Thursday, April 26, 2007

Amazon is becoming a Gorilla

For the last ten years everyone has been putting Amazon down, at first they would be wiped out, then could service their debt, then they weren’t profitable, then were going into areas they didn’t understand.

The reality is that they were the goose that laid the golden egg and many acted as accountants who could not see the golden egg so only saw a goose. Well the goose is starting to lay eggs!

Amazon’s Q1 earnings report from Amazon was better than expected by the market. It raised sales 32% to $3.02 billion, and improved earnings 38% to $145 million, from a year ago. International "media" sales rose 31% to $1 billion and showed a trend that even surpassed their US media sales which rose 21% to $990 million. They are what we have known for ten years – a global brand.

Profits improved and they now envisage fiscal sales of between $13.4 billion and $14 billion.

We must remember that they now straddle the total publishing value chain and the only thing they don’t do today is originate content and publish it.