Amazon: The Internet’s Fool Has His Day

By Douglas A. McIntyre Published Apr 24, 8:55PM EDT

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Jeff Bezos, the founder and CEO of Amazon (AMZN), has not been a favorite of the press or Wall St. Barron’s often complains that Amazon’s financial statement are not transparent. The company is often taken to task for paying for free shipping which hurts margins.

Of course, the Amazon is in too many businesses. It sells books, DVDs, consumer electronics and a Fibber McGee’s closet of other stuff. The company also has its own internet video download service called UnBox.

Amazon even sells enterprise customers access to its e-commerce and storage platforms. The company’s pitch for its business-to-business operation is simple: "Amazon has spent 11 years and over $2 billion building the infrastructure, technical knowledge,"

The company has been portrayed as unfocused, undisciplined, and poorly managed. The primary blame falls on Bezos, the only CEO Amazon has ever had.

Jeff Bezos need not wear the Fool’s hat any longer.

In the latest quarter, revenue rose 32% to $3.02 billion. According to The Wall Street Journal "Amazon’s spending on technology and content in the quarter rose 27% from a year earlier to $186 million." But this rate of spending is significantly slower than it has been in the recent past.

Amazon also raised its forecasts for revenue and earnings in the next quarter and for the full year.

As it turns out, the key to Amazon’s growth is its diversification away from selling only a few categories of items. According to MarketWatch: "The results got a boost by stronger sales of electronics, which jumped 48% to around $947 million."

Bezos has had a rough ride. Six years ago, its shares were below $6 and recovered to $60 in 2003. But, concerns about the company’s lack of focus and free spending on marketing and technology pushed the shares back below $26 last August. After hours today, the shares were up over 12% to $50.30. Investors have doubled their money in nine months.

As recently as last November, a well-know Wall St. analyst slammed Amazon in BusinessWeek: "I have yet to see how these investments are producing any profit," gripes Piper Jaffray & Co’s Safa Rashtchy. "They’re probably more of a distraction than anything else."

Now Bezos can thumb his nose at all of them.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.