I was wrong.
It's interesting how muted the response was to the news last week that Amazon.com — after six years in business and as the poster child for the dot-com boom and bust — finally announced real profits.
Amazon had announced profits before, but they were always a little fishy, leaving off the table little things like stock options and losses on investments. But there was no doubt about the fourth quarter of 2001: Driven by an extraordinary burst in the Christmas shopping season (apparently there was more fear of bombs at Borders than anthrax in Amazon boxes), Amazon finally crossed over into the Land of the Black Numbers.
So why the comparatively dampened coverage of the news? One obvious answer is that we are still in the aftershock of the bursting of the dot-com bubble. After looking at our demolished stock portfolios, we don't want to hear about e-commerce or e-commerce companies.
On top of that, most people who owned Amazon stock two years ago, when it went to more than $100 per share, had bailed out by last spring when it went below $10. Anybody that was left, who hung on for the three month rally that followed, were no doubt driven off on July 24 when the stock fell nearly 20 percent in a single day.
Since then, Amazon's stock price has made a long, slow climb, regaining all that it has lost since that dark summer day. But, except for analysts, nobody has much noticed.
There is a second, more subtle reason for the muted response to the news. It is that the same media that predicted the demise of Amazon are not especially thrilled to see it, Lazarus-like, return from the grave. Rather, we were prepared to write our Death of Amazon lamentation, complete with the ritual headline about how the emblematic company of an emblematic era had emblematically given up the ghost.
Sideways From Books
Why were we in the media so down on Amazon? Well, we weren't at first. Nobody in the word business ever objects to a successful bookselling business — certainly not reporters, all of whom secretly dream of that big best seller that finally liberates them from the newsroom. The idea of a delivery system that finally brought the Byzantine world of publishing into the digital age was certainly heady.
But there was always something a little weird about Amazon.com. Part of it Jeff Bezos, whose wide-eyed look and excited patter seemed a little too much like a demented gnome. Then there was the business itself. The books we could understand, though it was hard to see where the profits lay. But then Amazon went sideways — into CDs, then video, then furniture and appliances, then after eBay in auctions, the used goods.
The company, unbelievably cash rich from its inflated stock prices, also went on an acquisition tear, buying, as Bezos now admits, not only companies in markets in which it wanted to compete, but also in markets it might someday maybe want to compete in.
To the outside observer, this all started to look like a New Economy version of the Old Economy joke: the one about losing money on every item, but making it up in volume. Don't worry, Bezos kept telling the slack-jawed analysts, we'll just keep getting bigger and — soon — the profits will come.
But the profits never came. And the skepticism about Amazon that followed, combined with an outrageously high Nasdaq, the surfeit of dot-coms with absurd business strategies, and the government's attack on Microsoft, that finally popped the bubble.