Jeff Bezos has, um, a way with words. The Amazon founder and chief executive said Wall Street may be in a "kerfuffle" over the Seattle company's...
Jeff Bezos has, um, a way with words.
The Amazon founder and chief executive said Wall Street may be in a “kerfuffle” over the Seattle company’s free-shipping promotions, low prices and investments in technology, but its strategy is best viewed long-term.
“I’ve always felt very comfortable about that (strategy) as long as we’re clear” to investors, Bezos said. Those who agree with the company’s long-term vision can “self-select in.”
The online retailer held its eighth annual shareholders meeting yesterday at Benaroya Hall. Wall Street has punished Amazon’s stock over the perception that it rewards consumers at the expense of shareholders.
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Shares have fallen 21.6 percent since the beginning of the year, largely based on concerns that less of its hefty sales will trickle to the bottom line.
Amazon in February introduced its first membership program, “Amazon Prime,” designed to entice regular customers to buy more on the site.
For $79 a year, members receive unlimited two-day shipping on every order, and overnight shipping for $3.99 an item.
It already offered free shipping on orders over $25, but customers sacrifice speed for those savings. Under that promotion, shoppers receive orders in roughly five to nine business days.
While both shipping promotions have bolstered revenue, they’ve also chipped away at profits.
The company’s first-quarter profit fell 30 percent from a year ago to $78 million, or 18 cents a share, because of income taxes, shipping promotions and one-time charges.
Bezos told shareholders yesterday that it would take years to educate customers about Amazon Prime.
Those who have tried it, however, are purchasing more on the site. “It is changing the way they use and think about Amazon,” Bezos said.
Of the pressure from Wall Street, Bezos reiterated the company’s long-term approach, repeating a Warren Buffett line about how one can hold a rock concert and be successful or hold a ballet and be successful.
“Just don’t hold a rock concert and advertise it as a ballet,” he said.
Amazon in the past year has purchased Joyo.com, the largest online bookseller in China, launched a wedding registry, and begun selling loose diamonds in the U.S., toys in Germany and magazines in Japan.
Meanwhile, the company yesterday demonstrated some fruits of its technology investments.
Amazon launched a beta version of its A9.com search engine. Users can type in keywords to search the Web, photos, books and the Yellow pages side by side.
Amazon’s shares closed yesterday at $34.73, up 19 cents.
Monica Soto Ouchi: 206-515-5632 or firstname.lastname@example.org