Amazon has six weeks to make a profit

NEWS Online bookseller Amazon is to consolidate its US and international sales in a bid to streamline business as its self-imposed profitability deadline draws near. The consolidation, part of an overall company restructure, will strengthen Amazon's position as a worldwide company, according to a statement issued by Amazon yesterday. But the move also comes as the company struggles to meet its self-imposed profitability deadline of 31 December, repeatedly predicted by Amazon CEO Jeff Bezos. While Amazon's UK and German divisions struck profitability in the last quarter after less than two years in business, Amazon.com is still posting losses after six years. Net loss for its latest quarter fell by 30 per cent on the previous year - down from $241m in Q3 2000 to $170m this year - but for the first time Bezos tempered his profitability predictions, saying there were no "guarantees". Sales figures for this quarter were forecast to remain flat or rise by a maximum of 10 per cent. While consolidation with the profitable UK and German figures will give an overall push towards profitability, the restructure also puts a greater emphasis on promoting sales from Amazon's third party alliances, including Borders and Toys R Us. Amazon will restructure into five separate divisions, dealing with retail, services, customer service, and application and platform technology. The company has seen sales of books, music and video fall from $400m in the third quarter of last year to $351m in the same quarter this year, and up to six of the dot-com companies it carved alliances with last year have apparently now gone out of business without paying fees.
While shares in Amazon.com jumped over 30 per cent on Wednesday on the back of a positive Christmas e-tail forecast from AOL Time Warner, shares gained just under three per cent today.