Bezos no longer calls Amazon.com an [e-commerce] incubator. He's done with that now - he's busy writing a new script. The big news now is that during the past eight months he and his team in Seattle hav signed a flurry of deals with brick-and-mortar retailers like Target, Circuit City, and Borders. Amazon will run all or part of their e-commerce operations. It will sell the retailer's products on Amazon.com, and in some cases it will warehouse products, distribute orders, and run the partner's Website. Unlike the dot-coms, these new partners won't go out of business in a year, and they will pay Amazon in cash instead of rapidly falling stock. Bezos would like us to believe that this time it's different, that Amazon's new "commerce platform" will put the company firmly on the road to profitability - and restore to it a market cap worthy of an Internet superstar. The question anyone who owns or cares about Amazon's stock needs to ask is simple: Should we believe him?
The answer is probably, No. Whichever of Bezos' stories you read, the numbers don't look good.
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Bezos' Amazon is a land of eternal hope. The CEO still avers that Amazon can eventually generate operating margins of 10%, despite the fact that it is still miles from that goal... So yes, there is a chance that someday Amazon will grow up to be a company with real profits. But it will never be the high-growth, wildly profitable, super-efficient company of Internet lore. The only place that company lives is in the history books, and in the powerful imagination of Jeff Bezos.
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