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AOL gives pre-ICU infusion to Amazon.
July 24, 2001 9:41 AM   Subscribe

AOL gives pre-ICU infusion to Amazon. Jeff, baby. It's over. Your place as an e-commerce pioneer is secure, but face it, selling mass-market atoms on the Web was never going to work.
posted by ParisParamus (16 comments total)

 
That's a fairly bizarre claim to make within a decade of the appearance of the internet in people's homes, don't you think? People have been doing mail order stuff for ages - I don't see why this need be any less long-term. Fact is, people DO buy stuff from Amazon, and they do it pretty regularly.
posted by barbelith at 9:55 AM on July 24, 2001


I'm writing this knowing my grandkids might read this while trying to find information on their late grandfather. Let's hope I don't have to put my foot in my mouth.

Amazon.com isn't going anywhere. They claim they'll be profitable within two quarters, and they beat expectations in a bad market. Not too shabby.
posted by jragon at 9:58 AM on July 24, 2001


I'm just terrified at the prospect of AOL owning a stake in Amazon, if they ever bought out all of Amazon, most people's web experience would be confined to AOL/TW properties.
posted by mathowie at 10:20 AM on July 24, 2001


I don't know, Matt. It may sound cynical, but I bet a lot of users want just that: the "walled garden" experience. The web is big. It's scary. I think your average joe user probably wants the thing domesticated.

Ughh. I just dropped a flame-bait, huh?
posted by preguicoso at 10:25 AM on July 24, 2001


Despite the mention of obtaining certain technology, I think AOL is acting to stave-off (at least temporarily) the .com implosion turning into a contraction which will affect AOL ("if there's nothing left on the Web, why subscribe to AOL"). Please feel free to tell me I'm wrong.
posted by ParisParamus at 10:28 AM on July 24, 2001


Amazon also isn't making any money either. And wise man say, company who no make money eventually fade away, or get eaten by bigger company who do...

This industry analyst quote (Faye Landes, via NYT) says it all:
This is a really big revenue shortfall. Amazon wants to say they have deliberately traded growth for profits, but they didn't. It's as if Wal-Mart opened all of its stores in the first year. Wal-Mart would move into Illinois then Wisconsin and always reach new customers. Everyone who wanted to buy a book online has already heard of
Amazon.


Yeah the internet will grow bigger: but most of the growth isn't going to be with people who have money to burn, they're already there.
posted by DiplomaticImmunity at 10:32 AM on July 24, 2001


I'm just terrified at the prospect of AOL owning a stake in Amazon...

AOL/TW just bought IPC Media, too: so Loaded and NME are now assimilated.
posted by holgate at 11:55 AM on July 24, 2001


Fact is, people DO buy stuff from Amazon, and they do it pretty regularly.

Well, perhaps they do - but not enough stuff - or often enough - to keep Amazon from losing US$168 million in just THE LAST THREE MONTHS. Stop and think about that number a bit... How much longer can this go on? This is Capitalism we're talking about here, kids, so unless Jeff & Co. figure out how to start using black ink instead of red in those account books, they're going the way of all the other (your-name-here).coms.

Amazon.com isn't going anywhere. They claim they'll be profitable within two quarters, and they beat expectations in a bad market. Not too shabby.

Pardon me, but - bullshit. They've been saying "We'll be profitable in two quarters" for the past two years. Ever hear the old saw, "Fool me once, shame on you; fool me twice, shame on me!"? I understand that there are a lot of web professionals who frequent MeFi and who have a personal interest in the success of some kind of profit model that leverages their skills. Hell, I believe there are profit models that will leverage your skills. But you guys aren't doing yourselves any favors by continuing to believe, head-in-sand-style, that there's a golden lining to this Big Cloud of Fear, Uncertainty and Runny Baby Poo that is "internet commerce," late-90's style. Maybe it's time to come to terms with the fact that everybody got it wrong and start firing up your creativity to look at the profit models from some other perspective.
posted by m.polo at 12:59 PM on July 24, 2001


Sure, but nearly 1/3 of that loss is an amortization of good will (whatever the hell that is any accounts around that can explain that). And Half of that amount goes to their costs of Fulfillment. Now, those costs won't go to zero, but I have to believe there's some room in there for increased efficiency.

I don't invest in Amazon. I think that even at $12 the price is a little high right now, but to say they can't ever make money seems a little reactionary to me. There is a business there - although in looking at their financials I was a little surprised to see that Kitchen Goods were responsible for substantial increases in earnings. I've bought books, music, DVDs - even MP3 players on impulse, but egg beaters? Just goes to show I am no longer the typical Internet user.
posted by willnot at 1:56 PM on July 24, 2001


They've been saying We'll be profitable in two quarters" for the past two years

That just is not true. Do you have sources for this?

And wise man say, company who no make money eventually fade away, or get eaten by bigger company who do...

Have you ever looked at AOL's financials from '94-97? They went through a long period of making little or no profit. And no one has bought them out yet.
posted by gluechunk at 2:21 PM on July 24, 2001


Have you ever looked at AOL's financials from '94-97? They went through a long period of making little or no profit. And no one has bought them out yet.

Except AOL isn't selling atoms.

To paraphrase Colonel Trautman, It's Over. It's over Jeffy. It's over!

posted by ParisParamus at 3:34 PM on July 24, 2001


Predictions: ParisParamus: Amazon. Chapter 11 or purchase by another company by March 1, 2002.
posted by ParisParamus at 8:59 PM on July 24, 2001


You've got cash! (self-blog to something I wrote this afternoon)
posted by fooljay at 10:19 PM on July 24, 2001


According to my calculations, AOL x Amazon = Hbieoth. The 'h' is silent. The obvious pronounciation is buyeth.
posted by Dick Paris at 3:01 AM on July 25, 2001


Oops, mistake in my notes: it should read Hbie0th. Drop the zero.
posted by Dick Paris at 3:03 AM on July 25, 2001


Pardon me, but - bullshit. They've been saying "We'll be profitable in two quarters" for the past two years.

No, actually... they haven't. Go ahead, prove me wrong.

They've always had a very conservative stance on how their company was doing. For a very long time, they refused to even guess when they'd become profitable.

I'll admit that they might have had to change their estimates somewhat due to the turnturn across the board of the worlds economies. However, I've never felt misled by how they report their performance.
posted by jragon at 7:33 AM on July 26, 2001


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