February 22, 1999 7:20 PM PST
Amazon spells out priorities
The Seattle, Washington-based company skipped some enhancements to its online bookstore late last year to open its video store, CFO Joy Covey told investors today, and will continue to focus on growth and development rather than profit. A blockbuster fourth quarter that reeled in $254 million in revenue prompted management to boost expansion plans for 1999.
"I would have preferred to delay the video launch until 1999," Covey said in an otherwise routine presentation at the BancBoston Robertson Stephens investor conference in San Francisco.
The executive also said that Amazon's book operation turned a profit in December, although the company continues to post losses overall.
Covey further revealed that new video and music offerings, plus operations in Germany and the United Kingdom, accounted for 25 percent of Amazon revenue last quarter. But she gave few hints of what Amazon would do with the $1.25 billion in cash it raised in a recent convertible debt offering.
Amazon will open a new and "highly mechanized" warehouse operation in Nevada, invest in back-office systems and branding, and increase the "bench strength" of its management team, she said.
Covey repeated early Amazon comments that it expects revenues to be higher in the current quarter than in the fourth quarter, but increased spending on infrastructure will produce a bigger loss.