Amazon says there are 55 percent more developers using Amazon Web Services as of Dec. 31 compared to a year ago. In total, more than 220,000 developers are registered to use Amazon's Web services.That was one of the interesting nuggets embedded in Amazon's fourth quarter and fiscal 2006 results. For the record, Amazon reported fourth quarter earnings of $98 million, or 23 cents a share, on revenue of $3.99 billion. Those results were two cents ahead of estimates, but down from earnings of $199 million, or 47 cents a share a year ago. For 2006, Amazon had earnings of $190 million, or 45 cents a share, on revenue of $10.71 billion. Yes folks, Amazon made more money in the fourth quarter of 2005 than it did for all of 2006.
Amazon said 2007 is projected to be another year of strong revenue growth, up between 21 percent to 28 percent to $13 billion and $13.7 billion. Operating income for 2007 is a major guesstimate between $355 million and $505 million.
Luckily, Amazon is generous with the footnotes so you can figure out what the company is really blowing its money on. In a nutshell, hiring computer scientists and building out IT infrastructure certainly isn't cheap. Utility computing diversions cost money too.
Here are some notable nuggets:
Amazon is experimenting. It launched a store called endless.com, a shoe and handbag site that offers free overnight shipping. Meanwhile, profit margins aren't all that important. "Additionally, customers enjoy free return shipping, a 365-day return policy, a 110 percent price guarantee and an innovative navigation and search experience. As a special promotion in February, endless customers will receive overnight shipping for *negative* five dollars."
Technology and content costs are rising. Amazon spent $662 million on technology and content for 2006, up from $451 the previous year. In the fourth quarter, technology and content costs were up 34 percent from the year ago quarter.
The company said:
"Technology and content expenses consist principally of payroll and related expenses for employees involved in application development, category expansion, editorial content, buying, merchandising selection, and systems support, as well as costs associated with the systems and telecommunications infrastructure."
Purchases of fixed assets top $200 million a quarter. Fixed asset purchases (including internal software and Web site development) cost $216 million in the fourth quarter.
Amazon is hiring. The company had 13,900 employees at the end of the year.