Jeff Bezos: The quiet man of ecommerce

Transactions speak louder than words...

Jeff Bezos, founder of Amazon.com, was in London this morning to talk up the UK launch of the e-tailer's Used Stores service, yet another turn in an ever more twisting trail being blazed by the pioneering company. Where once you visited Amazon to buy new books, you can now get second hand ones. And rare ones. And CDs. And video games. And electronic goods. And night vision goggles. And inflatable speakers for your stereo, if you so wish. The key thing about these Marketplace offerings is that Amazon doesn't have to source the goods. It simply provides the exchange mechanism through which buyers and sellers can get together. Low overheads, and a slice of commission from each deal done: a pretty tasty combination. It can also work with other websites who might want to use that kind of technology. Add these revenues to Amazon's core business of selling new goods, and you're talking significant sums of money with relatively little extra investment. Indeed, as time goes by it is becoming increasingly clear that Bezos has indeed come up with a recipe for success. He's a quietly spoken man with a big guffaw of a laugh. He's difficult to pin down: in this morning's briefing with journalists, he refused to respond to many (if any) questions with a direct answer. When will Amazon be profitable? He wouldn't say. How fast is the UK Marketplace offering growing? Wouldn't say exactly. Does he have any growth targets? Wouldn't say. Is Amazing looking at any other category of goods to sell through it? Wouldn't say. Is he talking to other companies about using the technology which underpins Marketplace? Yes - but he's got nothing specific to announce. And so on. With some CEOs, this degree of evasion would come across as shifty, as though there was something to hide. With Bezos though, you don't get that impression. He's simply a man who likes to let the facts do the talking while he gets on with plotting his baby's future. And the facts are pretty impressive. The company attracted 27 million active customers in the last 12 months. Amazon.co.uk enjoyed 2.2 million unique users in Q3 2002, up 29 per cent year-on-year, according to NetValue, making it the most-visited ecommerce site in the UK. It's now got five country specific operations outside the US (Canada, France, Germany, Japan and the UK). It offers overseas deliveries in more than 200 countries. And all this in just six years. Critics say that the profits aren't coming quickly enough. But there are many CEOs of 'real-world' start-ups who'd be jealous of these stats. And Amazon has had one profitable quarter - Q4 last year, when it turned over $1bn, a period which included Christmas. Can we expect a similar performance this year? Bezos wouldn't say, of course, but it wouldn't be a surprise. Once the company makes $1bn in revenues every quarter, it'll be profitable, Bezos reckons. And it's not far away. It won't be plain sailing though. Amazon's been described as the 800 pound gorilla of ecommerce (which is a compliment of sorts), but it's not easy to keep control of such a large, hairy beast - a young upstart can be an easier thing to handle. Diversifying into other product categories will certainly generate new revenue streams, but it can lead to brand dilution and overly complex websites. The patience of its investors will be tried if the profits don't come soon. The company has certainly had its knockers along the way. It's been accused of contributing to the dot-com bubble and subsequent crash. Its share price has certainly fluctuated widely (it's been above $100, and below $6). Not the fault of the company itself of course, but Bezos has been tainted with the same brush as other flaky dot-com CEOs in the process. But the way things are going right now, Bezos won't just have the biggest laugh. He'll have the last laugh too.