Friday, April 27, 2007

A Look Behind Amazon's Q1 Numbers.

I came across a interesting summary for Amazon's Q1 results and how Wall Street has bid up the stock substantially.

"the company said it sold $3 billion worth of books, home electronics, groceries and other items between January and early March, but came away with only $115 million in profit. "

Hey, when you are a retailer of that size, low single digit (percentage wise) profit is to be expected. My question is where would they be profit wise if they didn't have the revenue from their marketplace business, where the only costs are marketing costs? My guess, somewhere way south of $115 million.

I would love to see their results when you take away Media and the 3P (Third Party)Marketplace business. Would the market reaction be a little more muted, perhaps even bearish?

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