Bezos, his laughter subdued, grows impatient with critics
Thursday, June 29th 2000, 12:00 am
By: News On 6
His focus is building Amazon.com, not profit
Jeff Bezos was nearly a half an hour into his talk at PC Expo before he let loose with The Laugh, a spontaneous honking holler for which the ebullient founder of Amazon.com is known.
But these days he is also known as a dot.com guru whose pioneering e-tail venture has yet to turn a profit, giving Internet skeptics a reason to scoff at the idea of a virtual marketplace for retail goods.
Mr. Bezos has grown impatient with Wall Street for reminding him of Amazon.com's red ink. Most analysts are guessing that Amazon.com will be profitable in 2002. But the stock market doesn't want to wait that long. Shares are down from a high of $113 six months ago to $32.50 this week.
The trouble started last week when Lehman Bros. analyst Ravi Suria described the company's credit as "weak and deteriorating."
And, Mary Meeker of Morgan Stanley Dean Witter questioned the company's outlook for revenue growth, sending the stock down more than $8. Shares closed down $1.38 Wednesday, at $37.88.
Mr. Bezos told PC Expo attendees that Amazon.com expects to generate enough cash to fund operations by the end of 2000. He also said that the Lehman report was inaccurate and that the company has $1 billion in cash.
Asked by Expo goers for his prognosis on profits, he said, with a degree of frustration: "We don't give time frames for that, and we don't give guidance on earnings. No one cares more about profits than we do, but this is a time for us to be investing in our company."
Mr. Bezos said he is investing in his vision of building a personalized virtual storefront for each customer.
"We have 20 million customers, so we have 20 million stores," he said.
Amazon.com personalizes the shopper's Internet experience with its "collaborative filtering" software, a way to group like-minded people with the products they value.
For example, Mr. Bezos said, Amazon.com looks at a customer's purchasing history and then compares the results with the purchases of all other customers.
The resulting statistical group becomes a kind of electronic collection of kindred spirits, allowing Amazon.com to recommend the kinds of books or music an individual is most likely to buy.
A new feature on Amazon.com designed to personalize information even further is the "trusted friends" list. Customers and their friends can create a list on their Amazon.com page that shows what they've been reading, listening to or shopping for.
If that sounds like Amazon.com is trying to squeeze all the spontaneity out of shopping, reducing customers to a series of algorithms, Mr. Bezos said, Amazon.com is working on the answer.
"Give people a serendipity knob. They click on it and we show them all the things we think they'll hate."
During a question and answer period, Mr. Bezos was quizzed by people worried about privacy, writers who want their books on the site and the future of the dot.com economy. His respective answers were:
1. There is no guarantee that e-commerce can foil miscreants and identity thieves. "As a society we have to track down the bad guys, deter them and build locks. And we do not sell our personalized lists to the highest bidder."
2. Unlike a bookstore in a mall, the Internet has unlimited shelf space for the books of famous and unknown authors alike. "Personalization finds that needle in the haystack you're looking for."
3. The shakeout among dot.com customers has begun.
"In 1999, every bad idea got funded. That has changed."
Though he drew the largest crowd, Mr. Bezos wasn't the only attraction at the 18th annual PC Expo at the Javits Center. Vendors demonstrated the latest in Internet appliances, "sync" technology and software for wireless devices.
Here are some sound bites from speakers and vendors at the three-day Expo, which winds down Thursday:
Jeff Hawkins, CEO of Handspring Inc., on voice recognition: "Voice sounds like one of those great things. But it's just not comfortable to me. It just doesn't seem right."
Randy Green, president of WizCom Inc., on voice recognition: "People are really tired of tapping things in on a keyboard."
Tom Christopher, demonstrating IBM's sleek new NetVista line of Internet appliances: "Thin is in. Fat, as in desktop PCs, is out."
Michael Dell, founder of Dell Computer, on PCs. "The death of the PC is hugely exaggerated."
Adam Smithline, marketing rep for FusionOne, which sells Internet sync services to transfer information between PCs, hand-helds and Web phones: "Stop worrying about all your devices. Close that deal in your Bermuda shorts on the beach. Sync anywhere."
And Mr. Bezos hadn't entirely lost his sense of humor.
He joked that the company should be known as Amazon.org, "because we are a nonprofit."