Holiday Success At Amazon (AMZN) Runs Against The Grain

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Jeff Bezos, the founder and CEO of Amazon (AMZN) is the Internet’s great escape artist. His company has been in trouble countless times only to emerge better off. He was beaten on by the stock market for low margins and high shipping costs. He bought profits up to show that he could, if he wanted to, produce better earnings.

When investors were concerned that all he had was on online book retailer, he increased his product offerings to include a range of items from consumer electronics to jewelry.

Bezos has been endlessly inventive. He brought the Kindle electronic book reader out earlier this year. It has been, by almost every measure, a success. Even Oprah likes it.

Bezos figured that he had excess computing and e-commerce capacity, so he allows other companies to pay to use a part of his IT infrastructure.

This holiday season has turned out to be like the wreck of the ore ship the Edmund Fitzgerald. One moment it was there, and the next moment it had sunk all the way to the bottom. Every retailer has been taken down, with the possible exception of Wal-Mart (WMT).

To the amazement of Wall St., Amazon today said it had "its best holiday ever".

In the firm’s statement it said, "Amazon announced the 2008 holiday season finished as its best ever, with over 6.3 million items ordered worldwide on the peak day, Dec. 15, which is a record-breaking 72.9 items per second."

The company cataloged the reasons for it success. It posted impressive sales for software, GPS devices, coffee, watches, and CDs.

In the final analysis, Amazon probably did so well because new products such as the Kindle build upon the consumers’ impression that the online store firm is endlessly inventive. Amazon has done what many of its Web 1.0 rivals have not been able to do. It has set the bar so high that no one else can clear it.

Douglas A. McIntyre