Advice from Jeff Bezos to Amazon.com Investors: Patience

Posted by: Rob Hof on May 17, 2005

Amazon.com has an interesting new feature that lets you see how often a particular word occurs in a book, and the most frequent show up in bigger type. If such a feature could be applied to its annual meeting today, I suspect the word “years” would tower over most of the others.

When CEO Jeff Bezos talked about the e-tailer's fledgling operations in China, he noted: "This is an investment that will take many years to succeed." Then he showed a slide that indicated how many of its international operations still aren't selling nearly the breadth of products as the U.S. unit. "There's years and years of work ahead of us to continue to build out these categories," he said.

Bezos also talked about how Amazon Prime, its new $79-a-year free-shipping plan, would take years to catch on with customers. Near the end of the meeting, a shareholder asked whether Amazon would ever have too much free cash flow, the company's preferred measure of financial success, to be able to invest it wisely. "We have so much greenfield ahead of us, and so much opportunity, that I think we will be able to very profitably invest in our future," Bezos replied, apparently sensing no need to repeat the familiar time frame.

The upshot: Amazon, whose stock has been battered by worries that its growth has irreversibly slowed, is firmly in investment mode. Don't get me wrong. All those projects are likely the right thing to do for Amazon's long-term success. It just may take awhile before the word "profits" also shows up in really big letters.

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