Is Amazons book/music/video division profitable?
In early 1999, Jeff Bezos and Joy Covey indicated in speeches and interviews that Amazon’s U.S. book business had been profitable in the fourth quarter of 1998. However, this statement was not made in any official document, nor did Bezos or Covey provide any numerical data to clarify the statement. In its 1999 annual report, Amazon stated that its U.S. book business had been profitable, on a “pro forma” basis, in the fourth quarter of 1999 and that they expected it would be profitable in the year 2000. However, Amazon declined to say what the profit was, or to explain in detail how the book division’s expenses were calculated separately from the expenses of the company as a whole. In the second quarter of 2000, Amazon announced that its whole book/music/video segment had become “pro forma” profitable. For the year 2000, the BMV segment showed a “pro forma” profit of $71 million. The claims of segment profitability have all been greeted with skepticism by many AMZN bears.
