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Amazon.com Posts Loss, but Less Than Expected

Technology: Internet retailer's revenueis up sharply, but so are expenses for marketing and business development.

April 29, 1999|From Times Wire Services

SEATTLE — Amazon.com Inc. said Wednesday that its loss widened in the first quarter, although the amount was less than analysts expected, as the giant Internet merchant racked up huge sales but boosted spending on marketing, promotions and the development of new businesses for its Web site.

Amazon lost $36.4 million, or 23 cents a share, in the latest quarter, excluding one-time merger-related costs.

That compares with a loss of $10.4 million, or 7 cents, a year ago. Wall Street had expected a loss of 29 cents a share.

Revenue climbed to $293.6 million from $87.4 million last year, topping the forecast of about $260 million from analyst Lauren Cooks Levitan of BancBoston Robertson Stephens.

Amazon saw its customer base swell to 8.4 million, nearly four times the 2.2 million it had a year ago.

Expenses rose as Chief Executive Jeffrey Bezos bought stakes in online companies such as Drugstore.com, moved into businesses including auctions and electronic greeting cards, boosted marketing spending and expanded the firm's distribution network.

That spending is drawing more customers to the retailer's Web site and will eventually yield profits, analysts said.

The Seattle-based company hasn't made a profit since it began selling books on the Internet in 1994, but analysts said the company needs to spend heavily now to cement its presence on the Web and establish itself as a leading brand.

Bezos, Amazon's founder, said more spending is ahead.

"We have begun, and will continue to build out, a significant distribution infrastructure," he said. "This will give customers greater availability, faster shipping times and even better service.

"We will also continue to invest in systems, people and product expansion, each of which helps us better serve customers. For the rest of 1999, we expect to invest more heavily than we have in the past."

Amazon.com reported its results after the close of U.S. markets. Its shares fell $12.39 to close at $193.50 on Nasdaq.

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