Amazon's Jeff Bezos: “We Had Our First $10 Billion Quarter”
Amazon just released results for its for its fourth quarter ending December 31, 2010. The company's sales came in at $12.95 billion, which is up 36 percent from $9.52 billion in fourth quarter 2009.
Context & Ripple Effects
Amazon entered the 2010 holiday quarter after reporting $9.5 billion in fourth-quarter 2009 sales. In January 2011, it had also agreed to buy LoveFilm’s remaining shares, invested in LivingSocial, and confirmed internal tests of free grocery delivery.
The $10 billion quarterly threshold matters because it shows the retail operation growing while Amazon broadens its consumer-service bets, rather than relying on a single retail category.
First-order effects
- Amazon reported $12.95 billion in fourth-quarter sales, up 36% year over year, giving Bezos a concrete scale milestone to present to investors, suppliers and partners.
- The sales base supports Amazon’s active consumer-service portfolio, including its LoveFilm acquisition, LivingSocial investment and grocery-delivery testing.
Second-order effects
- LoveFilm and LivingSocial gain association with a retailer whose holiday sales are expanding rapidly, strengthening Amazon’s leverage to connect those services with its customer base.
- Retail rivals face an Amazon able to pursue adjacent services while maintaining double-digit sales growth, increasing pressure to compete beyond core online merchandise.
Third-order effects
- If Amazon continues pairing retail growth with investments, acquisitions and delivery experiments, the company’s competitive boundary shifts from online retail toward a broader bundle of consumer commerce and media services.
The trend: Amazon’s growth is becoming a platform expansion story, using a larger retail base to support moves into delivery, digital entertainment and consumer promotions.