine delivery service in the US.
Using a secure pharmacy profile, customers could add their insurance information, manage prescriptions, and choose payment options before checking out.
The stock took a 1% hit to close at $3,105 by the close of the next trading day.
New fulfillment centersTwo new fulfillment centers are announced, creating thousands of jobs.
The company unveiled plans for a new one million sq ft facility in Missouri and a 700,000 sq ft site in Nebraska. This would create more than 1,500 jobs combined.
The stock had already been bouncing around in November amid the uncertainty following the US election on November 3 as Donald Trump refused to concede defeat to Joe Biden.
Amazon’s share price was at $3,311 by the close of November 6, up 10.3% since the start of the month.
Amazon profits from being a ‘stay at home stock’Amazon stays in profit for the third quarter as sales triple.
Online remained the preferred mode of shopping for many as coronavirus infections remained high and people were told to avoid too much mixing. This helped Amazon become a “stay at home stock.”
Net sales increased 37% annually to $96.1 billion in the third quarter and profits increased to $6.3 billion or $12.37 per share, compared with net income of $2.1 billion, or $4.23 per share, a year before.
The company was also looking forward to a bumper holiday season, within Covid guidelines. Net sales for the fourth quarter were forecast to be between $112 billion and $121 billion, or to grow between 28% and 38% annually. Operating income was expected to be between $1 billion and $4.5 billion, compared with $3.9 billion in fourth quarter 2019. This guidance assumed approximately $4 billion of costs related to Covid-19 such as making fulfilment centers Covid-safe and testing staff.
That couldn’t stop the stock reflecting wider market volatility surrounding a political impasse on new economic stimulus in the US and the impending Presidential election between Donald Trump and Joe Biden. The stock was also hit on the same day after Amazon announced that an investigation had led to an arrest of a woman for a shipping fee scam. It exposed a flaw in Amazon’s systems that had allowed a Tampa Bay woman to reuse prepaid shipping labels generated for cancelled orders that would then be used to reimburse delivery costs from the retailer.
Amazon’s share price declined 5.4% to $3,036 by the next day’s close.
Amazon records another record Prime Day despite the pandemicPrime Day is delayed from its usual July schedule in 2020 due to the coronavirus pandemic, taking place in October instead.
This failed to stop shoppers taking advantage of discounts.
The two days of discounts for Prime members on October 13 and 14 wasn’t just good for Amazon. Third-party sellers surpassed $3.5 billion in sales on Prime Day — an almost 60% year-over-year increase, growing even more than Amazon’s retail business.
The stock rose to $3,443 during the sales on October 13 but investors weren’t buying into the stock as much by October 15 and it fell to $3,184 by October 21.
Amazon reports fired employee to the FBIAmazon reports a former employee to the authorities for falsely issuing refunds to himself and associates.
The company reported Vu Anh Nguyen to the FBI after its systems identified the suspicious refunds. He was arrested and charged with federal wire fraud and identity theft.
The arrest offset any gains the stock had late in September after launching a new Fire Stick and Echo devices, as well as in October when it expanded its donations to more than $2.5 million for underprivileged school pupils struggling to access food, shelter, clothing and educational supplies.
The stock fell 3.1% to $3,099 by the next day’s close on October 6.
Six defendants charged with bribing an Amazon employeeThe United States Attorney’s Office for the Western District of Washington charges six individuals with paying more than $100,000 in bribes to Amazon employees and contractors as part of a scheme to give third-party sellers an unfair advantage on Amazon Marketplace.
It was alleged that in return for bribes to at least 10 Amazon employees and consultants, the workers helped reinstate accounts that had been suspended due to customer safety complaints or restricted competitors.
Amazon backed the investigation and said it would:
Continue to pursue all measures to protect our store and hold bad actors accountable.
The investigation wasn’t good for Amazon’s share price, despite positive releases such as the launch of podcasts on Amazon Music, a new luxury store and a pledge to create 100,000 new full and part-time jobs across the US and Canada while many people were losing their livelihoods during the pandemic.
The stock fell to $2,960 by September 21, down 15.4% since the start of the month.
Amazon promises $100 million of business supportAmazon commits to spending an additional $100 million during 2020 to promote small businesses during Prime Day and through the holiday season.
Many businesses were trading online for the first time during the pandemic as their ability to see customers face-to-face was limited by lockdown rules. The retailer said it was on course to invest $18 billion in total this year to help businesses manage and grow their businesses. This included investments in logistics, tools, services, programs and more jobs.
The company had also been investing in product development. It incorporated Amazon Music into its video game streaming platform Twitch and launched a new fitness and wellbeing tracker wristband range called Amazon Halo that monitored sleep, physical activity, body fat and speech.
It was also announced that Amazon would add more than 1,800 Mercedes Benz electric vehicles to its delivery fleet in Europe, helping the company with its green credentials.
The stock hit a new high of $3,531 on September 2 as the markets backed Amazon’s support for small businesses and product development.
Unsplash / Giorgio Trovato
Fraud crackdowns and more fulfillment center jobsIT company 3M and Amazon collaborate to identify and stop a fraudulent scheme selling fake, defective and damaged respirator products in the retailer’s online stores.
There were plenty of people looking to take advantage of shoppers during the pandemic with fake goods. Amazon and 3M pursued legal action against sellers offering useless respirators and secured recovery of more than $192,000 from the defendants. This was donated to charity Direct Relief’s non-profit work to provide personal protective equipment to health workers.
Amazon also backed a separate investigation and prosecution for a wire fraud and money laundering case that had attempted to defraud the retailer. Four brothers from New York allegedly overcharged Amazon for wholesale orders by manipulating their systems to create fake invoices making it looked like more items were ordered. They attempted to dupe Amazon out of around $32 million.
It was a busy month for lawsuits as Amazon also filed a counterfeit case alongside KF Beauty against 16 individuals selling fakes.
Finally, the company committed to creating thousands more jobs through the opening of fulfilment and delivery centers in Tampa Bay, Phoenix and in Forney.
This all helped the stock rise to $3,297 by August 20, up 5.9%.
‘An unusual quarter’The shift to online deliveries during the pandemic continues to benefit Amazon as sales rise and profits hit a new high in the second quarter, ahead of its own expectations.
The company had delivered a glib update in the first quarter as it anticipated spending $4 billion of its profits to keep staff safe during the pandemic.
It had forecast a $1.5 billion loss but instead operating income rose to a record $5.8 billion in the second quarter, up from $3.1 billion previously.
That still included the $4 billion of coronavirus spending. The profits came off the back of a 40% annual rise in net sales to $88.9 billion as the pandemic had pushed more people to streaming and online groceries and other deliveries, much of which was being done through Amazon.
Net profits were $5.2 billion or $10.30 per share. Analysts had expected just $1.46 per share.
Chief executive Jeff Bezos described it as a “highly unusual quarter.” The stock rose 3.7% off the back of the results the next day to $3,164.
Unsplash / Sharon McCutcheon
Amazon unveils further fulfillment center investmentsInvestment in four fulfillment centers across the US is announced during July.
Amazon said it would open its first fulfillment center and second delivery station in Little Rock, plus a new facility in Pflugerville, Texas, El Paso, and Tennessee. This would create more than 4,000 jobs in total.
Amazon Web Services also launched an interactive video service for users to publish online web and mobile streams, while HSBC became one of the latest high-profile AWS users.
This failed to get the stock back up to its new high of $3,200 that was reached on July 10, and it closed the day at $2,986.
Unsplash / Ralston Smith
Amazon gets tough on counterfeits and climate changeAmazon launches a new crimes unit dedicated to tackling counterfeiters that violate the law and Amazon’s policies by listing fake products.
Amazon’s Counterfeit Crimes Unit was a global, multi-disciplinary team composed of former federal prosecutors, experienced investigators, and data analysts. Its first objective was to prevent a counterfeit from ever being listed in its store. Just days before, Amazon and Italian luxury brand Maison Valentino announced a joint lawsuit against New York-based Kaitlyn Pan Group, LLC and Hao Pan for counterfeiting its Valentino Garavani Rockstud shoes.
The company also launched a $2 billion climate pledge fund to invest in companies building products, services, and technologies to decarbonize the economy and protect the planet. It wasn’t clear if this would mean small Amazon deliveries would stop coming in massive boxes.
The stock had already been rising through June and hit $2,764 by the close of trading on June 23.
Amazon fights fraudAmazon files three lawsuits against fraudulent affiliate marketing schemes.
Cases were filed in Georgia, Michigan, and Texas to stop fraudulent affiliate marketing schemes that spammed email addresses with Amazon branded-emails to entice those receiving the emails to click on the links. The traffic was then directed to other online marketers operating phony Amazon-branded surveys.
It came as Amazon Web Services and messaging app Slack said they would work together on improving workplace tools. Instant messaging apps such as Slack had become popular due to remote working during the pandemic and Amazon’s partnership with Slack meant more features could be introduced such as chatbots and video calls. Slack was already a user of AWS cloud storage.
Meanwhile, Amazon Air expanded its aircraft fleet in early June to more than 80 aircraft. This would help meet increased demand for fast deliveries during the pandemic in the US as many shops were shut due to lockdown restrictions or some people were unwilling or unable to venture into stores. The fleet was also used by Amazon to transport essential personal protective equipment to frontline health workers and relief organizations to treat coronavirus cases.
These developments were backed by the markets and the stock hit $2,647 by June 10 – up 7.1% since the start of the month.
New product releases and support push stock to a record highAmazon is firmly becoming a stay-at-home stock, with its e-commerce services helping businesses move their sales online and more companies such as TC Energy and Lyell Immunopharma looking to develop online tools with Amazon Web Services.
Singaporean retailers were offered support to continue operating during the pandemic by selling their goods on Amazon. The company also offered one-time grants of up to S$9,000 for businesses registering with it.
Meanwhile everyone was spending more time indoors during national lockdowns and now you could twiddle your thumbs on a brand-new Fire HD 8, which Amazon said was 30% faster, had more storage and longer battery life.
The stock hit a new high of $2,497 by the close of trading on May 20, up 9.2%.
Amazon engineer quits over worker treatmentAmazon Web Services (AWS) engineer Tim Bray quits in protest at the treatment of workers during the pandemic.
Bray, a vice president and distinguished engineer at AWS, said on his personal blog that he had left his role over Amazon firing a group of employees who publicly protested conditions at its warehouses during the coronavirus COVID-19 pandemic.
May 1 was my last day as a VP and distinguished engineer at Amazon Web Services, after five years and five months of rewarding fun. I quit in dismay at Amazon firing whistleblowers who were making noise about warehouse employees frightened of COVID-19. Management could have objected to the event, or demanded that outsiders be excluded, or that leadership be represented, or any number of other things; there was plenty of time. Instead, they just fired the activists.
The shock resignation and protests pushed the stock down 7.6% to close at $2,286 on May 1.
Flickr / Bryan Jones
Pandemic infects Amazon’s profitsThe coronavirus outbreak and lockdowns in some of Amazon’s key markets fail to make a dent in its first quarter sales but it's spending increasing amounts on meeting demand and keeping employees safe.
The pandemic had forced businesses to close in March and many shoppers shifted online.
Amazon’s net sales for the first quarter reflected the start of this as revenue increased 26% annually to $75.5 billion. But the company had to spend to keep up with demand.
This meant hiring more staff and setting up a testing facility to keep employees safe and monitor for coronavirus infection.
Operating expenses rose 29% annually during the quarter to $71 billion, pushing operating income down to $4 billion in the first quarter, compared with $4.4 billion a year before.
Net income also decreased from $3.6 billion to $2.5 billion over the same period.
There was more to come though as chief executive Jeff Bezos warned shareholders to “take a seat” as he revealed the company expected to spend the $4 billion it would usually make in profits for the next quarter on looking after staff and customers during the pandemic.
This including providing personal protective equipment and cleaning stations for employees as well as hiring more people to meet demand for online deliveries. It said it could make a second quarter operating loss of $1.5 billion.
I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.
However, the stock still followed the wider market uncertainty and fell 7.5% to $2,286 by the next day’s close.
AWS launches in Italy and South AfricaAmazon Web Service (AWS) opens data centers in Italy and South Africa to provide local cloud support for developers running applications and content in the countries.
This was the latest rollout of AWS tools during April. Users were also given access to augmented artificial intelligence software, a cloud-based database management system called Amazon Keyspaces, and an easier way for companies to link their own systems and apps with AWS called Amazon AppFlow without having to write separate computer code.
The stock hit $2,314 by the close of the trading day on April 28, up 21% from the start of the month. It later hit a new record high of $2,474 on April 30.
Amazon donates laptops to Seattle school familiesAmazon shows its charitable side by donating 8,200 laptops to help pupils whose schools had to close as a result of the coronavirus pandemic.
The company supplied the laptops to public schools in its hometown of Seattle so students could continue taking part in lessons online. The donation was worth more than $2,000.
Amazon also launched the Education Equity Fund, which helped less privileged students access technology, technical support and resources so they could continue learning during the pandemic.
Despite political and economic uncertainty in the markets, the stock managed to rise over this period, to hit a new high of $2,408 on April 17.
Amazon fires workers who led coronavirus strikesAmazon may be doing well financially as more people switch to online shopping during the pandemic, but this is putting even more pressure on staff, who complain about unsafe conditions.
Chris Smalls, an assistant manager at one of Amazon’s New York facilities was fired after leading a workout over poor pay and a lack of adequate protective equipment. There had been reports of multiple positive Covid tests at Amazon’s JFK8 warehouse in Staten Island, and Smalls led a walkout and protest that called for it to be shut and cleaned.
However, Amazon’s version of events was that Smalls had refused to self-isolate when he had been in contact with a diagnosed associate, an accusation he denied.
Another employee was fired in Minnesota weeks later for leading a similar protest over working conditions. The company claimed this employee was sacked for failing to follow social distancing rules.
Two members of staff were also fired for tweeting their support for the protest.
The optics didn’t look good for investors amid sensitivity about Covid safety in the workplace. The stock fell 2.1% over the next day to $1,907.
Amazon adds more AWS services and renewable energy projectsAmazon Web Services (AWS) users are given access to a new tool that analyses data security faster to spot flaws.
Amazon Detective used machine learning and statistical analysis to spot potential security issues or suspicious activity in their computer systems.
The company’s AWS centers were also given another green boost as Amazon unveiled four new renewable energy wind and solar projects in Australia, Sweden, Spain and the US to help power its servers and data hubs. It formed part of Amazon’s commitment to reach 80% renewable energy by 2024 and 100% renewable energy by 2030 on the path to net zero carbon by 2040.
The stock had been declining since mid-February as the coronavirus outbreak hit Europe and the US. This panicked the markets and Amazon’s stock fell below the $2,000 mark but still managed to finish March at $1,949.
Amazon adds more AWS users3M and Second Spectrum sign up to AWS.
IT company 3M and sports analytics firm Second Spectrum are announced as the latest users of Amazon Web Services’ cloud storage systems.
Earlier in the month, Amazon had also launched its Future Engineer Teacher of the Year Awards to grant prizes of $25,000 to seven computer science educators across the US. That’s a lot of whiteboard pens or whatever teachers use these days.
The stock remained at around $2,100.
Amazon surprises itself in the fourth quarterAmazon beats its own expectations for the holiday season as billions of items are ordered over the festive period, pushing sales and profits up.
The company said its best-selling devices were the Echo Dot, Fire TV Stick 4K with Alexa Voice Remote, and Echo Show 5, as it reported net sales rising 21% annually during the fourth quarter to $87.4 billion. It also reached more than 150 million paid Prime members who benefited from one-day delivery.
Net income increased to $3.3 billion in the fourth quarter, or $6.47 per share, compared with $3 billion, or $6.04 per share, in the fourth quarter of 2018.
Amazon had expected operating income to be between $1.2 billion and $2.9 billion but it came out at $3.9 billion. Full-year sales were up 20% to $280.5 billion, with net profits at $11.6 billion or $23.01 per share.
Atlantic Equities analyst James Cordwell told Reuters:
We’re past the worst in terms of the margin pressure from the one-day shipping initiative. The stock rose 8% by the next day’s close to a new high of $2,008 as the markets backed the results.
A record breaking holiday seasonBillions of items were ordered worldwide and tens of millions of Amazon devices were purchased as the online retailer continues the tradition of record holiday seasons.
Toys, fashion, home and beauty items were the most popular departments during the festive period, with more than half a billion total items ordered, Amazon said. More than 100 million items were also sold by independent third-party sellers.
Amazon also announced that it would open a fifth fulfillment center in Florida, based in Deltona and creating more than 500 new jobs.
The stock was already rising for much of December and ended the year at $1,847, up 20% since the start of 2019.
Cyber Monday sets new Amazon shopping recordCyber Monday becomes the single biggest shopping day in Amazon’s history.
Amazon said customers worldwide purchased more toys this Black Friday and Cyber Monday, between November 29 and December 2, combined than ever before. Shoppers ordered more than 25 million items worldwide including Amazon devices, Lego and coffee makers.
The company also unveiled three new renewable energy projects in the US and Spain to help power its Amazon Web Services data centers and fulfillment facilities. New local AWS infrastructure was also opened in LA for the first time to provide better storage and software power in the city.
The stock had already gone above $1,800 on November 27 amid anticipation ahead of Black Friday and Cyber Monday sales but had been dropping since. It fell to $1,740 by December 5.
Pixabay / mmi9
Amazon tax affairs back in the spotlightAmazon’s tax affairs come under scrutiny again after it is accused in a report by transparency campaigners Fair Tax Mark of avoiding tax by shifting revenue and profits through tax havens.
Its behaviour was singled out alongside Facebook, Google, Netflix, Apple and Microsoft but Amazon was named as the worst offender.
Activists said the company paid just $3.4b billion in tax on its income so far this decade despite achieving revenues of $960.5bn and profits of $26.8bn.
Fair Tax Mark said this meant Amazon’s effective tax rate was 12.7% over the decade when the headline tax rate in the US has been 35% for most of that period.
Amazon said the report’s “suggestions are wrong” and that the company had “a 24% effective tax rate on profits from 2010-2018.”
It was the latest round of accusations faced by Amazon on its tax affairs and it was also reported to have previously been under investigation in China, Germany, Poland, South Korea, France, Japan, Ireland, Singapore, Luxembourg, Italy, Spain, the United States and Portugal.
This negative news pushed the stock down 2.3% between December 2 and December 5 to $1,740.
Unsplash / recha oktaviani
Fulfillment centers and offices expandA series of fulfillment center and office expansion announcements send the stock down.
First the company said on November 6 that it would create a robotics hub with 200 jobs in Massachusetts. On November 14 it said it would expand its human resources team in Las Vegas by opening a new 30,000 sq ft corporate office and creating 125 new jobs.
This was followed by an update on November 18 about a second fulfillment center to be built in Mississippi, creating 500 jobs, while on November 20 Amazon said it would expand its Florida warehouse to 1 million sq ft and add 500 new jobs.
Despite all that job creation, the markets seemed more concerned at the level of investment and spending. The stock had been at $1,795 on November 6 but fell to $1,734 by November 21, down 3.3%.
Amazon shows support for startups and scholarshipsAmazon opens applications for its second round of future engineer scholarships and launches a small business academy offering courses to help with digital strategy and brand building.
Launched in 2018, the future engineer scholarship provided $40,000 for students from underserved communities to pursue degrees in computer science.
Additionally, its small business academy offered a range of seminars and webinars to help entrepreneurs make the best use of the internet.
The markets liked to see Amazon support small firms and the less privileged and the stock hit $1,804 by the end of trading on November 4, up 1.5% since the end of October.
Amazon pushes Prime over profitsAmazon sacrifices profits as costs rise during the third quarter to meet one-day delivery needs and to prepare for the busy holiday season.
Sales were up during the quarter thanks to new Echo devices and Amazon’s new one-day Prime delivery service. But product development and getting deliveries out fast weighed on profits.
Amazon’s total operating expenses during the quarter were $66.8 billion, with $41 billion coming from the cost of sales and $10.1 billion on fulfilment.
That pushed its profits down to $2.1 billion for the quarter or $4.23 per share compared with $2.9 billion, or $5.75 diluted share, in the third quarter 2018.
The fourth quarter festive period was often Amazon’s busiest but its guidance suggested a slowdown was coming as getting presents and products to customers quickly costs a lot of money.
Operating income was expected to be between $1.2 billion and $2.9 billion for the final three months of the year, compared with $3.8 billion in the fourth quarter of 2018.
That wasn’t on the market’s wishlist and the stock dipped 1% to $1,761 by the close of trading on October 25.
Amazon expands pickup points and renewable energy projectsCustomers can now pickup Amazon orders from thousands of new locations for free across the US.
More shoppers were given the option to collect packages from partner stores that were working with Amazon Counter. Health Mart and Stage Stores were announced as some of the latest locations.
The company also boosted its green credentials by announcing three new renewable energy projects in the US and the UK to power the grids that support is Amazon Web Services data centers.
The markets liked these moves and the stock rose 1% over the next day to $1,780.
Fulfilment centers expand and notes are redeemedAmazon announces its first fulfillment center in Idaho as it releases a new Kindle Fire HD and redeems $1,000,000,000 of debt.
The company said the new 650 sq ft fulfillment center would create more than 1,000 jobs. Amazon also said it planned to open a facility in Illinois, creating 500 new full-time jobs.
It came after the company redeemed its outstanding 2.600% notes that were due December 5 2019 and introduced a new 10-inch Fire HD device with 32GB of storage and up to 12 hours of battery life.
These developments help push the stock up to $1,787 by October 17, up 2.9% since the start of the month.
Amazon introduces array of new devicesTech and gadget geeks are served up a range of devices to make homes safer and cooler such as a smart oven and eight new Echo devices.
The company unveiled a new voice controlled smart oven that helps with the age-old question of whether the oven is properly preheated. It even aimed to cook food properly. No more burned roast dinners. Shoppers were also offered eight new Echo devices including an Echo Dot with a clock and wireless earbuds.
It came after Amazon announced plans to open a new 1 million sq ft fulfilment center in Scarborough, Toronto. Its twelfth in Canada. This would create 600 new jobs.
These developments didn’t do much to boost the stock though and it ended the month at $1,735, down 3% from the start of September.
Amazon expands tech hub and opens its own airportAmazon pledges to create 400 new jobs as it expands its Chicago tech hub and separately unveils plans for its first dedicated airport to support Amazon Air.
The company planned to expand its office in downtown Chicago by more than 70,000 sq ft, doubling its tech workforce in the city.
Meanwhile, Amazon said it would create 300 new jobs in Dallas with the opening of a regional air hub to support planes it leases for deliveries using Amazon Air.
The stock had suffered a bit of turbulence in recent weeks but managed to remain at around $1,800.
Wikimedia Commons / Nathan Coats
Amazon workers stage climate strikeStaff at Amazon’s Seattle headquarters walk out in protest over Amazon's climate policy.
The company’s workers demanded that the internet retail giant reach zero emissions by 2030, cut ties to oil and gas companies, and to stop funding lobbyist groups accused of spreading climate denialism.
They claimed in a letter that Amazon funded 68 members of Congress in 2018 who voted against climate legislation 100% of the time.
The stock took a small 0.6% dip from $1,831 to $1,820 over the next trading day.
The protest seemed to work though and Amazon has since committed to reach 80% renewable energy by 2024 and 100% renewable energy by 2030 at its sites on the path to net zero carbon by 2040.
Amazon unveils new devicesAmazon works with TV brands to launch smart TVs with Fire TV built in across Europe and North America. It also launches a new Fire TV Cube.
The company announced a lineup of more than 15 new Fire TV Edition products for customers around the globe, including the world’s first Fire TV Edition smart TV with built-in far-field voice control, the first OLED Fire TV Edition smart TV, and the first-ever Fire TV Edition soundbar.
Customers could also get their hands on an all-new Fire TV Cube with 4K Ultra HD content and new voice control features. It no longer mattered if you couldn’t find the remote.
It was also announced that the AmazonFresh food delivery service was expanding to Indianapolis.
The markets love a new product release and the stock rose 2.2% to $1,840 by the next day’s close.
New AWS tools releasedA range of new tools for Amazon Web Services users goes live and the company expands its Portland tech hub.
AWS users were given access to a new business forecasting tool and to software that organized data faster called Lake Formation.
It came as The Globe and Mail signed up to AWS cloud services and Amazon said it would create 400 new jobs at its Portland tech hub.
This wasn’t backed by the markets though and the stock fell to $1,749 by August 23, down 4% from August 21.
Amazon backs more renewable energy projectsAmazon announces its 65th and 66th renewable energy projects to power its Amazon Web Services (AWS) datacenters.
The company said its newest renewable energy project in the European Union would be located in Cork, Ireland, the second Amazon Wind Farm in the country. It also unveiled plans for its newest renewable energy project in the US, located in Virginia, its seventh Amazon Solar Farm in the area.
Both projects were expected to begin producing clean energy in 2020 and supply clean energy to the grids supporting the company’s Amazon Web Services datacenters.
The stock had already been falling since its second quarter results were announced on July 25 and this spending as well as the launch of AWS in the Middle East and plans for a new fulfillment center in Pittsburgh seemed to worry the markets.
The stock dropped to $1,765 by August 5, down 4.8% since the start of the month.
Amazon underdelivers in the second quarterPrime Day boosts sales again the second quarter but Amazon’s profits fail to improve much year-on-year and its forecasts disappoint.
A shift to one-day delivery for Prime users and the annual Prime Day event – which was actually two days this year on July 15 and 16- helped net sales rise 20% annually to $63.4 billion.
Net income increased to $2.6 billion in the second quarter, or $5.22 per share, which was only just above the profits of $2.5 billion, or $5.07 per share, in the second quarter of 2018.
Operating income was expected to be between $2.1 billion and $3.1 billion in the third quarter, compared with $3.7 billion in the third quarter of 2018.
The markets expected more and the stock fell 1.5% by the next day’s close to $1,943 and kept dropping across the rest of the month.
A record Prime DayAmazon hails another record Prime Day, welcoming new members and selling more than 175 million items on July 15 and July 16.
The company’s equivalent of Black Friday for its Prime members continued to keep the tills ringing. Millions of orders came from 18 countries and it was the biggest event ever on Amazon for Alexa devices with screens, such as Echo Show and Echo Show 5.
The stock rose to record highs during the Prime Day periods of July 15 and July 16 but started dropping after July 17 as the markets weren’t too happy about spending on two new fufillment centers in Ohio and a commitment to host 50 solar panel systems on its fulfilment rooftops globally by 2020.
The stock fell to $1,973 by July 25, failing to stay at its high of $2,000 that it reached amid Prime Day.
Unsplash / Pickawood
AWS rolls out new featuresAmazon Web Services (AWS) unveils new tools to support machine learning, security software and control of multiple accounts.
It had previously allowed users to preview tools such as Amazon Personalize, which let developers make use of the online retailer’s machine learning technology. But it was now made more widely available to users as was its Security Hub and Control Tower products, which helped companies such as GoDaddy and Pokemon to run security and compliance checks and manage multiple accounts within AWS.
The stock hit $1,913 by the end of trading on June 24, up 13% since the start of the month.
Amazon Prime launches in UAEAmazon customers in the UAE can now benefit from free delivery by signing up to Prime.
Customers in the region would benefit from the delivery service as well as its TV and movie content and access to games on Twitch.
Amazon also announced an $8 million donation to homelessness charities in its HQ regions. It said $5 million would provide permanent supportive housing for people experiencing homelessness in Seattle and $3 million would go to the Arlington Community Foundation to increase access to affordable housing for low-income families and veterans.
In other department news, NASCAR became the latest big-name company to sign up to Amazon Web Services, naming it as its preferred cloud computing and artificial intelligence provider.
The stock had already been on the rise since the start of June and hit $1,855 by June 12.
Another new EchoAmazon unveils the newest addition to the Echo Show family —Echo Show 5.
The new technology let users control smart home devices such as cameras and lights from the Echo Show screen and to also take high-definition pictures.
It came as Amazon announced a $1 million donation to the Red Cross to help combat blood donation shortages and it also began supporting Chinese language books on Kindle.
This wasn’t enough for the markets though and the stock fell to $1,692 by June 3, down from $1,819 on May 29.
Flickr / Keripo
Amazon unveils a new Fire 7The latest Amazon Fire device is revealed.
The Amazon Fire 7 had a faster processor and two times more storage at 16GB. It also had Alexa built-in. There was also a kids version.
It coincided with the latest charitable initiative from Amazon, which showed its support for the No Kid Hungry campaign to provide more than 9 million breakfasts for over 50,000 students by the end of the year.
Amazon’s stock was already rising from $1,822 on May 13 after it announced support to help employees start their own package delivery businesses. It said it would back startup costs up to $10,000 as well as the equivalent of three months of the former employee’s last gross salary.
The stock hit $1,907 by May 16.
Wikimedia Commons / Mariordo
Amazon enters the UAEAmazon officially enters the United Arab Emirates market by rebranding an e-commerce company that it had acquired back in 2017.
Amazon acquired Dubai-based online retailer Souq in 2017 for $580 million and rebranded it to Amazon.ae. It operated the same way with local deliveries and listings in Arabic for the first time.
Back home in the US, Amazon added another 13 Metros to its Whole Foods Market delivery service, taking the total to 88.
The stock hit $1,962 by May 3, up 16.5% since the start of the year.
Amazon profits hit new recordAmazon posts record profits equivalent to $1billion per month in the first quarter of 2019.
The company started the year with a bang, which included reaching 30 million Fire TV users and the release of a new Kindle with an adjustable front light. Net sales lit up, rising 17% annually to $59.7 billion and net income was a record $3.6 billion in the first quarter or $7.09 per share.
There were signs that sales growth was slowing though. Amazon Web Services was the fastest growing segment, up 41% compared with 49% a year before. North American sales fell from 46% in the first quarter of 2018 to 17% in the first three months of 2019 while international activity declined from 39% to 9%.
The stock still rose 2.5% over the next day to $1,950 as the markets focused on the record profits.
Amazon impresses the markets with innovationsAmazon launches Key for Garage and impresses the markets with Google and Whole Foods partnerships.
Key for Garage was made available on April 23, letting customers order deliveries to be left securely in their garage using an Amazon kit and technology. Investors were also impressed as an official YouTube app was promised for Fire TV while Prime Video would be added to Google’s Chromecast and Android TV.
Amazon also expanded its Whole Foods delivery service to Asheville, Charlottesville, Columbia, Lexington, Little Rock, Manchester, Mobile, Naples and Savannah. This made it available in 75 US metros.
There was also a boost for Amazon’s green credentials as it committed to three new wind farms in Ireland, Sweden and the US that would support its Amazon Web Services infrastructure.
The stock closed at $1,923 on April 23, up 6% since the start of the month.
AWS expands into IndonesiaAmazon Web Services (AWS) announces plans to open an infrastructure region in Indonesia by the end of 2021 or early 2022.
The new AWS Asia Pacific (Jakarta) Region would consist of three “availability zones” at launch, and would be AWS’s ninth region in Asia Pacific, joining Beijing, Mumbai, Ningxia, Seoul, Singapore, Sydney, Tokyo, and an upcoming region in Hong Kong.
The regions provided local technology infrastructure such as cloud storage and data backups.
It followed an expansion of Amazon’s Austin tech hub to create 800 new jobs, while Volkswagen and Standard Bank became the latest AWS users.
The stock got a boost from these developments, rising 2.2% since the end of March to close at $1,820 on April 3.
A new Kindle and skincare range is launchedAmazon unveils a new Kindle for just $89.99 and unveils its first dedicated skincare line.
The latest Kindle device was the first priced at under $100 that had an adjustable front light.
It coincided with Amazon’[s entry into skincare with the launch of Belei. The collection had12 different items, including everything from retinol moisturizer to vitamin C serums, to help customers address common skincare concerns like acne, the appearance of fine lines and wrinkles, dark spots, dehydration, dullness and more.
The stock was already rising in the run up to these updates and increased 1.2% over the next day to $1.819.
Prime members get delivery day choiceNobody likes waiting around for a delivery that will come when a courier fancies making the journey. Amazon Day was introduced for Prime members in the US, letting them choose a day of the week for their delivery.
Once Prime members selected a day of the week that worked best for them, all items ordered that week would arrive together on the designated day rather than opening the door several times a day each day.
It came as taxi app Lyft became the latest high profile company to start using Amazon Web Services.
The stock got a 1.9% boost over the next day to close at $1,671.
Amazon acquires eeroAmazon enters a merger agreement with wi-fi hardware provider eero.
Everyone hates wi-fi blackspots at home and eero’s products aimed to eliminate these with multiple access points that acted as a wi-fi blanket around the house. No more slow connections.
Amazon fancied a slice of that internet pie and revealed it had signed an agreement to acquire the company for an undisclosed sum.
It was a positive signal with investors and the stock jumped 2.9% over the next day to $1,638.
Ask Alexa about Amazon’s profitsAmazon beats its own and analyst expectations for the holiday season as Alexa brings plenty of festive cheer but there are fears about new rounds of spending.
The company had predicted a more subdued fourth quarter, with guidance of sales between $66.5 billion and $72.5 billion and operating income between $2.1 billion and $3.6 billion.
Its net sales hit the higher end, rising 20% annually to $72.4 billion in the fourth quarter. Operating income surpassed expectations and was $3.8 billion, while net income increased to $3 billion or $6.04 per share. This beat the analyst consensus of $5.67.
Chief executive Jeff Bezos credited Amazon’s Echo smart speakers for the success.
Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year.
The holiday season helped take net sales for the full year up 31% to $232.9 billion while net income was $10.1 billion, or $20.14 per share, compared with $3 billion and $6.15 per share in 2017.
However, Amazon chief financial officer Brian Olsavsk spoiled the party when he told analysts that there would be more spending this year.
The markets panicked that this could hit profits and the stock fell 5.3% by the close of the next day to $1,626.
Sales boost for Amazon storesSmall and medium-sized businesses (SMBs) selling through Amazon exceed $50,000 in sales during 2018, the company announced as it also boosted its Amazon Web Services (AWS) offerings.
Amazon announced that more than 50,000 small and medium-sized businesses exceeded $500,000 in sales in Amazon’s stores worldwide, and nearly 200,000 surpassed $100,000 in sales during 2018. The number of small and medium-sized businesses eclipsing $1 million in sales in Amazon’s stores worldwide grew by 20% in 2018.
The milestone followed the launch of a new AWS Backup service and document database.
These developments helped the stock reach $1,696 by January 18, up 10.2% since the start of the year.
Record breaking holiday seasonAmazon marks another record holiday season as it ends the year with plans for its first ever fulfilment center in Mississippi and to invest in more aircraft to speed up deliveries.
The company said a new 554 sq ft fulfilment center in Mississippi would create 850 jobs. There was plenty more news though. Shoppers could soon get their deliveries even faster after the company announced an expansion of its partnership with Air Transport Group Services. This let it lease more cargo planes to keep up with demand for two-day deliveries across the US.
Amazon said it had 40 aircraft flying in and out of gateway operations at more than 20 airports, making two-day shipping possible almost anywhere in the US.
Meanwhile, Amazon ended the holiday season with bestselling items including L.O.L Dolls, Nerf guns and of course plenty of Echo Dots and Fire TV sticks.
Small and medium-sized businesses also had their best holiday season ever, making up more than 50% of items sold through Amazon.
Despite this, the stock dropped initially from $1,460 to $1,461 between December 26 and December 27. It still finished the year at $1,501. This was up 26% annually but below the peak of $2,000 that Amazon had reached in September 2018.
Biggest shopping day in company’s historyAmazon ranked Cyber Monday on November 26 as the biggest shopping day in its history, with more products ordered worldwide than any other day.
Amazon customers worldwide ordered more than 18 million toys and more than 13 million fashion items on Black Friday and Cyber Monday, combined, the company said.
The best-selling products across Amazon.com on Cyber Monday included the all-new Echo Dot, an Ancestry DNA testing kit and Bose noise cancelling headphones.
The stock was already rising in the run up to the holiday sales season and reached $1,677 by November 28.
It kept climbing to $,1772 by December 3 after several high-profile Amazon Web Services partners were announced including National Australia Bank, Guardian Life Insurance and Santander.
Amazon moves to New YorkAmazon unveils plans to open new headquarters in New York and Arlington, Virginia.
The company said it would invest $5 billion and create more than 50,000 jobs across the two new locations, with more than 25,000 employees each in New York City and Arlington. They would join Seattle as the company’s three headquarters in North America.
Plans for a new Amazon Web Services data center in Italy were also announced, which would support local developers especially where they are required to store data in their own country.
European data centers already operated in France, Germany, Ireland and the UK, with a Swedish operation opening in late 2018.
The markets didn’t react well to the billions of dollars of cash being spent and the stock fell 1.9% by the next day to close at $1,599.
Unsplash / Ibrahim Boran
Amazon makes peace with Apple and GoogleAmazon and Apple agree a deal that will see the latest iPhones return to the e-retailer and Google products were soon to follow.
The company had banned sales of Apple smartphones and Apple TV devices as well as Google Chromecast in 2015.
But Amazon announced that it had reached an agreement with Apple to push its latest products direct from authorized resellers just in time for the holiday season.
Interestingly, the deal excluded Apple’s HomePod smart speaker which was a rival to Amazon Echo.
This excited investors and the stock rose 4% over the next trading day to $1.788.
Grocery pickup expands and Amazon launches smart livingAmazon expands its grocery pickup service with Whole Foods to 22 US cities and teams up with door hardware and smart locks provider Schlage to boost its smart home living offering.
The company’s grocery pickup service with Whole Foods continued to grow. Prime members in Birmingham, Colorado Springs, Long Island, Milwaukee, Salt Lake City, San Antonio, Tacoma and Tulsa could order and pickup their organic goods in as little as 30 minutes from their local Whole Foods Market.
It partnered with Schlage to develop smart living tools that would let customers do cool stuff like opening or locking doors with Alexa voice commands.
Amazon’s Echo devices were also made available in Mexico during the first weeks of November and it announced that $100 million had been donated to charities through its AmazonSmile service.
This busy period helped the stock rise to $1,754 by November 8, up 5.3% from the start of the month.
Amazon posts record profitsSales continue to rise in the third quarter but Amazon forecasts a more subdued holiday season, which worries the markets.
Net sales increased 29% annually to $56.6 billion in the third quarter and net income increased to $2.9 billion in the third quarter, or $5.75 per share, compared with $256 million, or $0.52 per share in the third quarter 2017.
It came as Amazon introduced a new family of Echo devices during the quarter such as a new Echo for the car and wall clock.
But analysts and the markets were more concerned about the holiday season, which was usually its busiest period.
Net sales were expected to be between $66.5 billion and $72.5 billion, or to grow between 10% and 20% compared with the fourth quarter 2017.
Operating income was expected to be between $2.1 billion and $3.6 billion, compared with $2.1 billion in the fourth quarter of 2017.
Analysts had expected forecasts of $3.9 billion profit.
Amazon also announced it was increasing its hourly minimum wage to $15 in the US, £10.50 in the London area, and £9.50 in the rest of the UK.
The lower expectations and prospect of higher wages pushed the stock down 13.6% from the day of the results on October 25 to the end of the month.
Amazon shows its charitable sideAmazon donates $2 million to support education funding in Seattle and also backs recycling infrastructure across the US. Finally, somewhere to put all those boxes.
The company announced a $2 million grant to the Alliance for Education to create the Right Now Needs Fund to support students attending Seattle Public Schools. This money could be used to purchase a needed raincoat or school supplies, or to provide food in backpacks to feed students over a long weekend.
It also announced a $10 million investment to support recycling infrastructure in the United States, which would increase the availability of curbside recycling for 3 million homes in communities across the country.
The investments came as Amazon became a retail partner for the Shark Tank TV show and also launched a new Kindle Paperwhite that was thinner, lighter and had two times the storage.
The stock got a small boost from $1,819 to $1,831 between October 16 and October 17 but dropped back to $1,764 by October 19.
Unsplash / NeONBRAND
Amazon raises minimum wageAmazon introduces a minimum wage of $15 for staff to start from November 1.
The company announced the salary boost amid concerns about the treatment of workers and wider debate surrounding the federal minimum wage which was currently $7.25.
Amazon said it would work to get this increased across the country and even received praise from senator Bernie Saunders.
What (Amazon founder) Jeff Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be, and I think it will be, a shot heard around the world.
The stock had already been rising back up to $2,000 since the end of September off the back of the launch of new Echo devices for homes and cars and the number of cities doing Whole Foods deliveries rose from 28 to 48.
But the prospect of more costs from higher wages sent the stock down to $1,719 by October 11.
Amazon stock passes $2,000Grocery delivery expansions, new Amazon Web Services (AWS) users and the launch of Prime Book Box send the stock soaring from the end of August into early September.
Amazon looked to inspire a new generation of readers on August 28 with the launch of a children’s book subscription service called Prime Book Box. It delivered new books for kids every one, two or three months. This was followed the next day by the expansion of its Whole Foods grocery delivery service to Columbus, Dayton, Portland, Greater Washington DC and additional areas of New York City, including Greenwich Village, Chelsea, Union Square and Murray Hill. It was now available in 28 US cities.
On September 4, Amazon revealed that marketing and sales platform HubSpot would use its AWS cloud storage tools.
All these developments pushed the stock beyond the $2,000 barrier by the close of trading on September 4 to $2,039.
It didn’t last long though and the share price fell to $1,939 by September 10 even with the launch of a new Amazon Fire 8 HD.
Amazon launches grocery pickup serviceWhole Food shoppers can now order items through Amazon and pick them up in-store in as little as 30 minutes.
A grocery pickup service was trialled in Sacremento and Virginia Beach, letting Prime members order their groceries to pickup later from the comfort of their car. It was also announced that Samsung had chosen Amazon Web Services as its cloud storage provider, adding another heavyweight company.
The stock hit $1,898 by August 9, up 5.6% from the start of the month.
Amazon posts record profitsAmazon posts a record profit as Prime Day boosts sales despite a website outage during the quarter.
The company’s annual Prime Day of discounts was on July 16 this year and members purchased more than 100 million products, Amazon said. It could have been more if its websites hadn’t crashed during Prime Day.
Net sales increased 39% annually across the second quarter to $52.9 billion and net income increased to a record $2.5 billion in the second quarter or $5.07 per share.
Its cloud computing Amazon Web Services division continued to post the highest growth, up 49% annually, followed by 44% in North America and 27% internationally.
It was the third consecutive quarter of surpassing $1 billion in profit but the revenue figure was just below analyst expectations of $53.41 billion, according to Reuters.
This seemed to send the stock down 1.6% between results day on July 26 and the end of the month to $1,779.
Amazon expands into roboticsAmazon unveils plans to expand in Michigan with a new robotics site that will create more than 1,000 full-time jobs – for humans rather than machines.
The company announced plans to open its fourth Michigan fulfillment center in Gaines Township. The facility would use new robotics technology being tested by Amazon to speed up picking and packing of goods.
It coincided with other new developments during June. Amazon launched a new hub that let delivery drivers leave items in a safe space for people living in apartment blocks. It expanded its Oklahoma and Tulsa fulfillment centers and also extended its Whole Foods grocery delivery to Baltimore, Boston, Philadelphia and Richmond.
This all helped the stock hit $,813 by June 20, up 10% from the start of the month.
Jeff Bezos becomes world’s richest manAmazon founder Jeff Bezos finally overtakes Microsoft’s Bill Gates to become the world’s richest man while the website faces higher taxes.
Bezos was ranked the world’s richest man in the latest Forbes research with net wealth of $141.9 billion.
That’s not bad for someone who started off by selling books from their garage.
His ranking pleased investors and the stock rose 1.5% over the next two days to close at $1,750 on June 20.
However, it fell to $1,663 by June 25 after the US Supreme Court ruled on June 21 that online retailers must collect sales tax. Online retailers were previously exempt as they could argue that they had no physical presence where the sales took place. Amazon had started collecting and paying sales taxes in some states since 2017 but the ruling meant it would have to do the same with third-party sellers on its website. This could also mean higher costs for shoppers to cover the tax.
Flickr / Daniel Oberhaus
Amazon Prime Day provides more than $1billion of salesSmall and medium-sized businesses (SMBs) get a $1billion boost from Amazon’s annual Prime Day sales.
Amazon Prime Day ran from July 16 to July 17 and was technically a day and a half with 30 hours of discounts. The company said Prime members purchased more than 100 million products globally and SMBs selling through the retailer made more than $1 billion in sales.
Top selling items included Ring Video Doorbells, which sold out and back to school goods such as millions of pens and pencils.
The stock hit $1,842 once sales were totted up on July 18 – up 7.5% from the start of the month.
Amazon is boosted by fulfilment center openings and AWS partnershipsTwo fulfilment center openings, a solar rooftop installation and a debt restructuring give Amazon a May boost.
Amazon started the month with an offer to restructure some of its debts by exchanging a collection of unregistered notes with new registered ones. It also opened a collection of model homes, known as Amazon Experience Centers where customers could use Alexa in their everyday lives to practice controlling their lights or requesting and singing badly to their favorite songs.
An announcement that airline Ryaniar would use its Amazon Web Services tools on May 10 failed to give it a lift-off. But it did start to climb after Amazon announced its first fulfillment center in Tuscon, Arizona. This created more than 1,500 jobs. It was followed by a new facility in Oklahoma for the first time, making another 1,500 jobs available. It also announced a new 1.1 megawatt solar rooftop installation on its Las Vegas fulfillment center, bringing it closer to a goal of using 100% renewable energy across the company globally.
Amazon’s stock ended the month up 2.9% since the start to close at $1,629 on May 31.
Amazon sales driven by the cloudAmazon Web Services (AWS) sales make up almost half of first quarter revenues as the company beats its own and analyst expectations.
Amazon went into the first quarter of 2018 expecting sales between $47.75 billion and $50.75 billion and operating income ranging from $300 million to $1.0 billion.
But it outperformed with net sales up 43% annually to $51 billion and operating income of $1.9 billion, up 92%.
AWS sales were up 49% while revenues in the US rose 46% and were up 34% internationally.
Net income was $1.6 billion in the first quarter, or $3.27 per share, which beat analyst expectations of $1.26.
The impressive results pushed the stock up 3.6% to $1,572 by the next day’s close.
Amazon completes Ring acquisitionAmazon launches international shopping on its app and adds reducing crime to its bow as it acquires home security device company Ring.
The two companies would work together to accelerate Ring’s mission to reduce crime in neighborhoods with affordable, effective home security products such as video doorbells.
Shoppers could now purchase items for delivery from the US to their home country through the Amazon app. . The International Shopping experience offered shopping in five languages, including English, Spanish, Simplified Chinese, German, and Brazilian Portuguese, with the ability to shop in 25 currencies.
It marked a busy start to April that saw Shutterfly and Cox Automotive becomes the latest companies to use its Amazon Web Services tools.
The stock rose 1.5% between April 17 and April 18 to $1,527.
GoDaddy signs up to Amazon Web ServicesAmazon secures a high-profile user of its Amazon Web Services (AWS) software development and cloud storage tools.
Domain registrar and e-commerce provider GoDaddy became the latest high-profile company to sign up to AWS. It followed Comcast, which started using the service in January.
The stock got a small 0.69% boost over the next day to $1,447.
Amazon begins Whole Foods deliveryAmazon and Whole Foods Market announce the introduction of free two-hour delivery of natural and organic products from Whole Foods Market through Prime Now, with plans to expand across the US in 2018.
Forget the hassle of travelling all the way to Whole Foods for your shopping, Now Amazon will deliver it. Prime customers in neighborhoods of Austin, Cincinnati, Dallas and Virginia Beach could shop through Prime Now for bestselling items including fresh produce, high quality meat and seafood, everyday staples and other locally sourced items from Whole Foods Market.
This didn’t deliver much for investors though and the stock fell 0.81% over the next day to $1,339.
Amazon’s fourth quarter results are on FireAmazon reports a sales surge over the holiday season but its cloud computing service seems to be driving growth.
The company’s fourth quarter results revealed more than five billion items were shipped with Prime worldwide in 2017. The Fire TV Stick and Echo Dot were the best-selling products cross all of Amazon.
Net sales increased 38% annually during the fourth to $60.5 billion and net income was $1.9 billion or $3.75 per share.
But it’s not just shopping boosting Amazon’s sales. The results showed Amazon Web Services, which provided cloud computing tools for developers, grew sales by 45% during the quarter at $5.1 billion. This was higher than the 42% growth in the US and 29% internationally.
The results took annual sales up 31% to $177.9 billion and net income was $3 billion, or $6.15 per share, in 2017 compared with expectations of $2.4 billion, or $4.9 per share in 2016.
The stock got a 2.1% boost off the back of the results to close at $1,429 the next day.
More than 300,000 small businesses sold through Amazon in 2017More than 300,000 US-based small and medium-sized businesses (SMBs) joined the Amazon Marketplace in 2017, and SMBs on Amazon sold billions of items to customers around the world.
Amazon was no longer just selling its own goods. Now, half of the items sold on Amazon worldwide were from small and medium-sized businesses that offer their products through the Amazon Marketplace.
It came as Amazon opened up its technology so companies such as Epson and HP could develop Dash buttons that let users order top up products such as printer ink directly from Amazon.
The stock got a 1.7% boost to $1,276 by the next day’s close.
4 million people try Prime in a weekMore than four million people start Prime free trials or begin paid memberships in one week alone as Amazon marks another record festive period.
From Thanksgiving through Cyber Monday, nearly 140 million items were ordered from small businesses and entrepreneurs, the company said.
It was the best holiday yet for Amazon’s devices, with tens of millions of Alexa-enabled devices sold worldwide. Amazon.com customers also purchased enough TVs to create nearly 2,500 towers the size of the Space Needle.
The stock got a small 0.5% lift-off, rising 0.5% to $1,182 by the next day’s close.
Pixabay / mmi9
Whole Foods boosts Amazon salesThe acquisition of Whole Foods pushes sales up for the third quarter of 2017.
Amazon had made a high profile $13.7 billion acquisition of Whole Foods during the quarter and it was already reaping the fruits of its purchase.
Net sales increased 34% to $43.7 billion in the third quarter and $1.3 billion of this was from Whole Foods.
Beyond Whole Foods, shoppers also had the choice of three new Echo devices and a 4K Ultra HD Fire TV stick to spend their money on.
Net income was $256 million in the third quarter, or $0.52 per share, which beat analyst expectations of $0.03 by a long way. The achievement was reflected in the markets and the stock soared 13.1% to $1,100 by the next day.
Amazon goes greenAmazon announces that its largest wind farm yet—Amazon Wind Farm Texas—is now up and running, adding more than 1,000,000 MWh of clean energy to the grid each year.
The company had launched 18 wind and solar projects across the US, with 35 more to come.
Together, these projects generated enough clean energy to power more than 330,000 homes annually. It also supported hundreds of jobs and provided tens of millions of dollars of investment in local communities across the country. Investors weren’t so green-fingered though and the stock dropped 0.45% over the next day to $982.1, hitting $972 by October 26.
Unsplash / meriç tuna
Amazon prices notes offeringAmazon prices a private offering of $16 billion senior unsecured notes.
It said the net proceeds from the offering would help fund its acquisition of Whole Foods Market, repay its 1.200% notes due 2017, and for general corporate purposes.
The stock took a bit of a dip from $982.7 to $978.1 over the next day.
Second quarter results push Amazon stock off its record highPrime Day boosts sales but a busy second quarter of spending pushes profits down.
Amazon said it had record sales for Echo, Fire tables and Kindle devices during Prime Day on July 11, which helped net sales across the second quarter rise 25% annually to $38 billion.
But it was also a busy quarter of spending. Operating expenses were $37.3 billion, including $5.5 billion on technology and content as it launched four new Fire tablets and $5.1 billion on fulfilment as all those Prime orders need shipping. Amazon Fresh also expanded into Germany and Prime Now launched in Singapore during the quarter.
This left net income at $197 million in the second quarter, or $0.40 per share, compared with $857 million, or $1.78 per share a year before. The stock had hit a record high of $1,052 in the run up to the results, making chief executive Jeff Bezos temporarily the world’s richest person, ahead of Microsoft founder Bill Gates. But analysts had expected profits of $1.42 per share in the second quarter and the disappointment pushed the stock down 5.6% by the end of the month to $987.7.
Amazon goes shopping for Whole FoodsAmazon acquires organic foods supermarket Whole Foods.
The company announced it would acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion. That’s a lot of healthy food. It also included Whole Foods Market’s net debt.
It came after Amazon separately announced that more than 20,000 small businesses had borrowed over $3 billion from its lending division. Amazon Lending provided short-term business loans for up to 12 months to invited micro, small and medium businesses selling through the retailer to help them grow their business.
The stock had already passed the $1,000 mark and the Whole Foods purchase helped it stay at that level.
Wikimedia Commons / ChadPerez49
Amazon ranked among top companiesSocial network LinkedIn ranks Amazon among the top US companies.
It comes as the online retailer introduced an all-new Fire 7 and Fire HD 8 with Alexa already installed plus an edition aimed at kids.
LinkedIn’s second annual Top Companies list ranked companies based on data from LinkedIn’s 500+ million members, including current and prospective Amazon employees.
The stock remained at around $958 initially but rose to $995 by the end of May, within touching distance of the $1,000 milestone.
Amazon’s first quarter results are a good lookAmazon posts a profit for the eighth consecutive quarter as it beats its own expectations for the billion.
The company got stylish in the first quarter with the launch of Echo Look. The smart speaker and style assistant let users take photos of outfits from all angles to get advice on how they look from friends and fashion specialists.
It also launched a new Fire TV Stick in India with Hindi voice search.
All this helped push net sales up 23% annually to $53.7 billion and net income was $724 million in the first quarter or $1.48 per share.
Sales were higher than Amazon expected and above estimates of $35.3 billion from analysts. Its profits also beat analyst predictions of $1.12 per share, which helped push the stock up to 4.7% by the end of the month.
Amazon Payments hits 33 million customersMore than 33 million customers have now used Amazon Payments to make a purchase.
Amazon Payments let shoppers around the world pay on thousands of merchant websites using the information already stored in their Amazon account. In 2016, Pay with Amazon payment volume nearly doubled, with expansions into France, Italy and Spain.
More than 50% of Pay with Amazon customers are Prime Members, the company said.
This gave the stock a small 0.88% boost to $819.7.
Amazon’s holiday season disappoints the marketsRising sales and profits over the holiday season aren’t enough to impress analysts and the markets.
It was a busy year for Amazon. Its full year results showed it delivered more than 2 billion units on behalf of sellers and the number of active users of its fulfilment centers rose 70% in 2016.
Amazon also said the number of video, music, and reading activities on Prime more than doubled plus it opened its first checkout-free physical store called Amazon Go in Seattle.
Sales rose 27% annually to $136 billion and net income was $2.4 billion or $1.25 per share for the year.
But analysts were more focused on quarterly performance. Net sales increased 22% annually to $43.7 billion in the fourth quarter and net income was $749 million or $1.54 per share. That beat Amazon’s own holiday season expectations but analysts had forecast better revenue of $44.68 billion.
The markets were also feeling fussy over Amazon’s financial guidance. It expected net sales between $33.25 billion and $35.75 billion. This was below forecasts of $35.95 billion. The market disappointment pushed the stock down 3.5% by the next day to $810.
Amazon opens first fulfillment center in ColoradoAmazon announces plans to create 1,000 new jobs with the opening of a fulfillment center in Colorado.
The one-million square foot facility in Aurora, its first in Colorado, added to the hundreds of associates currently employed at the Amazon sortation center located in the same city.
The opening gave the stock a 0.5% boost to $822.4 by the next day.
Amazon Unlimited starts streamingAmazon Unlimited is launched, with tens of millions of songs and thousands of playlists and personalized stations. Take that iTunes and Spotify.
The new music streaming service offered a wider catalog than Prime Music.
It also let users request songs through Amazon’s smart speakers, which freed your hands to clap and dance along to your favorite tunes.
The stock got a bit of a boost, climbing from $831 on October 12 to $384 over the next day.
Unsplash / bruce mars
Analysts not wedded to Amazon’s prospectsSmart speaker marriage proposals fail to impress analysts and investors as Amazon falls short of expectations in its third quarter results.
A new Amazon Music Unlimited service and the launch of Alexa, Echo and Echo Dot devices in the UK and Germany helped push net sales up 29% annually, with profits at $252 million or $0.52 per share.
Chief executive Jeff Bezos even revealed that 250,000 marriage proposals had been made through Alexa during the quarter. But analysts and the markets weren’t feeling so romantic. The stock was forecast to return $0.78 so missed expectations.
Financial guidance that put operating income at between $0 and $1.25 billion for the fourth quarter also failed to impress and the stock fell 5.1% to $776.3 by the next day’s close.
Amazon unveils more device developmentAmazon unveils a new Fire TV Stick with an Alexa voice remote and its smart speakers launch in the UK and Germany.
Pressing buttons on a remote can be exhausting so Amazon developed a remote that could be voice-controlled by viewers using its Fire TV Stick.
Shoppers in the UK and Germany were also given access to the Amazon Echo and Dot devices.
The stock remained level at around $829.
Wikimedia Commons / Hedwig Storch
A high-five for Amazon’s profitsAmazon hits five consecutive quarters of profits.
A record Prime Day during thesecond quarter helped Amazon post net sales of $30.4 billion, up 31% annually.
The company seemed in more control of its delivery and content costs and net income was $857 million in the second quarter, up from $92 million a year before, or 1.78 per diluted share. This beat analyst estimates of $1.11.
This gave the share a 0.8% boost a day after the results to close at $758.8.
Edward Yruma, an analyst at KeyBanc Capital Markets, said:
Obviously this has been an incredibly strong stock since February or March so the bar is very high here.
Amazon launches drones partnership with UK governmentAmazon announces it is working with the UK government on ways to make deliveries by drones.
Forget delivery drivers knocking at your door. The future of deliveries was flying drones, apparently. Amazon said it was working with the UK government to test how to make deliveries safely using drones.
Paul Misener, Amazon’s vice president of global innovation policy and communications, said:
Using small drones for the delivery of parcels will improve customer experience, create new jobs in a rapidly growing industry and pioneer new sustainable delivery methods to meet future demand.
This failed to lift the stock and it fell 0.55% over the next day to $735.5.
Unsplash / Yitzhak Rodriguez
Biggest Prime Day everAmazon’s equivalent of Black Friday is yet another success.
The second annual Prime Day was the biggest day ever for Amazon. Customer orders surpassed Prime Day 2015 by more than 60% worldwide and more than 50% in the US. It was also the biggest day ever for Amazon devices globally and a record Prime Day for each Amazon device category including Fire TV, Fire tablets, Kindle e-readers and Alexa-enabled devices.
The stock fell slightly though from $742.6 to $741.2.
Amazon unveils The Grand TourAmazon snaps up high-profile TV presenters Jeremy Clarkson, Richard Hammond and James May to run a new motor show exclusively on Amazon Prime called The Grand Tour.
The former Top Gear presenters reunited to make a car show exclusively for Prime members. It came after Clarkson was suspended from the BBC’s Top Gear show amid a bullying row and eventually left. He was followed by Hammond and May and Amazon Prime became their new home.
The stock got a small 0.65% boost to close the next day at $717.9.
Amazon’s own products push profits upAmazon beats analyst expectations in the first quarter of 2016 as its own devices become its best-selling products.
The company had come a long way from selling other people’s books and its first quarter results showed the Kindle and smart speakers had built a loyal following. Chief executive Jeff Bezos said customers purchased more than twice as many Fire tablets than the first quarter last year and it was struggling to keep up with demand for Echo devices.
This helped net sales rise 28% annually to $29.1 billion during the quarter and net income was $513 million or $1.07 per share. That beat analyst expectations of $0.58 per share and the stock rose 9.5% to $659.9 by the next day’s close.
Amazon expands smart speaker rangeAmazon unveils two new smart speakers, the Echo Dot and Amazon Tap.
The Dot was a smaller version of the Echo that could be plugged into speakers and cost $89.99.
The Amazon Tap was also a portable bluetooth and wi-fi speaker that could be controlled by making commands after touching the microphone button. It was priced at $129.99.
This wasn’t enough to get the markets talking though and the stock dropped slightly from $577.4 to $575.1 over the next day.
Flickr / Pierre Lecourt
Amazon passes $100 billion annual sales landmarkAmazon founder Jeff Bezos reminisces about driving packages to the post office himself in the early days of Amazon as it hits $107 billion of sales for 2015 in its full-year results.
The milestone came as Prime memberships increased 51% in the year across the world and 47% in the US.
Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100 billion in annual sales and serve 300 million customers.
Net income for the year was $596 million, or $0.52 per share.
That was helped by a busy holiday season that saw net sales increase 22% annually to $35.7 billion. Operating income increased 88% to $1.1 billion and net income was $482 million or $1.00 per share.
Analysts and the markets weren’t as excited as Bezos though and had expected more from the quarter. Analysts had forecast quarterly earnings of $1.56 per share and the stock dropped 7.6% to $587 over the next day.
Record season pushes stock to new highsAnother record holiday season helps push Amazon’s share price to a new high.
The company reported that more than three million new members joined Prime during the third week of December alone and it sold two times more Amazon devices than last year. Over 200 million more items were shipped for free using Prime during the holiday period.
This helped the stock end the year at $675.8, up an impressive 119%.
Amazon Echo hits retail storesAmazon Echo arrives in retail stores in time for the holiday season.
Amazon’s flagship smart speaker had previously been sold solely on its website since launch in 2014. But now the device, which let users “Ask Alexa” to answer questions or play music, could be purchased on the high street.
It would be stocked in well-known stores such as The Home Depot, Staples, Sears, Brookstone, RadioShack, Fred Meyer, P.C. Richard & Son and more.
The stock rose 2% over the next day off the back of the news to $673.2.
Wikimedia Commons / Frmorrison
Two quarters of profit in a rowAmazon posts its second consecutive quarter of profits, brushing off its reputation for losses.
The markets often expected Amazon to make a loss each quarter as it continued investment in fulfilment centers and products such as the Kindle, Fire TV and now Alexa-powered smart speakers.
But its third quarter results kept investors and analysts feeling cheery as they headed into the holiday season. Net sales increased 23% annually to $25.4 billion and net income was $79 million or $0.17 per share. That surprised analysts who had expected a loss of $0.13 per share.
Prime Music made its debut in the UK during the quarter and Amazon said it would create more than 100,000 seasonal jobs in North America and 40,000 across Europe in its fulfilment centers to meet expected record demand during the festive period.
Amazon predicted net sales between $33.5 billion and $36.75 billion in the fourth quarter and operating income ranging from $80 million to $1.28 billion. Could it make it three quarters of profit in a row?
Investors seemed confident and the stock rose 6.4% to $599 by the next day’s close.
Amazon bans sales of competitor productsAmazon bans sales of Apple TV and Google Chromecast products.
The company claimed these services don’t run easily on its own Fire TV device. It of course had nothing to do with Apple and Google offering rival streaming services.
Amazon said it would halt new listings of the devices and all existing stock would be removed by October 29.
Barbara Kraus, an analyst at Parks Associates, told Bloomberg:
This has the potential to hurt Amazon as much as it does Apple and Google. As a retailer, I want to give people a reason to come to me. When I take out best-selling brands, I take away those reasons.
Investors weren’t too concerned though and the stock rose 2.3% over the next day to close at $532.
Amazon scraps smartphone salesAmazon finally stops selling its Fire Phone after it is dogged by poor sales.
The online retailer may have been the master of selling books, DVDs and Kindle e-readers but it couldn’t crack the smartphone market.
The Fire Phone was Amazon’s answer to the iPhone. Offering Amazon technology and functionality. But shoppers weren’t buying it, literally.
It cost $199 at launch in 2014 and a year later was reduced to $60, showing just how much it was struggling to compete.
Technology website Geekwire noticed that the product was no longer available on the Amazon website and there were reports of its phone engineers being sacked.
Strangely there was no press release but the Fire Phone sales were quietly switched off forever.
Investors didn’t seem too surprised by the news and the stock remained stable at around $517.
Wikimedia Commons / Frmorrison
Prime profitsAmazon beats analyst expectations in the second quarter as its first ever Prime Day shopping event and the rollout of the Amazon Echo smart speaker boosted sales and profits.
The company launched Prime Day on July 15, its own answer to Black Friday and said it attracted record numbers of new sign-ups. Turns out shoppers love reduced stuff. The company also made its Amazon Echo smart speaker available across the US and opened its Alexa voice service to developers.
Net sales increased 20% annually to $23.18 billion and net income was $92 million or $0.19 per share, which beat analyst expectations of $0.14.
This helped push the share price up 9.7% over the next day to $482.
Wikimedia Commons / Frmorrison
Step aside Black Friday, make way for Prime DayAmazon holds its own equivalent of Black Friday sales, dubbed Prime Day.
Black Friday was historically one of Amazon’s busiest days of the year and the company found a way to cash in on every shopper’s love of a discount.
On July 15, Prime members in the US, UK, Spain, Japan, Italy, Germany, France, Canada and Austria were given a day dedicated to deals purely on the Amazon website.
Amazon reported that customers were buying items at record rates, with tens of thousands of Fire TV Sticks, 35,000 Lord of the Rings Blu-Ray sets, 28,000 Rubbermaid sets, and 4,000
Echo devices sold in just 15 minutes.
The markets liked the sales boost and the stock rose 3.1% to $475.4 by the next day’s close.
Amazon agrees to pay corporation taxAmazon drops controversial structures that had helped it avoid paying corporation tax in the UK.
The company previously faced criticism for routing its Amazon.co.uk sales through Luxembourg, which meant it avoided having to pay tax to HMRC.
But following public backlash and threats of a new diverted profits tax from UK chancellor George Osborne, Amazon accepted that if it was making profit in the UK, it should also pay corporation tax in the same country. It would start registering its sales through the UK from the start of May.
A spokesman said Amazon was “now recording retail sales made to customers in the UK through the UK branch. Previously, these sales were recorded in Luxembourg”.
The stock fell slightly over the next trading day to $425.4, down 0.5% on a daily basis.
Amazon heads into the cloudThe markets got to see under the bonnet of Amazon’s cloud computing service for the first time in Amazon’s first quarter results for 2015.
Amazon chief executive Jeff Bezos proudly declared that Amazon Web Services (AWS), which provided storage and developer tools for companies, individuals and governments, was a $5 billion business. The results showed sales in the AWS division rose 49% annually to $1.5 billion in the first quarter.
It was a landmark quarter for Amazon as it celebrated 10 years of its Prime service. Its two-hour delivery Prime Now service was expanded to Miami, Baltimore, Dallas, Atlanta, and Austin and customers could also get a Dash button that reorders household items once they run out.
Net sales for the quarter increased 15% annually to $22.72 billion but $22 billion of spending, including $2.7 billion on fulfilment centers and the same on technology and content, pushed it into a net loss of $57 million or $0.12 per share. That was slightly better than the $0.13 expected by analysts and the stock rose 14.3% by the next day to $445.
Amazon Prime celebrates 10 yearsAmazon’s delivery subscription service, Prime, marks its first decade.
The company revealed it had tens of millions of Prime members around the world who benefited from its two-day shipping service and access to unlimited streaming of tens of thousands of movies and TV shows.
Amazon revealed that 20 million items were available for Prime shipping and 221 different types of toothbrush were delivered on the same day in 2014. We assume to different people.
Investors celebrated by giving the stock a minor 0.3% boost to $364.7 over the next trading day.
Amazon reaches an automated highAmazon beats its own and analyst profit expectations during the holiday season and its all thanks to robots.
The company posted net sales of $29.3 billion in the fourth quarter, up 15% annually. Much of the holiday season activity was helped by robots. Amazon said it had more than 15,000 robots working in its 10 fulfilment centers across the US.
Net income was $214 million, or $0.45 per share, as Amazon remained in profit despite $28.7 billion of spending during the quarter.
Analysts had expected earnings of $0.17 per share and Amazon’s own predictions ranged from an operating loss of $570 million and profit of $430 million. So everyone was pleasantly surprised.
A total of $88.8 billion of investment in the business during 2014 pushed Amazon into a net loss of $241 million over the year despite $88.9 billion of sales.
The markets seemed to focus more on the quarterly rather than the annual data and the stock rose 14% to $354 by the next day.
Amazon marks 20th holiday seasonAmazon’s 20th holiday season brings record growth to Amazon Prime with more than 10 million new members worldwide trying the delivery and streaming service for the first time.
Highlights included enough sales of Elsa dolls to reach the top of Cinderella's castle 855 times. Plus, customers purchased enough Sophie the Giraffe teethers to equal the height of 788 real giraffes.
Investors liked the analogies and strong sales, which helped the stock close the year at $310.3, up 0.4% since the Boxing Day announcement but down from a high of $400 at the start of 2014.
Amazon unveils the Fire TV StickAmazon introduces the Fire TV Stick as another smaller way for users to access its streaming service.
Its Fire TV box was already the best-selling streaming media box on the retailer’s website. Now its service could be accessed through a small stick that slots into the HDMI port. Prime members could get their hands on the stick for a limited period for just $19.
The markets were watching closely and the stock rose 1.9% to $295.5 by the next day’s close.
Wikimedia Commons / HDMI-experte
Markets unimpressedNew Kindles fail to impress analysts and the markets as Amazon posts a loss for the third quarterp ahead of the holiday season.
Another quarter, another new feature. This time it was the Kindle Voyage, Amazon’s thinnest book reader ever. Amazon also introduced a new Kindle Fire HD, including a kids version of the device.
Orders kept coming. Amazon posted net sales of $20.5 billion for the quarter, up 20% annually.
But spending was still at $21.1 billion, which pushed Amazon into an operating loss of $544 million and net loss of $437 million or $0.95 per share. Analysts were expecting a net loss of $0.74 per share.
It wasn’t looking much better for the holiday season. Amazon’s guidance forecast results ranging from an operating loss of $570 million and profit of $430 million.
Investors weren’t feeling too festive and the stock fell 8.3% to a low for the year at $287.
Amazon CFO to retireAmazon announces that its chief financial officer Thomas Szkutak will retire in June 2015.
Szkutak joined Amazon in 2002 and oversaw the controller, treasury, investor relations, tax, internal audit and facilities functions as well as financial management of the company’s business units.
Amazon said he would be succeeded by vice president of finance for the company’s global consumer business Brian Olsavsky.
Usually, a high-profile departure may dent the share price but the smooth transfer of power seemed to allay investor fears and the stock rose over the next day to $345.9 - up 2%.
Amazon acquires TwitchAmazon announces that it has purchased video game streaming platform Twitch.
The acquisition cost $970 million, which may seem like a lot for video games but it showed that Amazon was down with kids as it was what all the cool ones were playing.
It also gave Amazon one-up against Netflix and YouTube in the streaming market.
The acquisition gave the stock a 3% boost to $343.1 by the next day’s close.
Amazon falls back into the redAmazon taps into the smartphone market but a busy quarter of spending pushes it back into a loss.
Amazon introduced the Fire phone during the second quarter of 2014, its own answer to the iPhone. This kept its operating costs high, at $19.3 billion in total for the three months. That included the launch of Prime Music, which provided ad-free access to more than a million songs at no additional cost to Prime members.
The company said Fire TV sales had “significantly exceeded” its forecast.
Net sales increased 23% annually to $19.34 billion in the second quarter, compared with $15.7 billion in second quarter 2013. But all the spending and investment in the company pushed Amazon into an operating loss of $15 million and net loss of $126 million.
Analysts were beginning to get impatient and questioned the strategy of free delivery through its Prime service. Amazon’s own results regularly showed that cost of sales was its highest expense and it was $13.3 billion during the second quarter of 2014.
Forrester analyst Sucharita Mulpuru said:
Google, Apple and Facebook invest all the time in innovation, and don't have losses like this. The big difference is Amazon is spending all this money on shipping those orders.
Investors were also getting fidgety about the constant losses, especially as Amazon warned of more in the third quarter, and the stock fell 9.4% off the back of the results to $324.
Prime Music is switched onYou can already get faster deliveries and TV with Prime, now users can get music as well.
Prime Music was launched, giving members access to more than a million songs at no additional cost to their subscription.
Members could choose exactly which songs and albums to listen to, or they could sit back and listen to hundreds of expert-programmed Prime playlists.
This was followed up by a launch into the smartphone market as Amazon unveiled the Fire phone, combining features such as music, TV and books. Plus, you could make phone calls as well.
Investors weren’t impressed though and the stock fell 2% between June 18 and June 19 to close at $327.
Unsplash / Laura Chouette
Amazon hots up with Fire TV launchAmazon gets back into analyst good books as net profits rise again during the first quarter but the outlook isn’t so positive.
The company marked its entry into the streaming market during the first quarter with the launch of Fire TV, a tiny box that plugs into your HDTV to access video services such as Netflix and Prime Instant Video. The company said video streams on Prime Instant Video nearly tripled year-on-year during the quarter.
Net sales increased 23% annually to $19.74 billion in the first quarter, but operating income decreased 19% to $146 million amid $19.5 billion of costs. That included almost £2 billion on technology and content as all those streams don’t come for free.
It still managed to post net income of to $108 million in the first quarter, or $0.23 per share, compared with $82 million, or $0.18 per share, a year before. This matched analyst expectations but concerns around Amazon increasing its Prime membership fee from $79 to $99 and warnings of an operating loss between $455 million and $55 million in the next quarter pushed the stock down 9.8% to $303.8 by the next day’s close.
Amazon builds streaming market shareAmazon Instant Video announces that streams on Prime Instant Video nearly tripled year over year. According to a report from Qwilt, which tracks growth in online video usage, Amazon has passed both Apple and Hulu in streaming video usage.
It came as Amazon launched Fire TV, which provided access to streaming services such as Netflix, and Prime Instant Video all through a little box that plugs into your HDTV.
Some of its unique features included predictions of which movies and TV episodes you would like and a voice search to save the annoyance of using that on-screen alphabet grid.
The stock got a 1.4% boost to rise to $331.8 by the close of the next day on April 9.
Pixabay / FrankundFrei
Post-holiday bluesThe holiday season pushes Amazon back into profit for the fourth quarter of 2012 but its not enough for analysts and the markets.
Amazon announced a record-setting holiday season for Amazon Prime, which it revealed had “tens of millions” of members worldwide.
This helped net sales rise 20% to $25.5 billion during the quarter. Operating income was also up 26% on a yearly basis to $510 million and net income rose to $239 million or $0.51 per share compared with $97 million, or $0.21 per share, in the fourth quarter 2012. But analysts were expecting more from the holiday season and had forecast earnings of $0.66 per share.
Amazon even turned around from its annual loss in 2012 to post net profits of $274 million for 2013.
But the markets weren’t impressed and the stock fell 11% by the next day’s close to $358.6.
Benchmark analyst Daniel Kurnos said:
In addition to increased internal investment to build out the digital library, distribution center capacity and enhance offerings, Amazon may be facing further margin pressure due to the success of its Amazon Prime offering.
A record year for marketplace sellersAmazon announces that its Marketplace sellers had a record-breaking year in 2013, selling more than a billion units worldwide worth tens of billions of dollars.
The company revealed that Amazon Marketplace, which consists of more than two million Marketplace sellers of all sizes worldwide, experienced record growth during the busy holiday selling season. On Cyber Monday, more than 13 million units were ordered worldwide, growing the total units ordered by more than 50% annually.
That wasn’t enough to impress investors though and the stock dropped by 1% over the next day to $397.
A Prime holiday seasonMore than one million customers became new Prime members in third week of December. Amazon revealed as it marked another record holiday season.
The entire 2013 holiday season was the best ever for Amazon, with more than 36.8 million items ordered worldwide on Cyber Monday, a record-breaking 426 items per second, the retailer said.
Amazon said millions of customers unwrapped Kindle e-readers and Fire tablets during the holiday season.
However, this wasn’t enough to keep Amazon’s stock above its new high of $400 and it closed the year at $398.
Amazon gets charitableAmazonSmile is launched, letting customers automatically choose a charity to donate to whenever they make a purchase.
It came at the end of a busy month that introduced a new feature letting customers login and pay automatically for an item, plus Amazon acquired education website TenMarks.
Who said Amazon was all about the profits? The company announced it would donate a percentage of the purchase price of an item to a shopper’s favorite charitable organization. There was no cap on the total donation amount and customers could choose from almost one million organizations.
Investors weren’t feeling too charitable. The stock got a minor 0.83% boost over the next day to close at $364 on October 31.
Investment over profitsAmazon posts its second quarterly net loss in a row during the third quarter of 2013 but still manages to beat analyst expectations.
The company remained committed to its investment over profits mantra during the third quarter.
It revealed $17 billion of operating expenses during the quarter which included a third generation Kindle Fire with a mayday button for live tech support. Beyond ebooks, Amazon unveiled a login and pay function so customers could buy goods faster and launched an art category.
Operating costs wiped out $17 billion in net sales and left Amazon with a loss of $41 million or $0.09 per share. This did still beat analyst expectations of a $0.10 loss per share.
Amazon said it had scored a win after airlines ruled that Kindles could be used on airplanes during takeoff and landing plus the company said it would create more than 70,0000 seasonal jobs across its US fulfilment centers.
Investors remained happy with the growth, and possibly the prospect of not having to put their Kindles down while on a flight, and the stock rose 9.3% by the next day’s close to $363.9. This was despite Amazon forecasting a fourth quarter performance ranging from a $500 million loss to $500 million operating profit.
Amazon unveils new KindlesShoppers can now purchase a new and improved Kindle Fire HD with one million pixels and a Kindle Paperwhite, just in case anyone doesn’t have an e-reader or tablet device yet.
Amazon added a faster processor and higher contrast to its Paperwhite, because no-one likes reading slowly in the dark. It also unveiled a new slimmer and lighter Kindle Fire HD with dual stereo speakers and 66% more pixels than the previous generation device.
The markets seemed excited and the stock rose 1.7% on a daily basis to close at £318.1 on September 26.
Flickr / appsmanila
Bezos buys Washington PostAmazon founder Jeff Bezos buys the Washington Post.
No not just a copy of the newspaper. The actual company.
Bezos purchased the newspaper in a personal capacity for $250 million from the Graham family which had owned it for 80 years.
Bezos told the Post that as its new owner he would be entering "uncharted terrain" that would "require experimentation". He tried to allay fears that his reign might bring editorial interference by saying:
There would be change with our without new ownership. But the key thing I hope people will take away from this is that the values of the Post do not need changing. The duty of the paper is to the readers, not the owners.
The sale came as a complete surprise to almost all of the Post staff, and stunned the US media world. Some may even ask how good the Post’s own reporters were if they didn’t spot a takeover.
Jeff Jarvis, associate professor of journalism at City University of New York's Graduate School of Journalism, said:
This whole thing happened with admirable and amazing secrecy.
He did have some reservations though.
Bezos doesn't believe in openness. And that somewhat worries me. Both with how a newspaper operates, how a Washington institution operates and also with the need for business model experimentation to occur in the open for the good of the entire industry.
But Jarvis said that on balance the sale was a good thing as Bezos was incredibly smart.
He's terribly successful, he has the resources to do this, I think all in all, at first rush it seems like a good idea.
Amazon investors weren’t so sure though and the stock fell 1.3% over the next day to $296.
Going digitalAmazon’s digital shift continues as it expands in the Chinese and Indian markets during the second quarter.
Chief executive Jeff Bezos revealed that Amazon’s top 10 selling items worldwide during the second quarter were all digital products – Kindles, Kindle Fire HDs, accessories and digital content. Does anyone buy physical goods anymore?
Net sales increased 22% annually to $15.7 billion in the second quarter, helped by the launch of the Kindle Fire HD in China and Canada. Amazon also launched its marketplace in India, selling its own products and those from retailers of all sizes.
Operating expenses of $15.6 billion during the quarter, including $1.5 billion of technology and content costs, pushed its income down 26% and Amazon posted a net loss of $7 million or $0.01 per share.
Analysts had expected a profit of $5 to $6 per share but investors didn’t seem to mind and the stock rose 2.8% by the next day’s close to $312.
Unsplash / John Schnobrich
Amazon launches its own currencyAmazon Coins are made available
The idea was that developers could earn Amazon Coins for in-game app purchase and actual apps sold within the Amazon Appstore plus shoppers could also get discounts for purchases made with the virtual currency. This also meant Amazon could keep customers making purchases within its own sites as the coins could hardly be used to buy a takeaway or to pay for petrol.
Investors seemed to buy into this as well and the stock rose 1.5% to $264.5 by the next day’s close.
Flickr / Marco Verch
From paperbacks to productionProfits take another hit in the first quarter as Amazon adds film and TV producer to its ever-growing range of skills.
The launch of the large-screen Kindle Fire HD 8.9” in Europe and Japan as well as a price cut in the US to $269, helped push net sales up 22% annually to $16.07 billion in the first quarter.
The company launched Amazon Studios during the quarter to provide originals films and series for its Prime Instant Video customers. This pushed Amazon into Netflix’s streaming patch.
But $15.8 billion of spending, including $1.4 billion on technology and content, pushed operating income down 6% annually to $181 million and net income fell 37% to $82 million.
Amazon’s outlook didn’t make for inspiring watching though. It predicted that its results for the second quarter of 2013 would range from an operating loss of $340 million to a profit of $10 million.
This seemed to push the stock down as did rumours of an online sales tax in the US and a hack of 50,000 usernames and passwords on its deals website LivingSocial.
Amazon’s stock fell 7.2% by the close of the next day on April 26 to $254.8.
Amazon to acquire GoodreadsAmazon reaches an agreement to acquire book recommendations website Goodreads.
The website had more than 16 million members and more than 30,0000 book clubs so that’s a lot of Amazon paperbacks or e-books that could be sold.
The terms of the acquisition weren’t disclosed.
Not everyone was pleased with the deal. The American writers' organization the Authors' Guild called the acquisition a "truly devastating act of vertical integration" which meant that "Amazon's control of online bookselling approaches the insurmountable.”
There wasn’t much market reaction and the stock fell 1.8% by the next trading day on April 1 to $261.6.
The end of real books?Physical book sales suffer their lowest December growth rate for 17 years as e-books continue to dominate for Amazon in its fourth quarter results.
Amazon may have started as a physical bookseller but it was fast moving into the digital age thanks to its Kindle push. Chief executive Jeff Bezos said ebooks had become a “multi-billion dollar category – up approximately 70% annually.” In contrast, physical book sales experienced the lowest December growth rate in 17 years, up just 5%.
Net sales increased 22% annually during the holiday season to $21.27 billion but another quarter of spending and development pushed net profits down 45% to $97 million.
Amazon was already competing with Apple in the e-reader market with the Kindle versus the iPad but the company moved into more of its rival’s patch during the fourth quarter by launching AutoRip. The service gave customers free MP3 versions of CDs they had purchased from Amazon. Who needs iTunes?
Amazon’s total operating expenses for 2012 were $60.4 billion, up from $47.2 billion in 2011. This included $2.4 billion on expanding and staffing its fulfilment centres. These costs meant that despite net sales rising $61 billion over the year, it was left with operating income down 22% annually to $676 million and a net loss of $39 million or $0.09 per share.
Analysts and investors didn’t seem too bothered though.
RJ Hottovy, an analyst at research firm Morningstar, said:
The growth rate shows not only are they taking share from bricks and mortar but also other online channels. You are seeing a consolidation of where people are going to for digital content. Apple's iTunes and Amazon are the stand-out destinations.
The stock rose 4.7% by the close of the next day to $272.7 as the markets backed Amazon’s potential over its profits.
Amazon acquires IVONA SoftwareAmazon acquires text-to-speech technology company IVONA Software, capping off a busy month that saw the Kindle Paperwhite launch in Canada, a third fulfilment center open in California and the introduction of Amazon AutoRip, which gave customers free MP3 versions of CDs purchased from Amazon. IVONA Software’s technology was already used for Amazon’s Kindle devices. It let users search for items by their voice.
Now Amazon owned the whole company and could use it to build more products using voice recognition technology. It also provided Amazon with its own answer to Apple’s Siri. Kerry Rice, an analyst at Needham & Co, said:
The Ivona acquisition could provide some technology on the Kindle to compete with Siri, although I would argue that Siri has not been all that was expected of it so far.
Investors seemed impressed and the stock rose 3.7% by the next day’s close at $283.9.
Kindle sales more than doubleAmazon starts shipping its Kindle HD as it reveals sales of its flagship devices more than double over Black Friday and Cyber Monday.
The company said Cyber Monday 2012 was the biggest day ever for Kindle sales worldwide and revealed that Kindle Fire HD was the most gifted and most wished for product on Amazon worldwide since launch.
The stock was already rising in the run up to the busy holiday season and it increased by 3.2% by the next day’s close to $243.3
Amazon posts a Q3 loss bit focuses on the positivesAmazon posts a loss and misses analyst expectations in the third quarter as it uses most of its update to explain why the Kindle is better than Apple’s iPad.
It was another busy quarter of investing in the business for Amazon as it introduced a fifth-generation e-reader, the Kindle Paperwhite plus a Kindle store opened in Japan.
Work on fulfilment centers got a boost ahead of the holiday season. Amazon said it will have 19 new warehouses opened in time to support holiday demand and it would hire more than 50,000 seasonal positions in the US on top of the 20,000 people already across its 40 U.S. fulfillment centers.
But new products as well as a 27% annual increase in net sales to $13.8 billion in the third quarter couldn’t stop a net loss of $274 million, or $0.60 per share. Analysts had expected it to be bad but not that bad and had forecast a loss of $0.07 per share.
Much of the loss was attributed to a $169 million writedown that Amazon made on an investment in daily deals website LivingSocial that it had backed in 2010.
The company predicted net sales of between $20.25 billion and $22.75 billion, or to grow between 16% and 31% annually. Amazon also forecast profits would range from an operating loss of $490 million to a profit of $310 million for the final three months of the year.
The markets remained mesmerised by Amazon’s sales growth and product development and the stock rose 6.8% to $238.2 by the close of the next day.
Amazon adds to the Kindle familyAmazon launches what it describes as the most advanced e-reader ever, the Kindle Paperwhite.
The idea was that the screen looked even more like an actual book with more pixels that made the colours clearer. It had up to eight weeks of battery life, that’s a lot of reading.
It also launched a range of high-definition Kindle Fires.
Investors were excited by the new tech and the stock rose 3.1% over the next day to $259.1
Flickr / Tolbxela
Rise of the robots but not profitsAmazon’s profits take another hit in the second quarter as the acquisition of Kiva Systems brings robotics to its fulfilment centers.
The company had spent recent quarters expanding its product range with releases such as Kindle and its Prime delivery and streaming service. A new string to its bow was robotics and Amazon acquired Kiva Systems during the quarter, which provided material handling technology. This would automate some of the picking and packaging at fulfilment centers to speed up deliveries.
Amazon said it took a net loss of $65 million related to the acquisition and integration of Kiva Systems during the quarter. Net income decreased 96% annually across the company to $7 million in the second quarter or $0.01 per share.
Net sales increased 29% annually to $12.83 billion in the second quarter as secured more licensing agreements to make Prime Instant Video a much watch-service. It expanded its catalog of title offerings to more than 18,000 TV shows and films including Braveheart, Forrest Gump and Silence of the Lambs.
Jeff Bezos, chief executive of Amazon, described Prime – priced at $79 per year - as “the best bargain in the history of shopping – that is not hyperbole.”
The stock rose 2.2% in the run up to the results but remained flat after the release. Maybe investors don’t like too much hyperbole or aren’t avid TV fans?
Amazon Web Services cuts costsImprovements are made to Amazon Web Services (AWS) and its video service continues to expand.
New security and customer service features were added to AWS as well as a free tier for developers to use Amazon’s technology and infrastructure.
It came as Amazon signed a licensing agreement with MGM to introduce classic films to its Prime Instant Video service such as Rain Man and Silence of the Lambs.
Prime Instant Video now featured more than 18,000 movies and TV episodes to instantly stream and enjoy at no additional cost as part of the delivery subscription service.
The stock rose 1.8% between June 14 and June 15 to $218.3 as investors backed the expanded services.
Amazon beats expectations despite profits declineAmazon beats its own and analyst expectations for operating income during the first quarter of 2012 despite profits continuing to fall.
Amazon’s investment over profits strategy continued as it posted a decline in operating and net income. Operating income was $192 million in the first quarter compared with $322 million in first quarter 2011. Net income decreased 35% annually to $130 million. But the results still beat Amazon’s own projections that estimated income would range from an operating loss of $200m to a profit of $100m for the first three months of 2012. That worked out as net income of $0.44 per share, which beat analyst forecasts of $0.07.
Net sales increased 34% to $13.18 billion in the first quarter, during which the Kindle Touch Wi-Fi and Touch 3G were rolled out among its international stores. Amazon also introduced a new version of its Kindle for iPad app and expanded its catalog of titles for Prime Instant Video.
The stock shot up 15.7% by the close of the next day to finish at $226 as investors seemed pleased with the sales figures despite falling profits.
Amazon tax affairs come under the spotlightReports claim Amazon generated sales of more than £3.3bn in the UK in 2011 but paid no corporation tax on those profits and is under investigation by the UK taxman.
Securities and Exchange Commission filings, spotted by The Bookseller website and reported by several outlets including The Independent, showed there was a tax inquiry into the UK operation.
Amazon’s affairs were also under investigation in the US, China, Germany, France, Japan and Luxembourg.
Its tax affairs were complex. The UK operation avoids paying tax as the ownership of the main Amazon.co.uk business was transferred to a Luxembourg company in 2006. The UK business is now owned by Amazon EU Sarl and the UK operation is classed only as an "order fulfilment" business. All payments for books, DVDs and other goods go directly to Luxembourg. The UK business is simply a delivery organisation.
Amazon said in a statement:
Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages, dispatching products to all 27 countries in the EU. We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation.
The stock remained flat at around $194.
Amazon adds more fulfilment centersAmazon adds new fulfilment centers in South Carolina, Delaware and Jeffersonville.
The company boosted its warehouse space in three areas.
First it announced plans on January 23 to open a new 1million sq ft fulfillment center in Spartanburg County, South Carolina. The facility would create hundreds of new full-time jobs and involve a $50 million investment in the state.
On February 14 it announced the creation of 850 jobs with the opening of a second fulfilment center in Delaware. Amazon said investment in the project would exceed $90 million. Another $150 million investment in a new Jeffersonville facility was also announced on March 27, creating up to 1,050 jobs.
The markets seemed more concerned about the level of investment and spending by Amazon on new centers rather than job creation though and the stock dropped by 2% between March 27 and March 28 to $201.1.
Kindle becomes a global bestsellerKindle sales triple in the fourth quarter of 2012 but is it harming sales of other Amazon products?
The Kindle had fast become Amazon’s flagship product and it said sales of the devices increased 177% annually during the nine-week holiday period. Its newly released Kindle Fire was the bestselling, most gifted, and most wished for product across the millions of items available on all Amazon websites.
As usual, there were no specifics on Kindle sales. Net sales across the company rose 35% annually during the fourth quarter to $17.43 billion but net income decreased 58% to $177 million.
Over the full year, net sales increased 41% on a yearly basis to $48.08 billion but a busy 12 months of hiring for expanded fulfilment centers – staff numbers were up 67% - and new Kindle releases saw operating income decline $862 million.
Amazon projected an operating loss of $200m to a profit of $100m for the first three months of 2012.
Analysts were starting to get impatient with falling profits and worried about Amazon’s other product lines.
Colin Gillis, an analyst at BGC Partners, said:
They are the number one in electronic books but not in films or music. I understand the strategy but I don't think they should have a premium just for being in investment mode.
The markets were also getting impatient and the stock fell 7.7% by the next day’s close to $179.4.
Amazon Kindle sales are on fireShoppers purchase millions of Kindle Fires and Kindle e-readers during the holiday season.
Amazon said customers purchased well over 1 million Kindle devices per week throughout December as it marked yet another record holiday season.
It was also a record-breaking holiday season for businesses that sold on Amazon. Third-party sellers experienced record holiday growth with the number of sellers who exceeded $5,000 in sales during the holiday season up 44% annually.
This wasn’t enough to wake the stock from a holiday nap and it remained flat at around $173.
Third quarter spending splurgeAmazon’s spending splurge continues with the release of a new Kindle, which pushes the company’s profits down for the third successive quarter.
The company was determined to take on the mighty Apple and beat its shiny iPad with a new and improved Kindle. The Kindle Fire was unveiled during the quarter, offering movies, TV shows, music, books, magazines, apps, games, and web browsing with free storage in the Amazon Cloud.
Amazon also announced three all new smaller and lighter Kindle e-readers at lower price points just in time for the festive season. Was there anyone who hadn’t purchased a Kindle yet?
Internationally, it launched a Kindle bookstore in France and entered the Spanish market with books, DVDs, video games, music, and consumer electronics as well as a local version of Amazon Prime.
Shoppers remained committed and net sales increased 44% annually during the third quarter to $10.8 billion. But yet again, all those expenses that come with new developments pushed net income down. It declined 73% annually to $63 million.
Amazon didn’t look like it was about to put its wallet away either ahead of the impending holiday season. Its guidance ranged from an operating loss of $200 million to $250 million profit, representing between a 142% and 47% decline.
The stock was already falling ahead of the results as the markets expected more losses. Amazon’s share price dropped 12.6% by the close of the next day to $198.4.
Analysts remained bullish though. Scott Devitt, an analyst with Morgan Stanley, said:
There are times when investors shoot first and ask questions later. Does the company still have a strong ability to grow? I think the answer is yes.
Flickr / Pierre Lecourt
Kindle Fire launchesAmazon unveils the Kindle Fire as part of a range of four new Kindles including a touch-screen version.
The Kindle Fire was Amazon’s answer to Apple’s iPad, providing an e-reader as well as an interactive tablet device where users could watch films, play games and browse the web.
It was priced at $199.
Jeff Bezos, chief executive of Amazon, said:
Kindle Fire brings together all of the things we've been working on at Amazon for over 15 years into a single, fully-integrated service for customers.
And you thought he started out only wanting to sell books.
This didn’t click with the markets though and the stock fell 3.1% to $222.4 by the next day.
Amazon movie library growsAmazon Instant Video users are spoiled for choice as the number of movies and TV shows passes the 100,000 mark.
Customers could rent or purchase new release movies starting at just $3.99, stream popular TV shows the day after they first aired and access their purchased video content from a cloud-based video library on any compatible device.
Plus, Amazon Prime customers got access to 9,000 titles at no extra cost.
The stock was already dropping and this announcement didn’t help. Amazon’s share price fell 1.9% by the next day’s close to $178.9.
e-books overtake real booksAmazon reveals that for every 100 print books Amazon.com has shipped, it has sold 105 Kindle books.
Founder Jeff Bezos may have baulked at the idea of virtual books when he started selling paperbacks from his garage in 1995 but Kindle books were now more popular 15 years later.
Amazon said it had sold more than three times as many Kindle books so far in 2011 as it did during the same period in 2010.
The stock had already been boosted in May by the opening of a new fulfilment center in Washington and the expansion of its Grand Forks customer services department.
It remained at around $198 between May 19 and the next day.
Max Pixel / MaxPixel's contributors
Amazon hits the $100 billion milestoneAmazon’s market capitalisation passes $100 billion as investors overlook falling profits in its second quarter results.
Increased investment in the business pushed Amazon into another quarterly loss but the markets were more than satisfied with the company’s sales figures.
Net sales increased an impressive 51% annually to $9.91 billion in the second quarter but that wasn’t enough amid all the spending the company was doing on boosting its products and services. Net income decreased 8% annually to $191 million in the second quarter, or $0.41 per share. That still beat analyst expectations of $0.35 per share though.
Investors were boosted by this and the stock rose 3.5% to a new high of $222.5 by the close of the next day. It kept climbing to $223.9, giving Amazon a market capitalisation of more than a $100 billion.
Profits slumpA busy quarter of product development pushes profits down in the first quarter of 2011.
The first three months of 2011 was a busy period for Amazon and its customers. It launched a new benefit for Amazon Prime members, unlimited and commercial free streaming of more than 5,000 movies and TV shows all for $79 a year. It also launched an eBookstore in Germany and a cloud drive for Android users to store music, photos and videos. Other costs included expanding its fulfilment centers. Amazon spent $855 million on its warehouses in the first quarter of 2011, up from $546 million a year before.
Net sales continued to grow, rising 38% annually to $9.86 billion, but all these snazzy new features cost money and net income decreased 33% annually to $201 million. Operating income was $322 million in the first quarter, compared with $394 million in first quarter 2010.
The markets seemed forgiving though and were more excited about revenues, which helped the stock rise 7.8% by the close of the next day to $196.6.
Amazon adds video to PrimeAmazon Prime users get a new benefit, unlimited, commercial-free, instant streaming of more than 5,000 movies and TV shows.
Customers were used to paying for Prime so they could get deliveries faster but now could watch films and TV shows while they waited for their orders to arrive.
Investors didn’t seem too happy about more spending on services and the stock fell 2.1% over the next day to $176.6.
A $10 billion quarterAmazon posts its first ever $10 billion quarter in the final months of 2010 but its profit margin slips in the fourth quarter.
The company had entered the holiday season expecting net sales of between $12 billion and $13.3 billion and came out at the higher end with $12.95 billion in the fourth quarter. It marked the first time that Amazon achieved more than $10 billion of sales in a quarter.
Kindle continued to drive Amazon’s sales, although no specific financials were given. The results revealed that Amazon.com was now selling more Kindle books than paperback books.
Since the beginning of 2010, for every 100 paperback books Amazon.com sold, the company sold 115 Kindle books. Additionally, during this same time period it sold three times as many Kindle books as hardcover books.
Its third-generation Kindle eclipsed Harry Potter and the Deathly Hallows as the bestselling product in Amazon's history during the quarter.
Operating income was slightly down after a busy quarter of development that included pushing out those Kindles and launching in Italy. Amazon posted operating income of $474 million compared with $476 million in fourth quarter of 2009. Net income increased 8% annually to $416 million or $0.91 per share.
Net sales for the year were up 40% annually to $34.2 billion, with net income up 28% to $1.15 billion in 2010, or $2.53 per share.
Despite the large sales figures, Amazon’s profit margin actually dropped between the third and fourth quarter of 2010 from 5.3% to 4.8%. This seemed to spook investors and the stock dropped 7.2% to $171.1 by the close of the next day.
Some of the downward pressure may have also come from a regulatory filing that showed chief executive Jeff Bezos had trimmed his stake in Amazon from 21.2% to 19.5%.
BofA Merrill Lynch said in a note:
Owning the stock here requires trust and patience. We have seen Amazon go through investment cycles before and believe investment in growth is the right long-term strategy.
Amazon to acquire LoveFilmAmazon seals a deal to acquire the remaining shares of European video subscription service LoveFilm.
The company already owned 42% of the business since 2008 and purchased the remaining 58% to complete its takeover, giving it access to customers in the UK, Germany, Sweden, Norway and Denmark.
Analysts backed the deal. Dharmarsh Mistry, a partner at Balderdon Capital, said:
LoveFilm is the Netflix of Europe and it will be central to Amazon's European and global strategy.
The markets weren’t so sure though and the stock fell 2.4% by the next day to close at $177.4.
Kindle is a bestsellerThe third-generation Kindle becomes the bestselling product in Amazon's history.
On Christmas Day, more people turned on new Kindles for the first time and purchased more Kindle books than on any other day in history. Amazon didn’t provide any actual figures though.
The company also announced that on its peak day, November 29, customers ordered more than 13.7 million items worldwide across all product categories, which was a record-breaking 158 items per second.
This didn’t do much for the stock though and it fell 0.6% to $181.
AWS removes WikiLeaksWhistleblowing website WikiLeaks is removed from Amazon Web Services (AWS).
WikeLeaks used the AWSs cloud computing service but it was removed earlier in December. This prompted rumours that Amazon had taken action because of pressure from lawmakers and it faced accusations of censorship.
But the company remained calm and released a statement clarifying that WikiLeaks had been removed due to "a violation of terms of service" because it was "securing and storing large quantities of data that isn't rightfully theirs, and publishing this data without ensuring it won't injure others.”
The markets liked the explanation and the stock rose 2.3% over the next couple of days to close at $178 on December 16.
Amazon Studios launchesAmazon starts the cameras rolling on a new venture, films.
The company launched Amazon Studios and invited filmmakers and screenwriters around the world to submit full-length movies and scripts to make money, get discovered and get their movie made.
Roy Price, director of digital product development, at Amazon, said:
We are excited to introduce writers, filmmakers and movie lovers to Amazon Studios. Full-length test movies will show stories up on their feet and attract helpful feedback at an early stage. We hope that Amazon Studios will help filmmakers experiment and collaborate and we look forward to developing hit movies.
The stock remained level at around $158 before Black Friday and Cyber Monday sales helped push the share price back up to $179.4 by November 30.
New models boost sales and profitsAmazon gets back in analyst good books with a third quarter sales and profit boost as it heads into the busy holiday season.
The company went into the third quarter worried about a slowdown in profits as it battles to dominate the e-reader market. But it came out with a 7% boost in operating income to $268 million and net income was up 16% annually to $231 million or $0.51 per share. This was helped by a 39% yearly rise in net sales to $7.56 billion in the third quarter.Analysts had forecast net income of $0.48 per share so were pleased to be wrong.
The quarter was dominated by Kindle news, with a new lighter and faster model offering an electronic-ink screen and 3G all for only $189. The new generation Kindle devices were the fastest-selling Kindles of all time and the bestselling products on Amazon.com and Amazon.co.uk, the company’s update said. More new models were ordered in the first twelve weeks of availability than in the same time frame following any other Kindle launch.
Speaking of models, Amazon.com launched a new exclusive fashion collection during the quarter called Heidi Klum for New Balance. It included tunics, knits, woven tops, leggings and outerwear pieces, all created for active women.
Amazon signalled a busy festive season ahead as it predicted net sales were expected to be between $12 billion and $13.3 billion for the fourth quarter. It still had concerns about operating income, which it forecast at between $360 million and $560 million, or between a 24% annual decline and 18% growth.
The stock still rose 2.5% by the close of the next day to a new high for the year of $169.1 off the back of the results.
Flickr / GillyBerlin
Kindle price warsThe price of Amazon’s flagship product, the Kindle, is cut again amid a price war with Barnes & Noble and Apple.
Amazon reduced the price of its e-reader for the second time in 12 months.
It was cut from $259 to $189 as the e-reader price war intensified.
The company was facing competition from the Nook, offered by its high street rival Barnes & Noble as well as the release of Apple’s iPad.
Allen Weiner, analyst at Gartner, said:
With new tablet technology, reading-only devices have been forced into a race to the bottom. We've only begun to see the price cuts.
The markets weren’t too keen and the stock dropped from $122.5 on June 21 to $108.6 by the end of the month – the lowest so far in 2010.
Amazon updates WebStoreBusinesses are given access to a new Amazon WebStore to help them sell their products through the retailer’s website.
Amazon WebStore offered new features including templates and marketing tools.
The stock rose by 2.2% over the next day to $124.8.
Amazon partners with NetflixAmazon’s technology is selected to help power streaming service Netflix.
Amazon Web Services (AWS) was already used by Netflix for its customer and back-end applications and now the technology would be used to improve its search tools and build movie lists and recommendations.
The markets were watching and the stock rose 5% by the next trading day on May 10 to $131.2.
Falling shortAmazon falls short of analyst expectations in the second quarter, pushing the stock down.
The company’s second quarter results looked good on paper even if it was all about e-readers. Amazon said it sold more than three times as many Kindle books in the first half of 2010 as in the first half of 2009. Over the past three months, for every 100 hardcover books Amazon.com has sold, the company has sold 143 Kindle books.
Beyond books, the Amazon.co.uk and Amazon.de websites each launched grocery stores offering customers free delivery on thousands of items from brands such as Kraft, Nestlé, Mars and Pepsi.
This helped push net sales up 41% annually to $6.57 billion in the second quarter, compared with $4.65 billion in second quarter 2009.
Operating income rose 71% to $270 million in the second quarter and net income increased 45% compared with a year before to $207 million in the second quarter, or $0.45 per share. That missed analyst expectations of $0.54 per share and the stock tumbled. It declined 11.4% since results day to hit $108 by the end of July.
The investor sell-offs came amid increasing competition in the e-reader market from Apple’s new iPad and a Nook device launched by Barnes & Noble. Amazon had already lowered the price of its Kindle to $189 but its results showed all this development and competition is costing it money. Amazon predicted that operating income in the third quarter would be between $210 million and $310 million, or between 16% decline and 24% growth compared with the third quarter 2009.
New competition concernsAmazon’s sales surpass $7 billion for the first time in the first quarter but it expects lower revenues in the following three months and faces new competition from Apple’s iPad.
The Kindle remained Amazon’s bestselling product, available for delivery for $259 with 500,000 books available. That’s a lot of reading time. The Amazon Prime low-cost delivery subscription service also hit its fifth anniversary, having been rolled out to the U.S., Japan, the United Kingdom, Germany, and France.
Amazon also launched new designs and branding on its WebStore service for sellers and created a messaging service for its Web Services e-commerce tool.
All this helped the company beat analyst expectations. Net sales increased 46% annually to $7.13 billion in the first quarter. Operating income increased 62% compared with a year before to $394 million, while net income was $299 million or 0.66 per share. That beat analyst estimates of $0.61 per share.
Despite this, its share price fell 4.2% by the next day’s close. Analysts blamed Amazon’s forecast of second quarter sales of between $6.1 billion and $6.7 billion as well as plans for technology giant to launch an iPad which could rival Amazon’s Kindle.
Sameet Sinha, senior analyst at JMP Securities, said:
The forecast is implying some sort of slowdown in growth. It seems that they're being conservative about revenues from Kindle because of the competition from the iPad.
Interesting readingSix Kindle books are now sold for every 10 physical books as Amazon gets a holiday season boost in the fourth quarter.
The company had gone into the holiday season worried about the effects of the recession. It predicted net sales would be between $8.1 billion and $9.1 billion during the fourth quarter, with operating income of $300 million to $425 million. But it was wrong. In a good way. Net sales increased 42% annually to $9.52 billion in the fourth quarter and operating income was up 75% to $476 million.
Net sales increased 28% to $24.51 billion during the whole of 2009, and net income was up 40% to $902 million. Amazon posted operating income of $1.13 billion for the year, up 34%. That’s a lot of Kindles for Christmas.
Jeff Bezos, chief executive of Amazon, was keen to talk up Kindle during the results.
Millions of people now own Kindles, Kindle owners read, a lot. When we have both editions, we sell six Kindle books for every 10 physical books. This is year-to-date and includes only paid books -- free Kindle books would make the number even higher. It's been an exciting 27 months.
Despite the positive results, the stock remained flat by the next day but then fell 5.6% by February 2.
Analysts cited Amazon’s quarterly gross margin for the slump. It was 20.8%, just below the 21% expected by Hamed Khorsand of BWS Financial. Khorsand said:
Their gross margin was lighter in the quarter than I was expecting but they offset that by just managing their operating expenses. People saw the gross margin number and that’s probably what caused the stock to react negatively initially.
The slump also coincided with Amazon’s rival for the retail crown Walmart’s announcement that it would grow its e-commerce business. This suggested it could go head-to-head with Amazon online and could be vying for top spot in the retail world.
Amazon Web Services to expand into AsiaAmazon announces that its Amazon Web Services (AWS) tools will be made available in the Asia-Pacific region.
Developers could access AWS infrastructure services such as cloud storage and customer database management in Singapore and other parts of Asia during the first half of 2010.
The stock rose 1.8% over the next day to $132.9 as investors backed the expansion of AWS.
A new best-sellerForget physical books, virtual ones are the future as the Kindle becomes Amazon’s best-selling item.
The Kindle became the top selling item by both unit sales and dollars during the third quarter of 2009. Amazon didn’t give specific financials for the product but net sales increased 28% annually across the company to $5.45 billion in the third quarter. Amazon started shipping the Kindle internationally in the same week that its results were announced and lowered the price to $259. Readers could now access more than 350,000 titles as well as US and international newspapers.
Sales were helped by free shipping. Everyone loves free delivery and Amazon.com launched “Local Express Delivery” during the quarter, a new shipping option giving customers same-day delivery on thousands of items in New York, Philadelphia, Boston, Baltimore, Las Vegas, Seattle and Washington D.C through Amazon Prime. It also started offering free-same day delivery to Prime users in Japan and removed the £5 threshold for free shipping in the UK.
Operating income for the fourth quarter was up 62% annually to $251 million and net income was 68% higher compared with a year before at $199 million. That’s not a bad performance to have in a recession.
It also set Amazon up for the holiday season and it predicted net sales would be between $8.1 billion and $9.1 billion during the fourth quarter, with operating income of $300 million to $425 million. That would be a range of growth between 10% and 56%. What recession?
Wikimedia Commons / Wandelopa
Kindle price cutAmazon lowers the price of its Kindle and makes it available internationally as it tries to compete with Apple’s iPhone and iPod touch success.
Shoppers could now get their hands on a Kindle e-reader in the US for $259 instead of $299 and access more than 350,000 books that they could carry around in their pocket on a single device. It could also now be shipped internationally for $279.
The markets bought into the price cut and the stock rose 1.3% to $95.2.
Amazon acquires Zappos.comAmazon takes a step into footwear and outdoor apparel sales with the acquisition of Zappos.com.
The deal, valued at $807 million, would see the brands operate separately and Zappos’ management team and staff would remain intact.
Zappos was the shoe equivalent of what Amazon was for books online, pioneering footwear sales on the internet.
The purchase gave Amazon’s stock a kick and it rose 5.7% by the next day to $93.8.
Litigation pushes down Amazon’s profitsAmazon’s profits fall in the second quarter but it is litigation rather than recession which pushes it down.
Amazon and Toys “R” Us had been in a long-running dispute since 2004 over toys. The online retail giant had signed a deal with Toys “R” Us in 2000 to sell its toys but later also distributed its own. A court ruled in 2006 that Amazon had breached its contract and let Toys “R” Us launch its own separate website. Three years and a separate appeal later and Amazon was ordered to pay a settlement of $51 million to Toys “R” Us. Amazon said this charge and foreign currency exchange rates pushed its operating income for the second quarter down 27% annually to $159 million. Net income was down 10% annually to $142 million in the second quarter, or $0.32 per share.
The stock had risen 24% in the preceding two weeks in the run up to the results. But a $928 million acquisition of online shoe store Zappos.com and net sales of $4.65 billion, up 14% annually, wasn’t enough to sustain this or make investors feel better about the reduced profits. The stock fell 7.8% by the close of the next day to $86.4.
McAdams Wright Ragen analyst Dan Geiman also warned that the economic downturn wasn’t over yet and could still hit Amazon.
It wasn’t the blow-out quarter necessarily you’ve seen from them in recent quarters. This downturn is far more severe than people are factoring in, and it’s not over yet.
A good Q1 readAmazon beats its profit expectations in the fourth quarter and releases a new Kindle as its results continue to defy concerns about the recession.
The company started the year worried about consumer spending. It predicted net sales of $4.5 billion and $4.9 billion and ended up with $4.89 billion. Operating income increased 23% annually to $244 million in the first quarter, better than the predicted range of $125 million to $210 million.
The boost was helped by the launch of Kindle 2. Amazon chief executive Jeff Bezos didn’t give any figures but said Kindle sales had “exceeded our most optimistic expectations.”
The company also launched its MP3 music service in Germany during the quarter and began testing a video game store across its websites.
Investors found the results a good read and the stock rose 4.7% to $84.4 by the close of the next day.
LGBT books ‘mistakenly’ removed from rankingsLesbian, gay, bisexual, transgender, feminist, and politically liberal books are found to have been excluded from the online retailer’s bestseller lists.
The company blamed a glitch after it had attempted to make its best-seller lists more family friendly.
Some users complained that this meant books classed as ‘adult material’ weren’t included and authors tackling subjects such as LGBT issues were also excluded.
Amazon said this was not company policy and its system was amended, although it never explained how it decided which type of books would be featured.
This unnerved the markets and the stock fell 5.2% over the next two days to close at $74.7 on April 14.
Unsplash / daniel james
Amazon integrates Kindle with iPhonesAmazon launches a Kindle Store that can be accessed through Apple iPhone and iPod touch devices.
Amazon launched a Kindle for iPhone app that could be used in Apple’s Safari browser.
It was a case of if you can’t beat them, join them. Amazon was squaring up to Apple in the gadgets market and now was giving Apple users access to Kindle books through their smartphones.
Ian Freed, vice president of Amazon Kindle, said:
The most common feedback we heard from customers was that they wanted a better experience for purchasing new Kindle books from their iPhones. We’ve been working hard to respond to that feedback with a new web site optimized for Safari on iPhone and we’re excited to do that.
The stock remained at around $78.
Amazon unveils Kindle 2Amazon launches Kindle 2.
Just a year after launching the first Kindle, the latest e-reader device had a new slim design with longer battery life, faster page turns, seven times more storage, sharper images, and a new read-to-me feature.
It was the latest sign that Amazon was getting into Apple’s gadget territory. But the markets weren’t so sure and the stock dropped by 5% over the next day to $63.3. The drop coincided with uncertainty over whether Amazon’s read-to-me feature was legal. It later said it would be up to publishers to offer the feature.
Feeling festiveAmazon finished 2008 better than expected with a boost in its fourth quarter results and profits hitting the higher end of its expectations despite the global recession.
The National Bureau of Economic Research declared in December 2008 that the US had entered recession amid the housing market crash. Amazon had already lowered its profit expectations in preparation for this, but its results were at the higher end of its predictions.
Operating income increased 28% annually to $842 million. This was at the top end of Amazon’s forecast of $745 million to $920 million.
It was helped by an 18% yearly rise in net sales over the holiday season, with $6.7 billion in the fourth quarter, while revenue for the year was up 29% to $19.7 billion. Net income increased 36% annually to $645 million in 2008.
Amazon.com said it shipped over 3 million units worldwide in fourth quarter 2008 on behalf of sellers using its fulfilment centers, so there was no sign of the recession hitting consumer spending.
However, the company recognised the worrying wider economic situation and predicted its net sales would only grow between 9% and 19% annually in the first quarter of 2009 to between $4.5 billion and $4.9 billion. It predicted operating income between $125 million and $210 million, or between a 37% decline and 6% growth. There was no financial guidance for the year ahead, after all it is quite hard to predict how consumers will feel amid a global financial crisis.
The markets were impressed with Amazon’s 2008 performance amid the recession and the stock rose 17.6% by the close of the next day at $58.8.
Amazon records fastest selling holiday seasonAmazon ends the year with record holiday sales.
The company revealed that 6.3 million items were ordered worldwide on the peak day, December 15, which was a record-breaking 72.9 items per second. It was a big year for Twilight fans and Amazon sold enough Breaking Dawn books that stacked end-to-end would reach the summit of Mt. Everest eight times.
Many of the items could have been ordered on Amazon’s new app for iPhone and the iPod touch that was launched earlier in December.
However, the positive sales couldn’t stop the stock dropping 4.8% by the next trading day to $49.4 on December 29.
A not so merry Christmas aheadAmazon’s third quarter results suggest even the online retail giant won’t be spared from consumer spending fears over the holiday season.
The company traditionally predicted record sales for the quarter ahead at this time of the year as it headed towards Christmas. There was no such festive spirit this time round. Instead, Amazon lowered its sales and profit expectations for the next three months. Net sales were expected to be between $6 billion and $7 billion during the fourth quarter, down from the $7.2 billion previously forecast.
Amazon also suggested its operating income could be between $145 million and $305 million or ranging from a 46% annual decline to 13% growth during the fourth quarter That isn’t very encouraging when the holiday season was usually Amazon’s busiest period.
It also lowered its annual operating income expectations. Amazon predicted 2008 operating income would range from $716 million to $876 million. That was down from a range of $745 million and $920 million predicted in the previous quarter.
The gloomy forecasts masked a busy quarter that saw Amazon.com ship more than 1 million products on behalf of businesses through its fulfilment centers. It launched a version of Amazon Prime in France and autos and apparel stores in Germany as well as personal care categories in the UK. Amazon.co.uk also lowered its free shipping threshold from £15 to £5. This activity pushed net sales up 31% annually to $4.26 billion during the third quarter. Net income rose 48% to $118 million or $0.27 per share.
Amazon’s stock had already been tumbling during the third quarter along with most other listed companies. Global stockmarkets crashed in October amid the financial crisis and increased state interventions, bank bailouts and failures that all harmed consumer and investor confidence. Lehman Brothers collapsed in September 2008 and Federal Reserve chairman Alan Greenspan said in October that the crisis was "a once-in-a-century credit tsunami.” Amazon’s stock ended October down 17.4% to $57.4 and fell to a low for the year of $35 on November 20.
Amazon redeems final notesAmazon unveils plans to redeem its remaining 4.75% Convertible Subordinated Notes due 2009.
The company announced that it would redeem the remaining principal amount of approximately $399 million of its outstanding notes on September 17 2008. The notes would be redeemed at a redemption price of 100.475% from August 1 2008 through September 16 2008. The right to convert the notes into common stock of Amazon.com would expire on September 16 2008 with a conversion price of $78.0275.
The price of the stock on the day of the announcement was already higher than the conversion price at 83.1 so investors weren’t too pleased that new shareholders could buy in cheaper at $78. The stock fell to $81.2 by the next day.
Amazon keeps spending despite recession fearsAmazon lowers its financial outlook again in its second quarter results and predicts its operating income may even decline over the next three months.
The prospect of a recession and reduced consumer spending got closer as banks struggled to survive the housing market crash. The Federal Reserve guaranteed the bad loans and toxic subprime assets held by hedge fund Bear Stearns so it could be acquired by JP Morgan in March and cut interest rates by 75 basis points.
Amazon was still spending and developing its way through the turmoil. It acquired textiles store Fabric.com during the quarter and had also purchased audiobooks provider Audible in March. It launched a convenience store pickup service in Japan. The company took some costs off its balance sheet after selling its European DVD rentals business to LoveFilm.
Amazon posted net sales for the quarter of $4.06 billion, up 41% annually. Operating income rose 86% compared with the second quarter of 2007 to $217 million, which Amazon said included a $53 million non-cash gain as part of the LoveFilm sale.
But Amazon recognised that it wasn’t immune to the economic environment and warned that its operating income was expected to be between $115 million and $160 million for the third quarter. That sounds like a decent sum but would mean 6% decline at the lower end and 31% growth at most.
This prompted an investor sell-off and the stock fell 9% by the end of July to $73.3.
Unsplash / Isaac Smith
Amazon pricing tactics criticisedAmazon UK is criticised for trying to stop publishers from direct selling titles at a discount from their own websites.
The company’s somewhat one-sided argument was that they should be able to pay the publishers based on the lower prices offered on their websites, rather than on the recommended retail price. Publishers weren’t happy, with some saying that no-one had the right to tell someone else how much to sell their book for.
The markets didn’t seem too impressed either and the stock fell 1.6% between the trading days of June 6 and June 9.
Will a recession stop Amazon’s rise?Amazon slashes its profit expectations in its first quarter 2008 report amid concerns about the US economy.
The subprime mortgage crisis began to hit the US as banks suffered from large loan-to-value loans given to homeowners who were struggling to repay. What started as a banking crisis could soon hit Amazon customers though. Banks became less willing to lend to each other at the start of 2008, creating a liquidity issue as lenders and therefore their customers could not access loans for their mortgages or businesses. This wasn’t just a problem for Amazon’s US customers. Northern Rock was nationalised by the UK government in February, while US lawmakers introduced the Economic Stimulus Act in the same month to try to boost the economy by giving Americans tax rebates.
Amazon recognised these economic fears in its first quarter results and revised down its operating income forecasts to between $740 million and $940 million. That compared with a range of $785 million to $985 million that it had predicted just months before.
Sales expectations were slightly increased to between $19.1 billion and $20.0 billion.
Its sales and profit figures were still impressive for the quarter though. Net sales increased 37% annually to $4.13 billion and net income rose 30% to $143 million or $0.26 per share.
This was helped by a 100% increase in diamond sales during the quarter. Maybe shoppers needed to cheer themselves up with something shiny amid the economic gloom?
The markets were clearly worried about the banking crisis sparking a global recession though, which could hit consumer spending. Amazon’s stock dropped 4.9% the day after the results were released to $77.6 before bouncing back up to $80.8 a day later.
Amazon completes its acquisition of AudibleAmazon takes sole control of Audible.
Amazon had already taken a 5% stake in Audible back in May 2000 and now was taking a big bet on audiobooks becoming as big as paperbacks and hardbacks.
It completed a $330 million deal to buy all shares of Audible, making it an official Amazon subsidiary.
Stifel Nicolaus analyst Scott Devitt said:
Audible was already the exclusive partner for Amazon’s digital audio offering on Amazon.com. Audible will benefit from an immediate branding event and become integral to the very bright future of Amazon Kindle.
The markets were also pleased and the stock rose 4.2% by the next day’s close to $73.1.
Amazon unveils debt and stock repurchase programsAmazon’s board authorizes a debt and stock repurchase program. It comes as Amazon acquires Audible.com for $300 million and its European arm becomes the largest shareholder in DVD rental service LoveFilm in the UK and Germany.
The board allowed Amazon to redeem or otherwise retire up to all of its remaining 4.75% Convertible Subordinated Notes due 2009, of which $899 million was outstanding and 6.875% Convertible Subordinated Notes due 2010, of which €240 million was still owed.
The company was also authorized to repurchase up to $1 billion of stock within the next 24 months. It meant Amazon could repurchase its shares when it believed that doing so would boost shareholder value, which was corporate speak for bumping up the share price.
The share price had already been falling amid the financial crisis and its Audible and LoveFilm acquisitions in recent weeks so this could provide a boost when needed.
The stock rose from $73.1 on February 8 when the repurchase program was announced to $75.1 on the next trading day of February 11.
$1 billion warchestAmazon’s warchest surpasses $1 billion as it beats expectations for its fourth quarter and full year 2007 results despite consumer spending concerns.
The company had already spent money last year on rolling out its Amazon Prime delivery service to record numbers in the US, UK, Germany and Japan and launched portable book reader Amazon Kindle which let users download 90,000 books, magazines and newspapers to read on the go.
Yet it still managed to finish 2007 with free cashflow up 143% annually to $1.18 billion. This was helped by net sales, which increased 42% annually to $5.67 billion in the fourth quarter. Net income increased 112% compared with the end of 2006 to $207 million in the fourth quarter, or $0.48 per share.
The net income figure was in line with analyst estimates but it beat expectations for net sales, with observers expecting revenues of $5.37 billion. It also beat its own expectations for the year. Net sales increased 39% to $14.84 billion and operating income increased 69% annually to $655 million.
For 2008, Amazon predicted net sales between $18.75 billion and $19.75 billion and operating income between $785 million and $985 million.
The results coincided with wider concerns in the US during 2007 about subprime loans and a housing market crash as mortgage delinquency rates rose and banks became exposed to large amounts of bad loans. Analysts thought this may limit consumer spending and there were warnings about an impending recession but the markets liked Amazon’s optimism and the stock rose 4.7% by the next day’s close to hit $77.7.
Unsplash / Sharon McCutcheon
Amazon wraps up record holiday seasonDVD players and Nintendo Wiis help Amazon reach another record holiday season.
The company said its busiest day was December 10 when customers ordered more than 5.4 million items, which was 62.5 per second. It sold enough high-definition DVD players to cover seven football fields.
The markets were feeling merry and the stock rose 1.5% by the next day to $94.2.
Amazon relocates but stays localAmazon announces it is staying in its hometown of Seattle but unveils plans for a new headquarters.
The company’s new headquarters would include up to 11 new buildings on six blocks in the heart of South Lake Union. It expected to start moving in from mid-2010 before reaching full occupancy in 2011.
The markets weren’t moving though and the stock remained level at $91.
Amazon introduces Prime in the UK and GermanyAmazon’s one-day delivery subscription service, known as Prime, launches in the UK and Germany in the first weeks of November.
Like in the US, the popular service offered unlimited one-day delivery on millions of items with no minimum spend in return for a monthly fee.
The markets were excited about the expansion and the stock rose 3.4% between November 5 and November 6 to $87.2.
Share price hits record high for the new millenniumAmazon ups its full-year financial expectations for the second time in 2007 after an impressive third quarter.
The company had a busy three months, launching a test version of a digital music store called Amazon MP3. It contained more than 2million songs from 180,000 artists.
There was also a new shoe and baby store in the UK and Germany and a homes and kitchens collection in France.
All these developments helped push net sales up 41% annually to $3.26 billion in the third quarter. Operating income rose 207% to $123 million in the third quarter on an annual basis and net income rose 313% to $80 million.
Amazon remained bullish as it headed into the holiday season. It raised its net sales expectations to between $14.2 billion and $14.6 billion and predicted operating income could range between $605 million and $675 million.
The stock rose 10.5% in the run up to the results to close at a record high for the decade of $100.8 but fell to $88.7 the next day.
Scott Devitt, managing director at analysts Stifel Nicolaus, had an interesting take on the bounce.
Expectations got ahead of themselves. You have a stock that has gone from $30 to $100 in a matter of 15 months and at some point you crossed fair value.
Amazon creates new jobsAmazon announces that its Lexington fulfillment center is seeking to hire more than 400 full-time positions to support growing customer demand.
The announcement was followed on October 12 by the opening of 200 new roles at Amazon’s customer service center in Grand Forks.
The jobs boost came amid concerns about a housing market crash and possible impending recession in the US so was good news for those seeking employment.
The Lexington vacancies gave the stock a 1.3% boost by the next day to $93.4.
Money, money, moneyAmazon’s pile of cash gets bigger as profits continue to soar.
A new jewelry and watches store in the UK, the launch of Amazon Prime in Japan and more than 2.2 million pre-orders of yet another Harry Potter release gave the company a second quarter boost.
Net sales increased 35% annually to $2.89 billion, helping operating income to rise 149% to $116 million. Net income increased 257% compared with a year before to $78 million.
This left Amazon with a record $700 million of free cashflow. That’s a lot of books or whatever you want to buy from Amazon these days really.
The results also marked a decade since Amazon’s initial public offering (IPO). A $1,000 investment in Amazon’s stock at its IPO on May 17 1997 would be worth £3,520 a decade later, a 252% increase. This doesn’t include stock splits.
The stock jumped 24% by the close of the next day’s trading on July 25 off the back of the results to $86.
Unsplash / Ibrahim Boran
Amazon unboxes video downloadsAmazon Unbox is made available through Tivo.
The company had already revolutionised online retail and now was doing the same with video rentals. It launched a video download service called Amazon Unbox in September 2006 and the service was being rolled out to a mass audience by partnering with Tivo.
It meant Tivo customers could browse, purchase, and rent more than 10,000 movies and television shows from the comfort of their own couch.
The stock remained level initially at around $70 but rose to $75.1 by July 13. Was this the future of video?
Amazon adds another fulfilment centerAmazon opens a new fulfilment center in Goodyear, its second in Arizona.
The new 500,000 square ft opening would create more than 600 full-time positions, with an additional 700 temporary positions during the 2008 holiday season.
The stock rose 2% off the back of the news to $84.2 by the next day’s close.
Amazon launches into groceriesForget books and DVDs, now Amazon can help you with the food shop.
The company launched into groceries, offering automatic delivery of non-perishable items from brands such as Kellog’s and Huggies at chosen intervals with a free shipping and a 15% discount.
Amazon's Grocery store was honored as one of only two US companies hailed for its "strong launch into online grocery retail" by international food and grocery expert IGD.
The markets were impressed with the latest innovation and the stock rose 4.4% to $63.2.
First quarter sales surpass $3 billionSales push past $3 billion for the first three months of the year as Amazon ups its expectations for 2007.
Net sales had already reached $3.99 billion for the fourth quarter of 2006 but that could easily be attributed to the holiday season. Amazon showed that shoppers were still spending in the first quarter of 2007 though as it reported net sales were up 32% annually to $3.02 billion.
This was helped by the launch of a new sports and leisure store on its UK website and a toy store in France. It also unveiled a partnership with UK retailer Marks and Spencer to power its online sales systems.
The sales boost helped Amazon report a 38% annual increase in operating income to $145 million while net income was up 115% to $111 million.
Amazon also revealed that 240,000 developers have registered to use its cloud computing and storage offering Amazon Web Services, up 50% annually.
Amazon was feeling confident and used its first quarter update to raise its 2007 financial guidance to between $13.4 billion and $14 billion for net sales and operating income ranging from $463 million to $593 million. That was up from previous forecasts of $13 billion to $13.7 billion for net sales and operating income ranging between $355 million and $505 million.
Investors echoed the optimism as the stock rose 37% by the end of April to $61.3.
Annual profits slideAmazon’s net profit falls during the final three months of the year but it still manages to deliver annual profits within its own forecasts and reports record sales of the latest Harry Potter book.
Increased spending and taxes, as well as the loss of a contract with Toys “R” Us in 2006, affected Amazon’s financial performance for the fourth quarter of 2006.
Net sales increased 34% to $3.99 billion in the fourth quarter but net income declined 51% to $98 million, blamed on income tax expenses that had risen by $130 million.
It still managed to meet its annual net sales expectations, with a 26% rise to $10.7 billion and operating income fell 10% to $389 million, which was attributed to increased spending during the year on new products such as a toy range. Got to replace that Toys “R” Us stock somehow. The operating income figure was still within Amazon’s own forecasts of $310 million to $440 million.
Analysts were satisfied despite the falling profits, especially with Amazon forecasts of $13 billion to $13.7 billion of net sales for the year and operating income ranging between $355 million and $505 million.
Scott Devitt, analyst for Stifel Nicolaus, said:
You have to be a patient investor to own Amazon.It is a very, very long-term business in terms of hitting a leverage point. Nobody knows when it’s coming. Some don’t believe it.
The stock took a small dip by the end of the next day, closing down 3.6% at $37.3.
Unsplash / Agence Olloweb
Health supplements and coffee pods boost record holiday salesAmazon heralds yet another record breaking holiday season.
The company said its busiest day was December 11 when customers ordered more than 4 million items.
It said it sold enough orange flavored Airborne health supplements to supply every passenger on 192 Boeing 747s. Plus, there were enough coffee pods sold to make coffee for everyone in Austin, Texas.
The news gave the stock a slight caffeine kick and it rose 1% to $40.2 by the end of the next trading day.
Amazon spends, spends, spendsAmazon’s spending splurge continues, pushing down its free cashflow and profits in its third quarter results.
The company entered the season of giving having already spent a lot of its own money. It launched digital video download service Amazon Unbox during the third quarter as well as a car parts website for the US and beauty products in Japan. It also launched Amazon Business Solutions, which gave small – and medium-sized enterprises access to its underlying website technology to manage orders and customer service.
This spending pushed free cash flow down 23% annually to $366 million. People were still buying though and sales increased 24% to $2.31 billion in the third quarter. But the investment in new products and services meant operating income decreased 28% annually to $40 million in the third quarter. Net income was $19 million in the third quarter, or $0.05 per share, compared with net income of $30 million, or $0.07 per share in the third quarter 2005.
The markets were feeling festive and the stock rose 10.6% by the end of the next day to close at $37.6.
Amazon opens up its services to sellersAmazon opens its fulfilment and website functionality to small and medium-sized businesses. It follows yet another product launch with the unveiling of a digital video download service called Amazon Unbox.
The company already let businesses sell their products through its websites and would now help firms store and deliver items to customers and create their own branded website using Amazon’s technology.
For a handling fee as low as $0.50 per item plus $0.40 per pound and a storage fee of $0.45 per cubic foot per month, Fulfillment by Amazon picked, packed, shipped and provided customer service for the products they sell online.
Investors backed this move and the stock rose 1.9% over the next day to $32.1.
Amazon board backs share buybacksAmazon’s board authorizes the company to repurchase up to $500 million of stock within the next 24 months through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions or a combination.
A statement from Amazon said it may do this if it believes its shares are undervalued.
It was the first time the company had taken this course of action and came as the stock had been falling amid market concern about high levels of spending and investment.
Unsplash / Carlos Muza
Amazon plays with its profitsAmazon lowers its future profit expectations in its second quarter results as it plans a toy spending splurge.
The company wasn’t in a playful mood despite net sales rising 22% annually in the second quarter to $2.14 billion. Its operating income was hit by a legal dispute with Toys “R” U, which ended with a contract between the two brands being terminated. Toys “R” Us claimed Amazon had breached an exclusivity contract by offering other toys through its website. A judge agreed and the contract was cancelling, taking away fees owed to Amazon. Amazon took a $20 million hit and its operating income decreased 55% annually to $47 million. It also attributed this to more spending on technology and content, which timed with the relaunch of its own toy and baby category.
Amazon claimed the increased spending would boost net sales during 2006 and raised its expectations to between $10.1 billion and $10.6 billion. That was up from a range of $9.85 billion to $10.45 billion. But growth costs money and Amazon revised down its profit forecasts for 2006 to between $310 million and $440 million. That was down from a range of between $370 million to $510 million.
The markets weren’t impressed and the stock fell 21% to $26.2 by the close of the next day’s trading.
Amazon launches Print-On-Demand ProgramAmazon launches a service to support books being published as they are ordered.
The aim was to save publisher’s money by removing the need for them to pay large amounts for printing and only producing copies of titles when they were actually ordered. Think of all the trees that were saved.
The Print on Demand program was provided through an Amazon subsidiary called BookSurge.
The stock was already surging and rose from $33.9 on May 19 to $34.8 by the next trading day on May 22.
The downsides of a strong dollarAmazon first quarter results warn that future profits could be hit due to a legal dispute with Toys “R” Us as foreign exchange rates weigh on its operating income.
A booming housing market since 2005 and increased foreign investment had boosted the US economy and kept the dollar strong but the pound and euro were relatively weak, which created an issue for reporting on international sales when Amazon posted its first quarter results for 2006.
Net sales across the business increased 20% annually to $2.28 billion in the first quarter but would have been up 25% excluding the $94 million unfavorable impact from annual changes in foreign exchange rates.
International segment sales, representing Amazon’s UK, German, Japanese, French and Chinese sites, were $1.03 billion, up 18% annually. Excluding the unfavorable impact from annually foreign exchange rates, international net sales growth was 29%.
Similarly, operating income decreased 2% compared with the first quarter of 2005 to $106 million. Excluding the $8 million unfavorable impact from annual changes in foreign exchange rates throughout the quarter, operating income would have grown 6% annually.
Exchange rates weren’t Amazon’s only problem though. It was facing a lawsuit from former partner Toys “R” Us. The brands had signed a deal in 2000 for Amazon to sell Toys “R” Us products. But Toys “R” Us claimed Amazon breached this agreement when it started to allow others to sell toys through the website. The New Jersey Superior Court ruled that Toys “R” Us should be able to setup its own website and agreed that Amazon had breached the terms of the deal which gave it $50 million in fees.
Amazon said it was appealing the decision and warned that if it was unsuccessful, its operating profit could be reduced by $50 million for the year, including by as much as $25 million for the second quarter.
The results pushed the stock down 2.8% by the next day to $34.50.
Amazon adds cloud storage to web servicesAmazon Web Services (AWS) adds another feature, unveiling cloud storage for developers and announces plans to open a new fulfilment center in Leipzig – its second in Germany.
It gave developers access to the same storage infrastructure that the retailer used for its own websites and represented a further shift for the company from being a bookseller to now becoming an e-commerce software provider.
The stock remained level at just under $37.
Flaticon / Pixel perfect
Legal settlement pushes profits lowerAmazon performs at the higher end of its own expectations as it delivers a full-year, albeit lower, profit for the second year in a row. It also announces a partial redemption of convertible subordinated notes worth €250 million.
The company’s full-year and fourth quarter 2005 results showed net sales increased 23% annually to $8.5 billion. It had predicted net sales between $8.05 billion and $8.65 billion for the year.
Operating income was down 1.8% annually to $432 million, blamed on a legal settlement involving a patent dispute. Net income fell 38.9% during the year to $359 million, which Amazon attributed to a $95 million income tax expense from moving assets abroad. Its operating income was at least still in the range of $385 million and $510 million that Amazon had predicted at the start of 2005.
Its fourth quarter results still made positive reading, helped by the usual holiday season boost. Net sales increased 17% annually to $2.98 billion in the fourth quarter. However, net income was $199 million in the fourth quarter, or $0.47 per diluted share, down 42%. This was attributed to income tax expenses.
The company tried to look on the bright side though, as it surpassed $500 million of free cash flow for the first time, hitting $529 million. Looking ahead, Amazon predicted net sales of between $9.85 billion and $10.45 billion for 2006 and operating income ranging from $370 million to $510 million.
The image of founder Jeff Bezos swimming in a pool of money didn’t do much for investors and the stock declined 10.3% annually to $38.3 by the close of the next day.
Another record holiday seasonMore than 108 million items are purchased during the holiday season through Amazon, its best ever performance.
The 2005 holiday season also brought another single-day record with the Delight-O-Meter, which tracked holiday sales figures, revealing more than 3.6 million items were ordered, or 41 items per second, on December 12.
Amazon.com sold enough running shoes to outfit nearly every participant in this year's Boston Marathon, the company said.
The last order placed on December 22 in time for Christmas delivery contained a pair of 14K Yellow Gold Four Prong 4mm Square sapphire stud earrings.
This didn’t give the stock its usual end of year boost though and it instead held at $49.
Amazon ends Drugstore partnershipAmazon ends its fulfilment services agreement with Drugstore.
It had previously sold some of the online pharmacy and health retailer’s products online as part of a stake it took in the company in 1999.
Amazon, which launched its own health and personal care store in 2003, said it now had direct relationships with major brands in this market such as Procter and Gamble and Unilever so it didn’t need Drugstore to help source stock anymore.
The companies said the termination was mutually agreed. Amazon maintained its 14% investment in Drugstore as well as its seat on its board.
The stock was already falling off the back of Amazon’s third quarter results and this announcement didn’t do the share price much good. It stayed flat at around $39.
Unsplash / Thought Catalog
Legal settlement pushes profits lowerA $40 million legal settlement pushes down Amazon’s profits but the latest Harry Potter sales ensure its revenue doesn’t lose its magic.
Amazon avoided a protracted trial with e-commerce software company Soverain which had accused it of infringing its patents. A claim, first filed in 2004, alleged that Amazon was using Soverain technology on its website to recognize a customer and make faster purchases. Amazon denied wrongdoing but settled the claim during the third quarter of 2005 with a hefty $40 million, which meant it avoided a court clash.
It didn’t reflect so well on Amazon’s profits for the quarter though. Operating income decreased 32% to $55 million in the third quarter, compared with $81 million a year before. Excluding the negative impact of the $40 million legal settlement, operating income would have increased 17% to $95 million.
Net income was $30 million in the third quarter, or $0.07 per share, compared with $54 million, or $0.13 per share in third quarter 2004. Overall, net sales had increased 27% to $1.86 billion in the third quarter.
This was helped by more than 1.6 million sales of copies of Harry Potter and the Half-Blood Prince worldwide, making it Amazon.com's largest new product release.
That wasn’t enough to stop the share price sliding though. It fell 13.6% by the close of the next day to $39.7 on October 26.
Profits fall but prospects remain highAmazon beats analyst expectations for net sales but net profits are down in the second quarter due to tax expenses.
Net income at Amazon was down for the second quarter in a row. This time it was due to a change in the way income tax is charged as some of its assets were transferred abroad from the US. Net income was $52 million in the second quarter or $0.12 per share, down from $76 million a year before. This included a $56 million income tax expense, compared with $5 million income tax expense in the second quarter 2004. The results looked better on an operating income basis, rising 21% annually to $104 million.
Amazon’s strategy of focusing on increased sales continued to work as revenues rose 26% annually to $1.75 billion, which beat analyst expectations of $1.73 billion.
The company was also feeling magical after it received orders for more than 1.5 million copies of Harry Potter and the Half-Blood Prince worldwide in advance of its July 16 release, making it Amazon.com's largest new product release.
Investors were impressed with the results and the stock rose a dazzling 16.5% by the close of trading on July 27 at $43.6.
Amazon turns 10Amazon marks its 10th anniversary by planning special deliveries to select customers by an actor, musician, athlete or author.
Randomly selected customers across the US would open their doors to find a favorite actor, musician, athlete or author personally making "Special Deliveries" of their Amazon.com order alongside a UPS driver. The deliveries took place over 10 days from July 7 and included actor Harrison Ford and musician Moby.
Investors weren’t partying initially and the stock remained at around $34 until July 12 when news that Amazon had received a record 1.4 million advance orders for the latest Harry Potter book pushed it up to $38.1 by a week later on July 20.
Unsplash / Ray Hennessy
New accountancy rules weigh on Amazon’s profitsAmazon’s first quarter profits are pushed down by new accounting rules.
The company adopted new accountancy rules a year early in January 2005 that meant it treated stock-based awards as an expense. The SFAS 123 rules effectively added to a company’s costs and reduced its profits.
Amazon cited this change as it reported operating income decline 2% annually to $108 million in the first quarter of 2005. Excluding a $14 million impact from the early adoption, operating income would have grown 10% to $122 million, Amazon said.
Net sales were still up 24% annually to $1.9 billion.
The launch of Amazon’s new Prime delivery service in the previous quarter was going well though. Jeff Bezos, chief executive of Amazon, said:
We're seeing especially heavy use of Amazon Prime in electronics, tools, kitchen, and health and personal care. For $79 a year, Amazon Prime members get 'all-you-can-eat' free express shipping. Getting your items right away changes the way you use and think about Amazon.com.
The markets weren’t as excited though and the stock fell 3% by the close of trading on April 27 at $31.3.
Amazon partners with M&SAmazon goes shopping for a high-profile e-commerce alliance as it agrees a deal to power the technology behind leading supermarket Marks & Spencer’s website.
Under the terms of the agreement, Amazon Services Europe would host and provide the technology behind the M&S branded website and its in-store and telephone ordering and customer services systems. M&S would remain responsible for the management of its website, customer service operations, warehousing and distribution.
The markets backed this partnership and the stock rose 1.5% to $33.2.
Amazon unveils new Prime service in full-year resultsAmazon partially redeems €200 million of convertible subordinated notes and introduces America to a new membership program called Prime but fails to impress analysts with its fourth quarter and full-year results for 2004.
The company unveiled its first ever membership program as part of its results presentation. For a flat membership fee of $79 per year, members could get unlimited, express two-day shipping for free using Prime, with no minimum purchase requirement. Members also got one-day, overnight shipping for only $3.99 per item -- order as late as 6:30PM easter time. Founder Jeff Bezos described it as “all you can eat express shipping.”
The announcement came off the back of $2.54 billion of net sales in the final three months of the year, up 31% annually. But its net income figure of $149 million or $0.35 per share missed analyst expectations of $40 per share.
Net sales for the full year were $6.92 billion in 2004, up 31% annually, while operating income was $440 million or $588 million on a net basis.
The figures were boosted by a new DVD rental service for $7.99 per month and hundreds of thousands of pre-orders of the sixth installment in the Harry Potter series that was due for release in July 2005.
Electronics and general merchandise sales grew 53% to $1.69 billion for 2004, representing 24% of worldwide net sales, while during the Thanksgiving weekend, consumer electronics sales in the US exceeded books sales for the first time in the company's history.
This left Amazon confident about the year ahead. It predicted net sales between $8.05 billion and $8.65 billion and operating income ranging from $385 million and $510 million.
The results didn’t deliver for the markets though and Amazon’s share price fell 13% by the close of trading on February 3 to $34.2.
Amazon Web Services expands to Canada and FranceAmazon’s cloud computing and development tools are made available for developers to use on its Canadian and French websites.
Amazon Web Services let developers create tools and applications using the retailer’s technology and software and now this could be done specifically for the Canadian and French markets. It was already available in America, Japan, the UK and Germany so was now operating in all of Amazon’s markets.
This couldn’t wake the stock up and it fell 1.9% by the next day’s close to $40.3.
Amazon hits tenth holiday seasonAmazon marks its tenth holiday season with record sales.
The company set a single-day record during the holiday sales season with more than 2.8 million units ordered, or 32 items per second, worldwide. Consumer electronics sales surpassed book sales for the first time during the period, Amazon revealed. This showed Amazon was no longer just known for cheap books.
The stock was already benefiting from a festive boom and rose 6.3% over the next day to $44.6.
Free shipping hits US profitsAmazon blames free shipping as its US business posts a reduced operating profit during the third quarter of 2003.
Shoppers could get free shipping on orders above $25. The theory is simple, you can fill your online shopping basket with everything from books to DVDs and toys and as long as it is over $25 you will get it delivered free. But it still costs Amazon money to deliver the goods.
Sales from North America, representing the company's US and Canadian sites, were $816 million, up 15% annually. But operating income declined $5 million to $57 million, compared with last year. Amazon said increased adoption of free shipping contributed to an increase of $7 million in net shipping loss compared with the third quarter of 2003.
Luckily, Amazon’s international websites offset the reductions. Sales on its UK, German, French, Japanese and Chinese sites, were $646 million, up 52% annually and accounted for 44% of worldwide net sales.
Net sales across the company were up 29% annually to $1.46 billion. Operating income was $81 million, compared with $52 million in the third quarter of 2003. Net income was also impressive at $54 million or $0.13 per share.
It was a busy quarter for spending and investment in the company, with the launch of a toy range in Germany and Japan as well as the unveiling of Amazon Web Services. This gave developers access to Amazon technology for storage and cloud computing and to develop online tools.
This wasn’t enough to impress analysts though, who had expected a target of $0.18 per share. Investors responded by selling out and the share price dropped 13.1% over the next six days to hit a low for the year of $34.2 on October 27.
Amazon Web Services gets a boostDevelopers are given access to more Amazon features such as customer reviews and images as the company continues its rollout of Amazon Web Services (AWS).
Amazon’s new e-commerce tools for AWS users provided more data and functionality for developers to use its technology on their own sites. It provided access to data on popular purchases and more options for building applications including an advanced search function and the ability to embed and allow Amazon-style wishlists to be incorporated onto other sites and searched for beyond only using someone’s name.
The stock remained level at around $41.
Amazon enters Chinese market with Joyo.com acquisitionAmazon acquires the largest online retailers of books, music and videos in China, Joyo.com.
It would become Amazon.com's seventh global website and Amazon.com's entry into China would allow it to service the more than 80 million consumers already online in the country.
The move to a new market, and one as big as China, gave the stock a 2.3% boost to finish the next day at $39.5.
Amazon’s profit isn’t music to everyone’s earsAmazons ups its guidance for the full year as its sales continue to boom, and it looks and sounds all the better after beauty and musical instrument stores are added to its US brand.
The company added a new string to its ever-growing bow during the second quarter of 2004, with beauty products and musical instruments now available to online shoppers.
Net sales for the quarter grew 26% to $1.39 billion in the second quarter helping Amazon to operating income of $86 million and net income of $76 million or $0.18 per share.
This prompted Amazon to release new financial guidance and it revised up its operating profit expectations to between $400 million and $460 million. This was up from between $355 million and $455 million predicted at the start of 2004.
But analysts weren’t singing from the same song sheet. The consensus among analysts was for a profit of $0.19 per share, so Amazon was a penny below. The markets were fussy though and the stock fell 12.8% by the close of trading on July 23.
Amazon opens second UK fulfilment centerAmazon chooses Inverclyde, Scotland as the location for its second UK fulfilment center to help speed up deliveries across the country.
The new facility was set to be operational in the second half of 2004 and expected to create up to 300 new jobs within 18 months. It joined Amazon’s existing UK fulfilment center at Marston Gate, near Milton Keynes.
The stock had already been rising from $41.1 on May 17 and hit $50.9 by the end of May.
Sparkly first quarter salesAmazon shows how much of a global brand it is becoming as half of its net sales come from overseas for the first time during the first quarter of 2004.
The company’s results for the first quarter of 2004 revealed the true meaning of operating on the world wide web. North America segment sales grew 20% annually to $847 million but sales from its UK, German, French and Japanese sites, grew 80% to $684 million.
Net sales were a record $1.53 billion in the first quarter across the company, compared with $1.08 billion a year before. The launch of a jewellery store on Amazon.com helped lift sales and Amazon delivered a sparkly operating profit of $110 million and net income of $111 million or $0.26 per share.
Jeff Bezos, chief executive of Amazon, said: "During our beta test more than 100,000 customers ordered items from our jewelery store.
While the average margin in jewelery retailing is approximately 45% to 50%, we target substantially lower margins on our jewelry sales, and lower still -- about 13% -- on diamond jewelry. This is in keeping with our strategy of driving growth through low prices.
Amazon predicted its sales for the second quarter would be between $1.34 billion and $1.44 billion. This was below the high end of analyst expectations and while the stock had risen 6.1% in the two days leading up to the results, they fell 4.1% by April 23 compared with the previous day’s close to $46.
Price cuts and new storesA busy few weeks of store launches helps push the Amazon stock back upwards.
Amazon’s apparel and accessories store reached 1 million customers on March 9 and there was a new house and garden shop launched on its German site a day later followed by a computer store in Japan on March 16. Amazon.co.uk also got a DIY store on March 24.
Canadian customers weren’t left out. They were told on April 5 that a 30% discount on books priced at more than $25 would continue.
It was all happy reading for investors and the stock hit $48.1 by April 5, up 15% from March 22.
Cheese straws help push up Amazon profitsAmazon completes a full year in profit for the first time and it’s down to more than just books.
The online retailer revealed net income was $35 million for 2004 or $0.17 per share. Operating income was $271 million, surpassing its expectations a year before of $115 million.
Amazon reported that net sales were $1.9 billion for the fourth quarter, up 36% annually, helping it post $5.2 billion for the full year. Its update showed just how far it has moved on from just selling books. Electronics and other general merchandise revenues exceeded $1.1 billion in 2003 and chief executive Jeff Bezos said year-round free shipping had boosted sales and provided an insight into demand for products. He said:
In addition to purchasing thousands of $29 DVD players this holiday season, customers also bought Tibetan yak cheese, pomegranate molasses and zero carb cheese straws.
The company predicted net sales of between $6.2 billion and $6.7 billion for 2004, with operating income coming in between $355 million and $455 million.
Despite the good news, Amazon’s share price fell 6.8% by the close of the next day on January 27, reflecting investor concern that higher profits would stop Amazon cutting prices.
Thomas Szkutak, the company's chief financial officer, wasn’t too worried about further price cuts. He said in a conference call with investors:
You should expect to see pressure on gross margins. We view that as a great investment in the business.
Flickr / Heather Joan
Amazon redeems notes againAmazon announces another $150 million of convertible subordinated notes will be redeemed on February 26, 2004.
The notes were due to mature in 2009 and approximately $900 million would be outstanding.
The notes would be redeemed at a redemption price of 102.375% of the principal amount at maturity, plus accrued and unpaid interest from February 1 through February 25 2004.
The right to convert the notes to be redeemed into common stock of Amazon.com would expire on February 25 2004 and the price would be $78.
Investors didn’t seem impressed. The share price had already been falling from $57.1 on January 19 as the markets feared price cuts off the back of Amazon's fourth quarter results and fell to $46.4 by February 4, an 18.7% decline.
Amazon wraps up “busiest holiday season”It’s a record holiday season yet again for Amazon as it sets a single-day record for more than 2.1 million units ordered, or 24 items per second, worldwide.
The last order placed in time for Christmas delivery occurred at 11:32 a.m. on Tuesday December 23. It contained the perennial Christmas favorite Forensic Pathology, Second Edition.
The order was delivered to Vail, Colorado on December 24.
The stock had already been rising since December 17, which coincided with Pearl Jam joining its Amazon Advantage program to sell its new single Man of the Hour directly to the website’s customers.
Its share price was at $47 on December 17 and rose 12.7% by the end of the year at $53 after the festive sales boom was recorded.
Amazon reveals sales growth from new “search inside” featureAmazon reveals sales for books that could be viewed inside before purchasing outpaced other titles by nine percentage points in the first five days of launch.
The “search inside the book” feature let shoppers find books at Amazon.com based on every word inside more than 120,000 items. This involved more than 33 million pages of searchable text.
It launched with 190 publishers and 37 additional publishers had already contacted Amazon.com requesting to participate. The stock remained stuck at around $56 despite the sales boost.
Flickr / Jeffrey Beall
Amazon announces notes redemptionAmazon announces a partial redemption of its 4.75% convertible subordinated notes.
The company announced that on November 24 2003 it would redeem $200 million in principal amount of its outstanding 4.75% convertible subordinated notes. The notes were due in 2009.
They would be redeemed at a price of 102.850% of the principal amount at maturity plus interest and there would still be $1.05 billion outstanding.
The conversion price for the notes was set at $78. This compared with the current lower price of $54 on October 24 and the stock remained level over the next day.
Amazon feels merry in run up to the holiday seasonAmazon bounces back into a net profit for the third quarter as it predicts a record holiday shopping season.
The company beat analyst expectations with its third quarter performance. Net sales were $1.13 billion in the third quarter, compared with $851 million a year before. Sales were helped by the launch of a sporting goods store in the US and electronics in Japan.
Operating income was $52 million compared with an operating loss of $10 million in third quarter of 2002. But it was the net income figure, excluding costs such as restructuring and stock compensation payments, that impressed the markets. Analysts had expected a return of $0.10 per share but Amazon reported a net profit of $0.11 per share.
Amazon predicted a bumper holiday season, anticipating between $1.76 billion and $1.91 billion of net sales. It also upped its expectations for the full year, predicting net sales of between $5.75 billion and $6.25 billion.
Chief executive Jeff Bezos predicted:
Thanks to free shipping and low prices, we expect more customers to turn to us for their holiday gifting needs this year—producing our biggest holiday shopping season ever.
The markets weren’t quite in the festive spirit yet though and the stock fell 8.9% by the end of the next day’s trading to $54. Analysts were baffled by this.
Paul Keung, analyst with CIBC World Markets, told CNN:
Investors sold off on the good news. We saw a similar thing with eBay as well after it reported earnings. But there's very little in Amazon's report that would trigger long-term investors to sell the stock. There were no surprises and everything pretty much went according to plan.
Amazon combats fraudAmazon teams up with the New York Attorney General to file lawsuits in the US and Canada to stop 11 online marketers using the company’s name to send email forgeries.
Amazon was cracking down on email forgeries, also known as "spoofing," that affected the company and risked ripping off and misleading customers into thinking they were making genuine purchases from the online retailer.
Simultaneously, the New York Attorney General's office announced a settlement of civil fraud charges with one of the email forgers identified by Amazon.com. The settlement agreement prohibited Cyebye.com from using third parties' names to market, unless the company obtained authority to do so. Amazon.com also reached a settlement with Cyebye.com, which included monetary damages.
The stock remained at around $45.
Harry Potter casts a spell on Amazon’s stockThe release of the latest Harry Potter book keeps the magic going in Amazon’s stock.
Amazon posted net sales of $1.1 billion during the second quarter of 2003, which was up an impressive 37%. Sales at Amazon’s core US business grew 20% to $703 million but growth was driven from its international sites in the UK, Germany, France and Japan, which registered an 81% rise in sales to $397 million during the quarter.
Much of the boost was helped by a bespectacled wizard from Britain. Harry Potter and the Order of the Phoenix was released in June and 1.4 million copies were sold through Amazon. Magic!
This helped the company achieve operating income of $42 million, or 4% of net sales, compared with $1 million in the second quarter of 2002. Amazon still fell to a net loss of $43 million, the equivalent of $0.11 per share. This was an improvement on the $0.25 loss per share a year before.
Amazon showed it expected the magic to continue for the rest of the year and upped its sales expectations to between $4.9 billion and $5.1 billion, compared with $4.7 billion previously.
The results also seemed to cast a spell on the markets and the stock rose 15.2% by the close of the next day on July 23 to finish at $40.1.
Flickr / Picasa
Amazon opens up fulfilment services to other sellersAmazon launches a new subsidiary called Amazon Services which will make its order technology, customers services and fulfilment centers available for use by other retailers on its website.
Amazon Services let sellres on its website use its e-commerce technology, fulfilment and customer service.
The idea was that rather than being a rival to smaller firms and risking putting them out of business, it would help get them online and use its technology to make sales.
Jeff Bezos, chief executive of Amazon, said:
These retailers can grow their online businesses faster and less expensively by taking advantage of what we've learned and built over the past eight years, while still preserving 100% of their own branded look and feel.
The stock remained level at around $34.
Back in the redAmazon falls back to a net loss during the first quarter but still beats analyst expectations for its operating income.
The company posted net sales of $1.08 billion in the first quarter of 2003 compared with $847 million in the first quarter 2002, an increase of 28%. But costs of employee stock schemes and a $12 million cash payment to terminate the lease on a fulfilment center that Amazon closed in Georgia in 2002 contributed to a net loss of $10 million.
Operating income was still up, growing $45 million over the year to $40 million, or $0.10 per share. This beat analyst expectations of $0.04 cents per share for the period.
Amazon also tried to excite investors by forecasting that its net sales would be $4.7 billion or more, growing by 19%m by the end of the year. This did seem to do the trick and Investors weren’t too bothered about the net loss. The stock rose 15.1% by the next day on April 25 to $28.9.
Google licenses web search and sponsored links to Amazon.comAmazon signs a multi-year agreement that will make Google's search technology and targeted sponsored links available on Amazon.com.
The deal meant Amazon shoppers would also see Google sponsored links and relevant search results when shopping for items to boost their experience.
The stock remained level at around $26.
Record quarterly and annual salesAmazon reaches record sales for both the fourth quarter and full year as it exceeds its financial forecasts.
The company had come a long way from selling books from founder Jeff Bezos’ garage as it recorded $1.4 billion of sales in the fourth quarter and $3.9 billion for the full year, which was a 26% increase. Amazon had previously forecast an 18% rise in sales for the year.
This led to operating income of $71 million for the fourth quarter and $64 million for the full year. The company made a net profit during the quarter of $3 million but couldn’t quite do it for the full year, posting a net loss of $149 million.
There had been plenty of costs during 2002 that pushed down its returns, including lease charges on vacant warehouses following job cuts and restructuring as well as expansion into apparels and accessories.
Investors were given some good news internationally. Amazon’s UK, German, French and Japanese sits saw sales rise 76% to $461 million in the fourth quarter and exceeded $1 billion for the first time during the year with sales of $1.169 billion in 2002. International operating profit was $20 million in the fourth quarter, or 4% of net sales, and approached breakeven for 2002.
The company was in the mood for big predictions and forecast net sales would grow 15% during 2003 and expected operating profits to be more than $115 million.
The markets weren’t as excited though and the stock crawled up 1.8% to $22.1 by the close of the next day.
Unsplash / Markus Winkler
Busiest holiday season everAmazon reveals it recorded its busiest holiday season ever with more than 56 million items ordered worldwide from November 1 to December 23, 2002.
The website continued to benefit last minute shoppers and the last Christmas delivery order was placed at midnight on Monday 23 December. The order contained the books The Fall of Berlin by Anthony Read and David Fisher and A Bend in the River by V.S. Naipaul, and the CDs Mozart: Requiem conducted by Sir Colin Davis and Chips from the Chocolate Fireball by the Dukes of Stratosphear. The order was delivered to Salt Lake City in time for the holiday. Interest tastes.
The markets were happy though and the stock rose 2.5% to $24 by the end of the next day.
High profile hiring spree continuesAmazon gets technical as it snaps former chief scientist at Yahoo Udi Manber.
He was given the role of vice president and chief algorithms officer for Amazon and had an impressive CV. He wrote a book called Introduction to Algorithms - A Creative Approach, as well as more than 50 technical articles so could help Amazon use technology to improve the customer experience and ultimately boost sales.
Amazon also announced a new board member, Thomas Ryder. He was chairman and chief executive of the Reader’s Digest Association and replaced Scott Cook who had stepped down from the Amazon board.
The markets seemed impressed at the talent that Amazon was attracting and its plans to improve its algorithms. The stock stayed level initially at $19 but rose to $22.2 by November 15.
Costs catch up with AmazonIncreased restructuring expenses push Amazon back into a loss for the third quarter of 2002 and its stock is caught in the dot com crash.
Amazon’s restructuring, including staff layoffs and the closure of distribution and customer service centers in Seattle and Atlanta in 2001 had helped the company keep costs down and sustain an operating profit throughout 2002. But lease costs on the vacated offices had been revised, costing the company $37 million during the quarter. This pushed it into an operating loss of $10 million. It would have posted a $27 million operating profit without the charge.
In better news, net sales were $851 million, compared with $639 million in the third quarter 2001, an increase of 33%, which exceeded the company's guidance of between $780 million and $830 million.
Amazon got even more bullish on its full-year expectations, forecasting an operating profit of $200 million. This was way above the $30 million predicted at the start of 2002.
The company couldn’t escape the wider stockmarket malaise though. Its share price fell 6.5% by the end of the month to $18.5, as the dot com bubble continued to burst amid doubts over valuations of tech stocks.
Amazon announces new partnershipsA swathe of new partnerships help wake up the sleepy stock.
Amazon announced that it would offer Office Depot products through its website, giving it a new office furniture range. This was accompanied by the extension of partnerships with discount holiday company Hotwire and National Leisure Group to provide vacation bookings through a travel channel.
This sent the stock flying by 7.8% to $16.5 by the next day’s close.
Amazon names new CFOAmazon names a new senior vice president and chief financial officer (CFO).
The markets had been rocked by the resignation of Warren Jenson as Amazon CFO and the company hoped to impress investors with his replacement. Amazon named Thomas Szkutak as its new senior vice president and CFO.
He joined from General Electric and described himself as “a bug fan of the company.”
Amazon founder Jeff Bezos said Szkutak would help “drive down costs so that we can even further lower prices for customers."
The appointment couldn’t stir the stock though and it remained at around $14.
Amazon sustains profits but stock suffersAmazon stays in operating profit for the third consecutive quarter and revises its financial performance expectations yet again despite fears over a dot com bubble.
Shoppers were increasingly turning to Amazon for electronics, tools and kitchen goods, pushing sales growth in this segment up 16%, double the performance from the first quarter of 2002. This helped net sales grow 21% annually to $806 million.
Its books, music and video sales remained a must-watch, posting operating profit of $82 million for the second quarter of 2002.
Additionally, Amazon’s international stores continued to reduce their losses. International segment sales, from the company's UK, German, French and Japanese sites, grew 70% to $218 million, and its operating loss improved by 66% to a loss of $10million.
The results looked good based on operating profit, which was $1 million, compared with a loss of $140 million a year ago. It still made a net loss of $94 million or $0.25 per share, almost half the $0.47 per share loss of a year before.
The sales boost encouraged Amazon to again increase its expectations for the year. It predicted net sales would grow by over 18% for the full year, up from 15% forecast in the first quarter.
The financial results weren’t enough to sustain Amazon’s share price though. It was caught in the bear market that had emerged over the past year amid concerns over tech stock valuations. Its share price fell 14.4% by July 26, a three-month low.
Amazon launches Web ServicesThe first version of Amazon.com Web Services launches, providing a platform to support developers and website owners with software and cloud computing tools.
By using Amazon.com Web Services, developers could build applications and tools that allow them to incorporate Amazon.com features into their websites such as product listings that could automatically be added into a shopper’s checkout cart.
The markets were weren’t too moved though and the stock remained level at around $16 by the next day’s close.
Amazon hits Canada and expands partnershipsAmazon unveils a dedicated Canadian website and separately partners with Virgin Entertainment to power its website in the US and Japan. American customers can also benefit from a free shipping offer.
The company added Canada to its growing list of countries that it operated in. The site featured books, CDs, videos and DVDs in Canadian dollars and shoppers would benefit from the increased speed and low rates of shipping from within Canada.
Amazon also announced it would work with Virgin Megastore to replicate its in-store experience online and in the US. It also lowered the threshold for free shipping in the US from $99 to $49 to see how it would boost sales. The stock rose 3.2% to $15.8 as the markets got excited by the company expanding.
Amazon resolves SEC accounting inquiriesAmazon avoids enforcement proceedings after the Securities and Exchange Commission had launched an informal inquiry into its accounting treatment and disclosures for some of its strategic alliances. It also extended its marketing partnership with Drugstore.com to keep its health and beauty stores going.
The informal inquiry, first disclosed by Amazon.com in October 2000, related to the revenue recognition, equity investments, and other accounting and disclosure matters on Amazon.com's commercial and stock purchase agreements with its marketing partners.
Separately, Amazon.com reached a settlement with the SEC regarding an accounting investigation involving allegedly improper accounting at luxury retailer Ashford.com, which it had a 16.6% stake in since 1999. The investigation found Ashford improperly deferred $1.5 million in expenses under a contract with Amazon.com, causing Ashford.com to materially understate its marketing expenses.
The investigation found Amazon "was a cause" of Ashford.com's violations. Amazon agreed, without admitting or denying the SEC's findings:
To cease-and-desist from committing or causing violations of the provisions of the federal securities laws.
Two Ashford executive were fined as part of the investigation.
Amazon’s share price had already been falling in the run up to the inquiry announcements and it fell 2.8% between 10 June and 14 June to $16.8.
New DVD sales recordAmazon sets a new record for DVD pre-orders for copies of Harry Potter and the Sorcerer’s Stone.
Shoppers were choosing to pre-order online rather than queuing at video stores for the latest Harry Potter release. The company revealed it had already received more than 100,000 pre-orders for the DVD of Harry Potter and the Sorcerer's Stone to be released on 28 May.
Flickr / Martin Pettitt
Amazon ups financial forecastsAmazon posts a $2 million operating profit for the first quarter of 2002 and ups its income expectations for the year.
Booming sales both in America and internationally helped Amazon report net revenues of $847 million for the quarter, up 21% annually. International sales grew 71% to $226 million, making up a third of the whole company’s total revenue. Operating profit in its US books, music and DVD divisions grew 68% while operating losses in the US electronics, tools and kitchen segments declined by 55% to $21 million.
Amazon revised its 2002 forecasts off the back of the results, anticipating operating income to be more than $100 million instead of the $30 million it forecast in the first quarter. It also upped its net sales expectations to more than 15% from 10% previously.
The company even felt confident enough to drop its book prices by 30% on orders of more than $15-its third price cut in nine months.
Investors enjoyed reading the accounts and the share price jumped 19.2% by April 24 to $16.7.
Amazon reaches 5 million UK customersAmazon passes the 5 million customer milestone in the UK as it also launches its marketplace in Europe.
The Brits loved Amazon as much as the Americans and Amazon revealed that in February alone, Amazon.co.uk had 2.685 million unique visitors.
It came as Amazon made its Marketplace available in the UK and Germany.
This let customers buy and sell new, used and collectable items on the same page that Amazon sells the item new.
Amazon Marketplace orders were responsible for approximately 15% of total Amazon.com orders in the fourth quarter of 2001, the company revealed.
This couldn’t stop the stock declining 5.1% to $14.7 as Amazon continued to get caught up market volatility caused by the dot com crash as well as a dent in investor confidence about valuations after the Enron scandal had revealed accountancy frauds.
Amazon CFO resignsAmazon announces its chief financial officer Warren Jenson will leave the company.
Jenson had been appointed CFO in September 1999 but Amazon announced he would resign in September and help look for a successor. No reason was given for his departure.
His quote was the usual PR guff that it was:
The appropriate time to move on to a new set of challenges.
Amazon founder Jeff Bezos credited Jenson with helping push thee company to profitability.
Warren has assembled a world-class finance team and has worked to establish a clear path for our company to reach our 2002 objective of generating positive operating cash flow-- and possibly even free cash flow-- for the year. All of us at Amazon have enjoyed working with Warren, and we will miss him when he leaves.
Analysts weren’t too impressed.
Salomon Smith Barney analyst Lanny Baker said:
The CFO replacement process and transition period may be an overhang until resolved.
The stock rose 2.5% initially over the next day to $16.3but then fell to $15.6 by March 7 off the back of analyst concerns.
Amazon keeps its profit promiseAmazon marks its first ever billion-dollar quarter as it keeps its promise to have reached a profit in the final three months of 2001.
The company’s fourth quarter 2001 results showed record sales of $1.12 billion. It also lived up to its lofty promise that it would make a profit during the quarter and did so on both an operating and net basis. Amazon posted operating profit for the quarter of $59 million and net profit of $35 million or $0.09 per share.
Its performance was driven by books, music and video sales, which brought a profit of $64 million. In contrast, its electronics, tools and kitchen segments had a loss of $20million for the quarter, although this was an improvement on the $52 million loss a year before.
International segment sales across the Company's UK, Germany, France and Japan sites grew 81% during the quarter. Amazon said its UK and German sites had a combined operating profit but there was an operating loss of $11 million across all its international stores. This was down by 76% annually.
Net sales across the business for the full year were a record $3.12 billion, a 13% annual increase. Amazon predicted operating income of $30 million for the year ahead.
Analysts were surprised that Amazon had met its profits pledge.
It was the 81% in international sales growth that drove the surprise. The rest comes from a lot of different places, predominantly from the cost side. There's lower marketing costs, a big improvement on fulfillment--in absolute dollars, it dropped by $21 million year over year.
Said Jeff Fieler, an analyst at Bear Stearns.
The markets were also pleased and the stock closed up 24% on the day to $12.60.
Unsplash / Ray Hennessy
Amazon gets holiday season boostAmazon reveals that almost 40 million items were ordered through its websites globally during the holiday season between 9 November and 21 December.
The company had launched a Delight-O-Meter to track how many items had been ordered during the festive period and no-one could have imagined it getting to 37.9 million.
The best-selling products included 450,000 Harry Potter books and the Shrek video and DVD.
Investors even felt a bit festive and the stock rose 2.8% by the next day to $10.9.
Amazon launches alternative websiteAmazon unveils a website for the visually impaired.
The site offered a streamlined version of Amazon.com's standard Internet destination with less text and graphics, providing access to Amazon.com's full line of products and personalization features.
The text and user functions were fully compatible with screen access software, which read aloud the text and links displayed for the user. The software allowed users to enter text, jump from link to link and navigate a site through the use of special keystrokes.
That wasn’t enough to impress investors and the stock fell from $12.1 to $11.7 the next day.
Terror attacks rock the marketsThe US business maintains its profitability for the second straight quarter as Amazon is hopeful of reaching its target to be back in black by the end of 2001. But its share price is caught up in the September 2001 terror attacks and fears over wider stockmarket valuations.
Amazon’s third quarter results for 2001 showed its US operations posted an operating profit of $1 million, while its books, music and video segments in America were profitable for the sixth consecutive quarter.
Chief executive Jeff Bezos remained confident about Amazon’s prospects. He said the company had lowered its operating costs by 20%, which was a nice way of saying thousands of members of staff had lost their jobs. For shareholders, this meant operating losses improved by 60% to $27 million or 4% of net sales. The net loss per share fell to $0.16 compared with $0.25 a year before.
But it was a volatile quarter for the stockmarket and technology stocks in particular. Amazon and its customers were affected by the September 11 terror attacks on the Twin Towers and sales suffered. Net sales were flat for the quarter at $639 million.
Amazon said in its third quarter update:
Customer purchases significantly declined but have recovered. We estimate that the net sales impact as a result of the events of September 11, 2001 was between $25 million and $35 million.
Additionally, the dot com bubble, that had helped foster Amazon’s meteoric rise, was getting closer to bursting. Investors were already questioning technology stock valuations and confidence was further eroded when energy company Enron collapsed amid a false accounting scandal.
If you're buying books over $20 from anywhere but Amazon.com, you're probably wasting money.
Said Bezos, trying to inject some optimism.
But analysts didn’t think the same about the stock. Merrill Lynch analyst Henry Blodget reduced his rating to “neutral” over the short-term. He said:
We still believe Amazon will eventually build a successful business. With little visibility into 2002, however, and the prospect for additional declines in the core business, the stock appears expensive. The company continues to make progress toward profitability, but revenue growth continues to decelerate.
These outside factors, more than Amazon’s results, appear to have pushed the stock down 36% by the end of the month to a record low of $6.
Amazon hits the right TargetTarget is revealed to be the latest brand to get its own store on Amazon.com.
The companies announced that Target would use Amazon’s e-commerce service to sell its discounted products such as home and sportswear.
Under the five-year strategic alliance, Amazon.com would receive per unit fees and annual fixed fees while Target would get access to its 35 million customers.
As good as the news was, the announcement was overshadowed by the 9/11 Twin Towers terror attacks and the stock fell to $7.2 by the time markets had reopened on 17 September.
Edging closer to profitabilityOperating losses fall into single digits as the company signals it is getting closer to profitability.
Amazon’s second quarter results showed it was profitable for the three-month period in the US for the first time, delivering $2 million profits.
Net sales rose 16% annually to $668 million over the whole quarter, while its operating loss fell 69% annually to $28 million or 4% of net sales. It posted a net loss per share of $0.16 compared with $0.33 a year before.
Amazon also expanded strategic its strategic alliance with search engine AOL to power its online retail offering.
The update didn’t click with investors though and the stock fell 25% by the end of the next day’s trading to $12.
Amazon agrees high profile partnerships with AT&T and AOLAmazon’s app is made compatible with AT&T Wireless and it expands its online reach with AOL.
Amazon agreed with AT&T Wireless to give all its Digital PockNet device customers access to Amazon Anywhere, helping them shop on the move.
With this agreement Amazon Anywhere had alliances with 12 mobile phone carriers and service providers worldwide.
Amazon also expanded its alliance with AOL to boost the shopping experience for users of its browser. AOL users would be directed to Amazon products in search results and AOL would also be promoted by the online retailer as its chosen internet service provider. AOL also announced it had made a $100 million equity investment in Amazon.com common stock.
The news coincided with disappointing second quarter results and the stock fell 28% from $16 on 23 July o $11.5 on 25 July.
Amazon takes music, video and DVDs to JapanAmazon adds music, video and DVD categories to its Japanese website.
The company had launched a Japanese-language website in November 2000 for books and now was ready to expand the range to music, video and DVDs.
Since launching Amazon.co.jp, Amazon said it has more than doubled its customer base in Japan to more than 400,000 shoppers.
The expansion couldn’t stop the stock falling from 6.3% over the next day to $13.2.
Amazon cuts its losses (and staff)Amazon’s losses continue to reduce as its first quarter figures show staff cuts have taken hold.
The company had already warned investors that it would be cutting 15% of its workforce and the restructuring as well as a 22% annual increase in net sales to $700 million, helped it reduce its losses per share for the fifth consecutive quarter.
Amazon’s operating loss for the first quarter of 2001 was $49 million or 0.21 per share, which compared with a loss of $0.35 per share a year before.
Warren Jenson, Amazon.com's chief financial officer, was pleased with the figures. He said:
We are on track to reach our objective of operating profitability in the coming December quarter.
This was reflected in the share price, which rose by 7.6% by the end of the months to $16.8.
Unsplash / Micheile Henderson
Amazon UK workforce complaints about conditionsUK staff working at one of Amazon’s depots in the UK complain about wages and conditions.
Employees told The Guardian newspaper that supervisors known as "leads" and managers continually clock-watched staff. One employee claimed that they shout at those who fail to meet demanding targets.
Union organiser Peter Lockhart said:
Behind the shiny facade of Amazon and the internet are poor pay, poor conditions, poor communications and poor management. It is anything but 'new age' inside that distribution centre.
Amazon, which opposed unions in its workplace and had also laid off 850 employees in Seattle after a unionization drive, denied the UK allegations.
But this didn’t stop the stock taking a 4.6% tumble to $14 by the time markets reopened on April 16.
Amazon gets marketplace boostAmazon Marketplace sales triple in first four months of operation.
The company quietly launched Amazon Marketplace in November 2000, letting customers buy and sell used and new items directly from the retailer’s website to its 30 million customers.
A quarter of a million unique Amazon.com customers have already made at least one purchase from Amazon Marketplace, and in some product categories Amazon Marketplace inventory turns as often as every 15 days, the company said.
Jeff Bezos, founder of Amazon, said:
There’s always been a huge desire among customers to buy used, rare and collectible merchandise, and we're only beginning to understand how Amazon Marketplace can channel that demand to benefit customers, manufacturers, publishers, artists and the industry as a whole. We're confident that this model will continue to evolve, and believe it has the potential to drive meaningful category growth over the long term.
The boost doesn’t do much for the stock and it remains at around $10.
Court lifts Amazon patent injunctionAn injunction stopping Amazon rival Barnes & Noble using its 1-Click patent is lifted in preparation for a trial in September 2001.
The United States Court of Appeals for the Federal Circuit vacated the preliminary injunction that stopped Barnesandnoble.com from using its 1-Click patent which let repeat shoppers purchase items faster by remembering their payment details.
Amazon said the court made clear that the decision "in no way resolves the ultimate question of validity," and the company remaned confident that its 1-Click patent was valid.
It came after Amazon unveiled a software downloads store just in time for the tax season.
In the old days, people would purchase software on floppy disks or CD-roms to install programs. Amazon helped do away with that by letting users download programs such as anti-virus or tax software directly onto their computer.
It was the latest new feature after Amazon also launched a new honor system that let users make voluntary payments to help fund other websites and access premium content through the retailer.
The stock rose 5.1% to $14.5 over the next just after the judgement but fell over the next few days to $12.
Profit promisesAmazon’s fourth quarter 2000 and full-year results are a mixed bag as it sets out an ambitious target to reach an operating profit in the US for the first time by the end of 2001 but also reveals staff cuts and closures of distribution centers.
Investors had got used to two key themes in Amazon’s company results. Net sales increased but losses remain. The latest update was different though as chief executive Jeff Bezos struck a positive tone, predicting the stock was set to become profitable in the fourth quarter of 2001. Bezos told CNN’s Moneyline:
We have for five years now declined to predict when Amazon.com might be profitable ... and we are finally answering that question.
This would come with victims though as Amazon admitted some of the profit would be generated by cutting 15% of its workforce or 1,300 jobs, and closing its distribution center in Georgia and its customer service operations in Seattle. Investors were told to expect a charge in excess of $150 million in the first half of 2001 to cover the cuts.
This soured news of almost $1 billion, or $972 million, of sales alone in the fourth quarter of 2000, while revenue was up 68% for the full year at $2.76 billion. Amazon still posted an operating loss for the fourth quarter of $0.25 per share for the fourth quarter.
The loss was a penny better than analyst expectations but the quarterly sales figures were below predictions of $994.1 million. Shares crashed in the days following the results update, declining by 28% to $14.3 by February 2.
Amazon launches e-books storeReaders can now buy e-books as well as real ones on Amazon.com.
Amazon opened a new electronic book store that featured never before seen content along with exclusive electronic book titles in Microsoft Reader format and downloadable digital audio titles from Audible.
Lyn Blake, Amazon.com Books general manager, said:
E-books are already opening up a whole new world for readers. What's exciting for readers is that we are just scratching the surface today with the technology and the content, and the potential for both is amazing.
It came just days after Amazon launched a new gifts store in time for the holiday season until November 22 where customers could get free shipping on orders over $100.
The news made little difference to the markets and the stock remained around $29.
Wikimedia Commons / Honza chodec
Amazon goes JapaneseAmazon launches a Japanese-language site at Amazon.co.jp.
It becomes Amazon’s first Asian-language site and marks its entry into the Far East and fourth international market after the UK, Germany and France.
Japan was already Amazon.com's largest export market, with 193,000 customers and annualized sales of US$34 million.
Amazon's operations in Japan included offices in Tokyo, a distribution center in Ichikawa, Chiba prefecture, and a customer service center in Sapporo, Hokkaido.
This gave the stock a 2% boost to $37.3.
Amazon enjoys its electric avenuesElectronics sales overtake music as Amazon’s second best-seller as net sales grow 79% annually across the website in the third quarter of 2000 to $638 million.
Amazon only launched its electronics store in July 1999 and just over a year later it had overtaken music as the second largest segment on sale, behind books. In September, six of the top 10 best-selling items on Amazon.com were from electronics.
Amazon.com's U.S. books, music and video segment remained in profit for the quarter, at $25 million, or 6% of sales.
It was another quarter of big spending though as Amazon launched in France, opened a computer and video games store as well as a car buying service.
The company ended the quarter with an operating loss of $68 million or 11% of sales, which was an improvement on the $79 million loss a year before. Its loss equated to $0.25 per share. This still beat analyst expectations, with predictions of a loss of $0.33 per share. The markets reacted well, sending the stock up 7.7% to $31.8 by the close of the next day.
Unsplash / Erick Cerritos
2 million European customersAmazon becomes the first European e-commerce site to reach 2 million customers.
The company’ European customer base in the UK and Germany had doubled over the previous eight months. Amazon.co.uk ranked number one in Europe as the most visited shopping site, followed by Amazon.com and Amazon.de (Germany). It had launched in France a month before.
Amazon.co.uk recorded an average growth of more than 125,000 new customers each month this year, the company said.
It came as the company boosted its range with the launch of a computer and video game store on Amazon.com.
The stock closed up 6.8% by the next day’s close to $41.4.
Amazon launches strategic alliance with ToysrusAmazon partners with Toysrus to launch a dedicated toy store.
The two companies entered into 10-year agreement, under Toysrus would identify, buy and manage inventory and Amazon.com would handle site development, order fulfillment, and customer service.
This would help Toysrus expand its online presence and give Amazon a new product line
Amazon would be compensated through a combination of periodic fixed payments, per unit payments and single-digit percentage of revenue from Toysrus.
Analysts suggested both companies were showing their weaknesses in the deal. Toysrus was highlighting its online sales struggles and Amazon was showing it needed help to compete in the toys market.
The deal gave the stock a 9% boost though and it rose to $33.6 the next day.
Amazon books, music and DVDs make a profitElectronics becomes Amazon’s fastest growing store as the online retailer sees sales grow 84% annually across the business to $578million during the second quarter of 2000. Some of its stores finally make a profit as well.
Amazon marked its five-year anniversary this month with over 23 million cumulative customers and a boom in net sales. Its presence in Europe was also reaping rewards. Amazon.co.uk and Amazon.de sales were $73 million, up 134% from $31 million for the second quarter of 1999. The two sites added more than 500,000 new customer accounts in the second quarter of 2000, bringing their total customer accounts to more than 3 million, up from about 800,000 as of June 30, 1999.
This helped Amazon.com's U.S. books, music and video segment gain an operating profit for the first time during the second quarter at $10 million.
The company was still outspending itself though, with the launch of a new kitchen and home living store in the quarter. Operating loss for the second quarter of 2000 was $89 million, or 15% of sales, compared with an operating loss of $67 million, or 21% of sales a year before.
Chief executive Jeff Bezos also said he expected operating losses to continue for the rest of the year but to be in single digit figures by the fourth quarter.
This wasn’t enough to satisfy investors though and the stock fell by 13% at the close of trading on July 27.
Amazon president resigns after only a yearAmazon chief operating officer Joseph Galli resigns just a year after taking on the roll.
Galli had been recruited in June 1999 as chief operating officer and president from Black & Decker, which he had helped become a market leader in the DIY space.
But just a year later, he left for what were described as personal reasons. Amazon founder Jeff Bezos resumed the duties of president.
The shock news pushed the stock down 4.2% by the next day to $36.
Analysts weren’t too concerned though.
Kevin Silverman, a financial analyst at ABN AMRO, said:
Ultimately the value of Amazon goes beyond any individual, with the exception of maybe Bezos.
Delivery historyAmazon makes delivery history as 250,000 copies of Harry Potter and the Goblet of Fire are delivered to fans who pre-ordered to receive them on the day of release on July 8.
This unprecedented delivery included 100 regularly scheduled FedEx flights, 9,000 FedEx delivery personnel and vehicles from 700 stations mobilized from Amazon.com’s US distribution centers.
Lyn Blake, general manager of Amazon.com Books, said:
Not since Santa Claus, the elves and the reindeer has one delivery made this many kids happy. It's been an exciting experience for our whole staff to play such an integral role in this major event.
Investors don’t seem to be Harry Potter fans though and the stock fell 5.4% by the next day’s close to $33.1.
Flickr / Luc Verkuringen
Amazon adds audible to bookstoreAmazon makes more than 22,000 hours of spoken audio content from Audible available on its Books store.
Amazon had taken a 5% stake in Audible earlier in the year and now was pushing products directly.
Customers could listen to audiobooks and newspaper and magazine audio as well as lectures and language lessons all by purchasing and downloading them from Amazon.
The markets weren’t listening though and the stock remained flat though at around $50.
Amazon hits 20 million customersMore than 20 million people are now signed up to Amazon as revenues grow 95% annually in the first quarter of 2000.
Amazon.com announced that cumulative customer accounts increased by 3.1 million during the first quarter to 20 million.
People keep on coming back as well, with repeat customers representing 76% of orders in the first quarter of 2000, up from 66% in the first quarter of 1999.
A new lawn and patio and health and beauty store during the first quarter helped push net sales up in the first three months of the year to $574 million compared with $294 million a year before.
Losses continued to grow though, hitting $122 million, or $0.35 per share, compared with a net loss of $36 million, or $0.12 per share, in the first quarter of 1999.
The markets remained bullish on the stock, pushing it up 14% by the end of the month.
Amazon hits The HagueAmazon opens a new customer service center in The Hague in The Netherlands, with a ceremony officiated by Dutch State Secretary for Economic Affairs Gerrit Ybema and Amazon.com's Senior Vice President International, Diego Piacentini.
The company said 125 customer service representatives would work at the 103,000 sq ft center to support its European customers, its seventh such office. Other centers were in Seattle; Tacoma, Washington; Slough, England; Regensburg, Germany; Grand Forks, North Dakota, and, opening soon in Huntington, West Virginia.
The stock rose 1.2% off the back of the news to $67 by the next day.
Record quarterly growthAmazon registers its fastest-ever quarterly growth as a public company, with net sales rising 90% for the fourth quarter of 1999.
Strong sales in Amazon’s new consumer electronics store helped push sales up 16% annually for the fourth quarter of 1999 to $676 million.
Net sales for all of 1999 were $1.64 billion, a 169% annual increase.
The number of customer accounts reached 17 million during the year and the company worked round the clock to get orders out, especially during the holiday season.
Jeff Bezos, founder of Amazon, said:
We did a good job delivering for customers this holiday. The last order, just under the wire, was placed by a customer at 8:05 p.m. on December 23, left our dock at 1:05 a.m. on December 24, and was delivered to the customer in Honolulu at 3:55 p.m. on December 24. It was a Deluxe Scrabble set.
The company also experienced peak shipping of approximately $16 million in one day during the fourth quarter, more than total company sales in the entire year of 1996.
Running Amazon was still proving to be an expensive business, with the costs of expanding into Europe and adding new products such as electronics and music as well as an auction partnership with Sotheby’s increasing its losses.
The company posted a net loss of $185 million, or $0.55 per share during the fourth quarter of 1999. Its net loss for 1999 was $390 million, or $1.19 per share, compared with a loss of $74 million in 1998 or $0.25 per share.
The stock was already rising in the run-up to the results announcement and it soared 21% in a day by the close of February 3 at $84.1.
Unsplash / Ray Hennessy
Amazon opens new customer services centerAmazon unveils plans to boost its presence on east coast of the USA with the opening of a customer service center in Huntington, West Virginia.
The company had already seen record demand over the holiday season and as customer number grew, that meant more staff were needed to help with pre and post-sales issues across different time zones in the US.
The Huntington customer service center was expected to be fully operational in April.
It took the number of customer service centers to seven, including Seattle, Tacoma, Slough in England, Regensburg in Germany, Grand Forks and The Hague, Netherlands.
The stock fell 2.5% by the next day’s close to $64.2 as the markets didn’t seem too bothered about more customer service and the stock began getting caught up in concerns about technology company valuations.
Unsplash / Alexander Andrews
Free Software Foundation proposes Amazon boycottShoppers and book authors and publishers are urged to boycott Amazon over its legal action to stop use of its 1-Click patent.
Amazon had launched legal action against its rival Barnes & Noble for using similar software to its 1-Click technology that allowed browsers to remember a customer’s details when they paid for an item.
The Free Software Foundation called for a boycott of Amazon in response. It said:
The idea in question is that a company can give you something which you can subsequently show them to identify yourself for credit. This is nothing new: a physical credit card does the same job, after all. But the US Patent Office issues patents on obvious and well-known ideas every day. Sometimes the result is a disaster. We can hope that the court will find this patent is legally invalid. Whether they do so will depend on detailed facts and obscure technicalities. The patent uses piles of semirelevent detail to make this "invention" look like something subtle. But we do not have to wait passively for the court to decide the freedom of e-commerce. There is something we can do right now: we can refuse to do business with Amazon. Please do not buy anything from Amazon until they promise to stop using this patent to threaten or restrict other web sites.
This made investors nervous and the stock fell 7.7% over the next day to $90 and hit $81 on December 27 – when it was given a bounce to $82 after TIME magazine named Amazon founder Jeff Bezos as its person of the year. It cited the way he was using the internet to change the way the world shops.
Amazon offers mobile internet shoppingAmazon becomes the first company to offer internet shopping from a mobile phone.
Imagine shopping from your phone while on the move rather than slumped in front of a computer? Amazon was working to make this a reality. It partnered with wireless network Sprint to make its Amazon Anywhere application available on its PCS phones. This was the first time mobile shopping was made available.
By using any internet-ready Sprint PCS Phone, Amazon customers could shop online by selecting Amazon.com from the phone's MiniBrowser menu to browse music, DVDs, videos, books, toys, video games, software, home-improvement items, and consumer electronics.
The technological development excited investors and the stock rose 17.3% by the close of the next day at $103.6.
Amazon targets the luxury marketAmazon takes a minority investment in luxury internet retailer Ashford.com to offer customers access to its selection of diamonds, watches and designer jewelry.
Amazon made an equity investment of $10 million in Ashford.com for 16.6% of its stock. The companies agreed a strategic relationship that meant Ashford.com would offer Amazon’s customers a wide selection of its luxury products through December 31, 2000. Its range included brands such as TAG Heuer, Omega, and Montblanc.
The stock got a premium 4.7% boost off the back of the deal to close the next day at $89.
A federal judge also granted a preliminary injunction protecting Amazon’s patented 1-Click technology on December 2 and barring online competitors from copying it.
Amazon had already taken legal action against barnesandnoble.com for allegedly copying its 1-Click technology to let repeat customers complete purchases without re-entering their details each time. US District Court Judge Marsha J. Pechman granted a preliminary injunction that barred barnesandnoble.com from using its version while the lawsuit was pending.
Investors got nervous though, and the stock fell 2.8% between December 2 and December 3 to close to $86.5.
Amazon launches four new storesAmazon builds on its ambition to be a one-stop online shopping destination with the launch of four new stores, and uses an acquisition to expand its customer services offering.
The company unveiled a home improvement, software, video games and gift ideas category.
Shoppers could now buy drills, Microsoft Office software and video console games online at any time of day or night. The company also announced that it had acquired Tool Crib of the North, a tools and equipment catalog company. It used the acquisition to expand Tool Crib of the North’s customer service center in Grand Forks, Dakota with 150 new employees. This would help it meet rising customer demand across Amazon.com.
The new stores expanded the online retailer’s range in time for the holiday season and the stock rose 1.6% to $72 between November 9 and November 10 and rose to $74.9 by November 12, the day after it announced its customer service expansion.
Amazon settles cooperative litigationAnother day, another lawsuit. This time Amazon resolved its issues though, as it settles a legal dispute with a feminist bookstore in Minneapolis over the use of its name.
A lawsuit over the use of the Amazon name was filed by Amazon Bookstore Cooperative against Amazon.com on April 7 and was due for trial the following year. The cooperative had been around since the 1970s and accused Amazon.com of trademark infringement.
An out-of-court settlement was agreed. Under the terms of the settlement, Amazon Bookstore assigned its common law rights in the Amazon name to Amazon.com and Amazon.com licensed its name back to the book store.
The markets like a happy ending, and Amazon stock rose 3% to $64.9 by the next day’s close.
Amazon patents 1-click serviceAmazon aims to make it easier for shoppers to make purchases as the holiday season approaches. It's awarded a patent for its 1-Click service, letting shoppers buy an item without entering their shipping and billing information every time.
The 1-Click service had been launched in September 1997 but Amazon wanted to keep it to itself, so got it patented. The service stored billing and shipping information so that each customer only needed one click of the mouse to buy a selected item, rather than entering the same information over and over again for each purchase. It also aimed to make shopping easier by adding a gift click and wish list option so friends and family could share what they really wanted during the holiday season. No more socks.
This didn’t click with the markets though, and the stock fell 6.4% over the next day to $79.9.
Amazon also revealed plans to open a second US-based customer-service center on October 15 in Tacoma, Washington state. But this didn’t make much difference to the share price.
Amazon unveils first appAmazon acquires software company Convergence Corporation as it launches a new application to let shoppers access its website when away from their computers.
Why should you only be able to shop while at your desktop? Amazon wanted shoppers to access its products anywhere. It spent around $20 million to acquire software company Convergence Corporation, which helped build the Amazon Anywhere app. This let shoppers access Amazon.com on newly released handheld devices such as Palm Computing’s Palm VII organizer. Amazon also signed deals to feature on devices being developed by Motorola and AvantGo.
Jeff Bezos said:
By untying customers from their desktops, we're empowering them to get things done and off their to-do lists--not just at anytime--but from anywhere.
The new technology gave the stock a small boost and it rose 1.8% to $78.4 by the next day’s close.
Amazon hits back at cybersquatterAmazon takes legal action against a cybersquatter just as it is rated the best online video and music store.
The company had gone to great efforts to build its music and video company. It was ranked by analysts Gomez Advisors as the number one video and music marketplace just two days after MSNBC recognized Amazon.com as the best online toy store.
Amazon didn’t want others taking the credit for its work. It had discovered a cybersquatter in Greece who used the Amazon.gr web address to sell books. It even described itself as “Greece’s Biggest Bookstore,” taking on Amazon’s tagline. The issue escalated when the man behind the website tried to get Amazon to pay him $1 million to buy the domain.
Bill Curry, spokesman for Amazon.com, said:
What makes e-commerce work for our more than 10.7 million customers around the globe is that it truly is a World Wide Web. We're open around the clock and around the globe, offering millions of books and other products at great prices. We take it seriously when someone engages in unfair business practices and tries to pass himself off as connected to Amazon.com, because consumers around the globe have come to trust our name and the service we provide. With this lawsuit, we're putting other Amazon.com copycats and cybersquatters on notice: You can run, but you can't hide.
Investors didn’t seem keen on a legal fight and the stock fell 7% by the next day’s close to $105.1
10 million customers sign up to AmazonNet sales rise by 132% annually to $356 million as expansion into new products takes the Amazon customer base to 13.1 million.
Amazon added a dedicated toy shop and electronics to its ever-expanding range during the third quarter of 1999. It also launched zShops, which allowed other retailers to sell their goods alongside Amazon. Analysts predicted this could help drive revenues.
Jeff Bezos, chief executive of Amazon, described the website as:
The one-stop holiday shopping destination.
The company posted an operating loss of $76 million, deeper than the $21million posted a year before, which seemed to worry the markets as the stock fell 6.8% by the close of the next day to $71.
Net sales jump 171%The 10 million customer milestone helps Amazon to post net sales growth of 171% annually to $314.4 million.
It was a busy quarter for Amazon after it launched into selling toys and games and entered a 10-year alliance with Sothebys to let sellers auction items through its website. The deal helped increase customer accounts by 2.3 million to 10. 7 million. There was also another two-for-one stock split.
These new developments meant the company posted an operating loss for the second-quarter of $67.3 million, or 21% of net sales. This was deeper into the red than the $12.8 million loss, equivalent to 11% of sales, posted a year before.
The performance matched analyst expectations but investors weren’t so sure, and the stock declined 14.8% by the close of trading on July 22 at $106.8.
Amazon backs another stock splitAmazon announces another stock split and appoints Joseph Galli to its board.
Galli had been named president and chief operating officer at Amazon only weeks ago and already found himself appointed to the board. His appointment coincided with plans for a 2-for-1 stock split. Amazon said shareholders would receive one additional share for every share held on the record date of August 12, 1999. This would take place on September 2 1999.
Investors didn’t seem keen on the share price being cut and the stock fell 14.8% to $106.8, which incidentally also put the share price lower.
Unsplash / Cedrik Wesche
Amazon launches two new storesFancy some electronics or toys with your books, CDs and DVDs? Amazon opens two new stores.
Amazon’s latest categories included cut-price electronics such as camcorders and TVs and toys and games.
Jeff Bezos, Amazon founder, said:
With this launch, our goal is to give customers the Amazon.com experience - everything from 1-Click shopping and helpful information to the high level of customer service we traditionally provide - in the two important categories of toys and electronics.
Investors got excited by new products and Amazon’s stock rose 7% over the next day to $135.
Amazon names new president and chief operating officerJoseph Galli joins Amazon as its president and chief operating officer, moving from Black & Decker.
Galli brought almost two decades of experience at Black & Decker where he led a resurgence in the power tools business, making it a market leader. Could he drill home Amazon’s online sales message?
Investors weren’t DIY fans and the stock fell 3.1% to $110 by the next day’s close.
Amazon shops with Sotheby’sSotheby’s becomes Amazon’s latest partner as the brands team up to launch a join online auction site.
The companies agreed a 10-year alliance to run sothebys.amazon.com. Sellers on the joint auction site would have the opportunity to market to Amazon.com's more than 10 million customers with the benefit of Sotheby's 255-year art and auction expertise. It would feature coins, stamps, sports and Hollywood memorabilia, fashion, animation art, toys, dolls and other collectibles, as well as general art and antiques, books and jewelry.
The partnership gave the stock a nudge up to $112.9 from $111.7 the previous day.
From zero to 10 millionAmazon reaches 10 million customers, not bad for a company that Jeff Bezos started in his garage.
Fewer than four years after opening on the internet, Amazon served its 10 millionth customer. This was a milestone for online sales and suggested that this crazy internet idea may well catch on.
In honor of all Amazon.com customers, founder Jeff Bezos said he would personally deliver goods bought by the honorary 10 millionth Amazonian. The personalized delivery reflected the company’s roots in 1995, when Bezos would take each day's orders to the post office for delivery to customers. The company had already become the first internet retailer to serve 1 million customers in October 1997 and its cumulative customer base had grown tenfold in 21 months, reaching the equivalent population of Greece. This failed to excite the markets though, and the stock fell 4.9% to $111.6 by the next day’s close.
The stock did get a boost after June 8 when Amazon added a new distribution center to boost its presence in the Southeastern United States and added free MP3s downloads to its online music store.
The company unveiled plans for a fifth distribution center, this time in Georgia, that would employ more than 500 people. The 800,000 sq ft facility was its largest and took its total floor space across all its warehouses to more than 3.5 million sq ft.
Amazon also unveiled a new music area offering free digital downloads of selected songs.
These developments helped the stock rise 2.1% by the next day to $115.9 but it later dropped to $94 by June 14.
Amazon adds more distribution centersAmazon adds more distribution centers to boost delivery times in Midwestern US.
The company announced it had obtained two distribution facilitates located in Kentucky: one in Campbellsville and the other in Lexington. The 570,000-sq-ft Campbellsville facility would be expanded to approximately 770,000 sq ft, while the Lexington facility had a capacity of 600,000 sq ft.
Amazon said it expected to employ 500 people in Campbellsville and 200 in Lexington, a figure expected to double within two years. The new centers and job creation gave the stock an 8.3% boost to $120.9 over the next day.
Amazon announces new investmentAmazon is hungry for more acquisitions as it snaps up a minority interest in grocery shopping and home delivery website HomeGrocer.com.
Amazon took a minority 35% stake in HomeGrocer.com after making a $42.5 million investment.
This would help HomeGrocer with a national rollout beyond its existing markets in Seattle, Washington and Portland, Oregon. HomeGrocer.com was established in March 1998 and offered more than 11,000 grocery items to meet weekly shopping needs.
The deal gave investors food for thought and the stock rose 5% to $139.6 by the next day’s close.
Amazon opens third distribution centerAmazon opens a third distribution center to speed up deliveries in the Midwest and south east United States.
A new 460,000 sq ft facility was opened in Coffeyville, Kansas and Amazon said it would be expanded to more than 750,000 sq ft. That’s a lot of books and CDs. Customers in places such as Chicago, St. Louis, Dallas, and Minneapolis would receive their orders much faster. Amazon expected to employ 500 people at the facility.
This couldn’t stop the stock falling 5.8% to $164.
Amazon settles Walmart disputeAmazon settles with Walmart amid an intellectual property dispute.
Walmart had grown concerned about Amazon poaching its staff so filed a lawsuit in October 1998 alleging that its former employees who had joined the website and Drugstore.com, including chief investment officer Richard Dalzell, took distribution, warehousing and merchandising technology with them.
Amazon.com and Drugstore agreed to reassign some former Walmart associates and vendors to tasks different than their jobs at Walmart. Any property still in the possession of any former Walmart associates or vendors was also required. No damages were paid by any party.
BancBoston Robertson Stephens analyst Lauren Cooks Levitan described Amazon as a gnat compared to Walmart.
She said Walmart was “recognizing the potential large business that Amazon will represent."
The settlement pushed the stock down 1.9% to $182.9 by the end of the next day.
Amazon invests in Pets.comAmazon gets all cuddly as it puts money into Pets.com. It's a busy few weeks for deals as Amazon also takes a “significant minority stake” in newly opened Drugstore.com giving it access to the health and pharmacy market.
The company agreed to obtain an ownership stake of approximately 50% in Pets.com, the largest pet company on the Internet. The pet market was estimated to be worth $23 billion in the US.
The financing would be used to fund Pets.com's growth, further develop the Pets.com brand, expand e-commerce and advertising revenue streams, and build distribution through partnerships and alliances. Amazon founder Jeff Bezos said:
We invest only in companies that share our passion for customers. Pets.com has a leading market position, and its proven management team is dedicated to a great customer experience, whether it's making a product like a ferret hammock easy to find, or help in locating a pet-friendly hotel.
Investors were clearly pet lovers and the stock rose 10% by the close of the next day to $164.7.
It also entered eBay territory at the end of the month with the launch of Amazon Auctions store on March 30. Sellers would automatically have their auctions cross-merchandized across Amazon.com's millions of book, CD, and video product pages.
The move pushed the stock up 4.5% by the next day’s close to $172.2.
Amazon unveils new notes offeringAmazon looks to raise $1.25 billion with a private offering of subordinated convertible debentures.
The latest notes offering, which would mature in 2009, was convertible into the company's common stock, at the option of the holder, at a conversion price of $156.05 per share, representing a conversion premium of 27% over the closing price.
The markets weren’t so sure about more fundraising and the stock fell 4.8% by the next day’s close to $116.9.
Amazon hits $1 billion of salesAmazon achieves $1 billion of annualized sales just three and a half years after opening.
The company’s fourth quarter and annual results highlighted a year of milestones, particularly over the holiday period running from November 17 to December 31. During this period, more than 1 million new customers shopped with Amazon.com for the first time, it shipped more than 7.5 million items and the company experienced peak shipping of more than $6 million in one day.
All this activity helped grow net sales by 283% annually over the fourth quarter of 1998 to $252.9 million. Based on fourth quarter sales, Amazon.com said it had achieved a $1 billion annualized sales level.
It still posted an operating loss over the fourth quarter of $17.8 million and was $74.4 million for the year. But with a total customer base of 6.2 million, investors remained positive and the stock rose 9.1% between the close on January 26 and the next day to hit $125.6.
Unsplash / Sharon McCutcheon
Amazon opens new distribution centerAmazon looks to cut delivery times by opening a third distribution center in the US.
The company chose Nevada as its third warehouse site. It said it would reduce shipping times in the west of the US by a full day. The 322,560-square-foot facility would also allow Amazon.com to significantly increase the number of books, CDs, and videos kept on hand for immediate shipment to customers.
Amazon said more than 300 people would be employed at the site by the end of the year. It came just days after Amazon had reported that sales in the fourth quarter of 1998 were approximately $250 million, which was three and a half times the 1997 fourth-quarter level of $66 million. The stock had dropped at the start of the month from $355 on January 4 to $124.6 after the three-for-one stock split. The results and new distribution centers helped the share price rise to $184 by January 8.
Amazon enters the video marketAmazon opens a video store just in time for the holiday season and unveils a 3-for-1 stock split.
Video became Amazon’s third line after books and music. Its store offered 60,000 theatrical and general-interest videos and more than 2,000 DVDs, all accompanied by Amazon.com's search features and editorial content, with prices at prices up to 30% off.
The stock had been rising throughout the year. Amazon addressed this by announcing a three-for-one split of its common stock. Stockholders would receive two additional shares for every share held on the record date of December 18 1998. A stock split would lower the value of shares but ensured shareholders have the same holding. This excited the markets as investors were excited at the prospect of extra shares and cheaper ones that they could buy after the split.
The stock rose 17.4% by the close of November 20 to $180.
Music to investors' earsAmazon becomes the largest online music retailer in the world as its new division boosts the company’s third quarter results.
Another string was successfully added to Amazon’s bow as it revealed the results of its first full quarter of music sales. It launched music sales alongside its books in June and reported sales of $14.4 million over the quarter.
Net sales across the business were $153.7 million, an annual increase of 306%. It posted an operating loss of $21million as it was an expensive period having launched its music business and officially opening its online presence in the UK and Germany. The figures look better though when you consider that the loss was 14% of net sales compared with 27% a year earlier. Customer accounts also hit 4.5 million.
The positive results helped the stock climb 8% by the close of the next day at $126.5.
Unsplash / Icons8 Team
Amazon enters European book marketAmazon unveils dedicated websites in the UK and Germany.
The company had already conquered America and made UK and Germany its next targets. Amazon.de and Amazon.co.uk opened their virtual doors on October, which the company said would help reduce shipping costs from the US.
Amazon.de was headquartered in and had a distribution center in Regensburg and editorial and marketing offices in Munich. Amazon.co.uk was headquartered in and had a distribution center in Slough, England offering 1.2 million titles.
Jeff Bezos, chief executive of Amazon said:
These are stores that are open around the clock where people can find the specific books they want and discover others they may also like to buy. It combines the power of the Internet with a very personalized experience.
Investors liked the sound of going global and the stock rose 2.4% by the next day’s close to $99.4.
3m customers and countingCustomers continue to flock online, helping net sales grow 316% annually to $116 million.
More than 3 million customers now had accounts with Amazon, up an impressive 415% annually. Repeat customers made up more than 63% of orders, so people keep on coming back. The company still ended the second quarter of 1998 with an operating loss of $11.6 million, or 10% of net sales, compared with an operating loss of $7.1 million, or 25% of net sales, in the prior year. It followed a busy quarter of expansion, with Amazon launching a music store offering 125,000 titles and attracting Jimmy Wright from retail giant Walmart to become vice president and chief logistics officer. It also had to cover the costs of its two-for-one stock split which completed during the quarter.
This wasn’t enough to reverse a decline in the share price and it fell 14.1% over the next week to a close of $107.8 on July 29.
Amazon passes 60,000 associatesEnrollment in Amazon’s associates program passes the 60,000 mark and Amazon opens a new music store – its second product line.
The company revealed that the number of websites referring users to its titles had doubled in the past four months to more than 60,000 members. The program paid websites referral fees of up to 15 percent of the sales they generate.
David Risher, Amazon.com's senior vice president, said:
This is a win-win situation. Amazon.com's associates network has doubled in less than four months because it enables participants to enhance the value of their websites by working with the leading online bookseller.
The company had successfully cornered the market for online books and set its sights on music next. It unveiled a new online music store on Amazon.com, which offered more than 125,000 music titles - 10 times the number the average music store offers - at everyday savings of up to 40%, including 30% savings on the 100 bestselling Amazon.com CDs.
The stock rose 15.5% from the previous day to $62.5 in the run up to the launch.
Lower losses and Amazon goes shoppingLosses plateau at Amazon as net losses for the first quarter of 1998 hit $9.26 million, or $0.40 per share. This compares with a net loss in the fourth quarter of 1997 of $9.33 million, or $0.41 per share. The figure is still deeper into the red than the $3.04 million loss reported a year ago.
Sales and customer accounts continued to rise in the first three months of 1998. Net sales rose 32% on a quarterly basis to $87.4 milliion. Amazon also hit another customer landmark as it surpassed 2 million customers or 2.26 million to be exact.
Chief executive Jeff Bezos proudly proclaimed that it took 27 months to get to its first million customers and fewer than six months for the second.
A two-for-one stock split was announced alongside the results, making it cheaper for new investors to buy Amazon shares and benefit from its growth. It would take effect on June 1.
Amazon also announced three acquisitions totalling around $55 million to excite investors. It bought UK online retailer Bookpages and Germany’s Telebook to help enter the European marketplace and also snapped up the Internet Movie Database to support an eventual entry into video sales.
It took a while for the markets to digest the news. The stock remained flat until two days later when it rose 4% on the previous close to $59.5.
Amazon unveils discount notes to clear debtsAmazon unveils a $275 million offering of senior discount notes.
This is followed up by a 2-for-1 stock split. The company wanted to clear debts so went to the markets with an offering of $275 million senior discount notes that would mature in 2008.
Interest on the notes would be paid semi-annually in cash beginning in 2003. Amazon said the proceeds from the offering will be used to retire approximately $75 million of existing indebtedness and for general corporate purposes.
Amazon’s board also approved a stock split that reduces its share price and goes on its own shopping spree. The Amazon board approved a 2-for-1 stock split of its common shares. It gave shareholders one additional share for every share held on the record date of May 20 1998. The split came just under a year since Amazon first went public.
It expanded its international presence by acquiring UK online bookstore Bookpages and Germany’s Telebook. Amazon also set itself up for an entry into video sales by purchasing the Internet Movie Database. The company said it would incur total charges of approximately $55 million in connection with all three transactions.
The markets liked the sound of these deals and the stock split, which all helped push its share price up 15% by the next day’s close to $95.6.
Amazon backs smaller publishersSmaller publishers are given a boost as Amazon.com Advantage is launched.
It can be hard being a small book publisher as you don’t have the big marketing budget or distribution channels of larger rivals. Amazon.com Advantage was a free program that aimed to address this by letting independent publishers place a limited quantity of books in its distribution centers for immediate availability to customers.
Amazon also scanned the book cover, at no cost to the publisher, for inclusion on the title's detail page and helped member publishers add persuasive information such as descriptions, excerpts, tables of contents, and author and publisher comments to the page.
This support gave the stock a 5.9% boost to close at $77 by the next day.
Festive boost for Amazon’s resultsChief executive Jeff Bezos insists the internet is really taking off as increasing numbers of shoppers buy books for gifts online, pushing Amazon’s net sales up 74% during the fourth quarter to $66 million. Annual net sales also rise, up 838% during 1997 to $15.7million.
Amazon ended the year with 1.5 million customers, up 739% annually, underlining just how popular online book sales were becoming. It was also holding customers, with more than 58% of orders placed during the fourth quarter of 1997 coming from repeat users. Continued investment in the business, such as expanding its fulfilment centers and setting up an online gift center to recommend presents meant the company still ended its financial year with a net loss of $27.6 million, or $1.27 per share, compared with a net loss in fiscal 1996 of $5.8 million, or $0.31 per share.
Bezos remained optimistic though. He said:
We intend to continue to invest aggressively in building our business and brand, enhancing our product and service offerings, expanding the range of products we offer to our customers and broadening our distribution relationships with the goal of maintaining and continuing to extend our leadership position.
Investors were not as excited though and Amazon’s share price dropped 3.8% by the close of the next trading day to $59.2.
In-creditAmazon completes its $75 million credit facility just in time to ring in the new year.
The three-year facility had been agreed in November, led by Deutsche Morgan Grenfell as underwriters. Joy Covey, chief financial officer, was feeling festive. Covey said:
This fully-funded credit facility provides Amazon.com with substantially increased resources to execute its long-term strategy. The additional $75 million in our possession will enhance the company's flexibility as we pursue our goal of extending our leading position in this competitive market. We intend to invest aggressively in building our business and brand, enhancing and expanding our product and service offerings and broadening our distribution relationships.
Not a bad Christmas present.
The stock climbed 3.7% off the previous day’s close to end the year at $60.2.
Unsplash / NeONBRAND
Distribution doublesAmazon deliveries are set to get faster as it opens its second distribution center.
How do you get books to customers fast without breaking speed limits? The obvious answer is having more distribution centers across the country. Amazon’s original distribution center was in Seattle and it opened its second in New Castle, Delaware, bringing it closer to East Coast customers and publishers. The 200,000 sq ft center was the length of three football fields.
Together with the expansion of its Seattle distribution center, it increased the company's stocking and shipping capacities to nearly six times their previous levels.
It came after Amazon became the premier bookseller for the @Home service, its first internet service provider partnership.
The company had plenty of deals with search engines but now it would be the premier bookseller that @Home Network's users would see on its shopping service, book directories, and search pages.
Exciting chapters aheadAmazon is rapidly approaching its millionth customer as third quarter results show a 54% rise in new accounts since June to 940,000. However, sales growth slows from 74% to 36% over the quarter and losses increase.
The company posted net sales of $27.9 million for the third quarter of 1997. There are two ways of spinning this stat. The figure was up a massive 808% annually but was a slower rate of growth than in the second quarter of 1997. Similarly, Amazon’s net loss increased to $8.5 million. This was a further $6.1 million decline into the red annually but just a $1.8 million difference when compared with its second quarter performance.
Amazon was boosted by plenty of good news during the quarter. In August, Amazon.com moved to No. 29 in rank among all internet sites. No other book retailer appeared among the top 500 sites. Among household users, Amazon.com's reach rose to 4.5% August, up from 3.2% in June.
It wasn’t just its customer base that was growing. Amazon entered into agreements to increase its distribution center capacity to nearly six times the current level, including a new 200,000-square-foot facility in Delaware and a 70% increase in square footage in its Seattle facility. This would help it hold more stock and reduce shipping times.
The markets were excited by this latest chapter and the stock rose 11.1% to $60 by the end of the next day of trading.
Amazon had promised the website’s millionth customer would have their item personally delivered by founder Jeff Bezos and he ended up travelling to Japan in October to give a Microsoft Windows NT instruction booklet and a biography of Princess Diana to an excited shopper.
A landmark monthAmazon reaches 1 million customers in a landmark month that sees it become the exclusive bookseller for search services AltaVista and Netscape Netcenter.
AltaVista attracted approximately 18 million unique users each month, accounting for more than 400 million page-views. Now those users would be pointed toward relevant Amazon webpages for books related to their search results.
Netscape had launched a new commerce section Netscape Marketplace and Amazon.com was given its own online storefront where it could tailor book titles and editorial. It also got its own dedicated button linking the Netscape audience to the Amazon website and its catalog of 2.5 million titles.
Amazon also settled a legal dispute over claims about who is the world’s largest bookstore with rival Barnes & Noble.
Amazon’s tagline was that it was Earth’s biggest bookstore. But rival Barnes & Noble wasn’t impressed and filed a lawsuit just before Amazon’s public listing in May that claimed the tagline was false advertising.
Barnes & Noble had its own stores and launched online in May as well, so had plenty of reason to envy Amazon. But Amazon hit back with a counter-claim that Barnes & Noble should pay taxes in the states where it had stores. It was announced on October 21 that the rivals had settled, with neither admitting liability or paying damages. They simply decided they would rather compete in the marketplace instead of the courtroom.
Bob Chatham, an analyst with Forrester Research, said:
From a business standpoint it was a wise move. It was not doing Internet commerce as a whole any good Amazon has held their own. They took the initial barrage, and they did come out ahead. They didn't cave in to Barnes & Noble's legal manoeuvers.
The stock closed up 16.6% to hit $53.1.
Amazon becomes Prodigy Shopping Network’s exclusive booksellerAmazon gets itself named as exclusive bookseller with yet another search engine, this time appearing on the Prodigy Shopping Network alongside brands such as JC Penney.
Users of the Prodigy Shopping Network search engine could access a database of 20,000 items, which would include a direct link to online bookseller Amazon.
It also launched a new referral scheme, with premium associates getting the chance to earn a 50% bonus on top of the usual fees for selling titles from Amazon.
Those books don’t sell themselves, and Amazon had an extensive network of websites or associates earning referral fees by recommending books. Amazon announced a new incentive where the top 500 referrers would be named premium associates and would be eligible for a 50% bonus on top of the existing referral fee structure.
Second quarter results defy expectationsAmazon delivers its first financial results as a listed company, and they aren’t as bad as expected. Net sales rise 74% during the second quarter of 1997 compared with the first three months of the year to $27.9 million.
More customers were browsing online too, with the number of customer accounts growing by 79% over the quarter to 610,000. The company still saw its net loss double from the previous quarter to $6.7 million though.
Analysts hadn’t woken up with much expectation for a strong performance from Amazon. The consensus was that it would post a loss of 32 cents per share, but the company defied expectations with a loss of 28 cents per share coupled with impressive revenue and customer growth figures. Repeat customers represented more than 50% of orders placed during the quarter.
The company’s performance was boosted by price cuts and new promotional relationships with search engines Yahoo, AOL and Excite to build traffic.
We believe these relationships will reinforce our momentum as the leading online bookseller by generating substantial additional brand awareness and customer flow for Amazon.com,
Amazon chief executive Jeff Bezos said.
The results helped push the stock up 10% during trading to close at $30.75. This was the first time the stock had surpassed $30 since its IPO day.
Amazon gets excited about new search engine dealsAmazon agrees three high profile deals to feature on search engines Yahoo, Excite and AOL. Notably, an advertising deal with the Excite search engine would see its content and book selections used outside its own site for the first time.
Forget just selling books to Amazon.com visitors, the whole world wide web was the aim of this company. Amazon opened the book on a three-year relationship with Excite that would see it offer users links that will take them directly to the related Amazon.com search results page. For example, users browsing the arts and entertainment channel on Excite would also be able to browse a selection of critically acclaimed and best-selling books on the same topic, as well as browse reviews and editorial content about each book.
This was quickly followed with another landmark partnership. Amazon whooped as it partnered with search engine giant Yahoo, which had agreed to offer users direct links to related Amazon.com book titles from every search result and book category page. As the premier Yahoo bookseller, Amazon.com would also receive extensive promotional exposure including banner advertising and relevant keyword placement.
The partnerships gave the stock a 15% boost to close at $27.6 the next day. But that wasn’t the end of the story. A similar three-year deal on July 8 saw the introduction of a button on the AOL.com homepage linking users to books on the Amazon.com site. This was a big deal as AOL was the most visited site on the web and now Amazon could sell to its user base as its exclusive bookseller. This pushed the stock up further to $27.8 by the close of the July 9.
Amazon IPOsAmazon raises $54 million in a landmark initial public offering by an internet retailer. Founder Jeff Bezos describes the fundraise in a letter to shareholders as “Day 1 for the Internet and, if we execute well, for Amazon.com." The letter reads:
Today, online commerce saves customers money and precious time. Tomorrow, through personalisation, online commerce will accelerate the very process of discovery. Amazon.com uses the internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.
That’s not bad for a company launched just two years earlier by Jeff Bezos in his garage. It marketed itself as “Earth’s biggest bookstore” and pioneered selling reading material online, thus saving the effort of browsing shops and being limited by opening times and what was in stock locally.
Amazon entered the NASDAQ with an IPO price of $18 and a market value of $438 million. The stock soared 30% above its opening price on the first day, hitting a high of $30 before settling at $23.5. There was so much demand for the stock that Amazon even increased the number of shares that its underwriters could purchase from 375,000 to 450,000.
Analysts saw the listing as a sign of the popularity of online sales and the success dispelled any doubt over its lack of profit and demand.
Its growth was impressive despite a lack of profit.
Revenues in 1996 had grown by around 2,900% annually to $15.75 million but losses were up from $303,000 to $5.78 million.
There was clear demand for buying books online though. Average daily visits had grown from approximately 2,200 in December 1995 to 80,000 in March 1997, and repeat customers currently accounted for more than 40 percent of orders.
Richard Peterson, an analyst with Securities Data, said there was a lot of expectation for the Amazon stock:
Booksellers are doing quite well, and Amazon.com just might be able to piggyback on that popularity.