Wednesday, 24 October 2007

Amazon on target for record profits

Spending on books, music and electronics helped produce an $80 million (£39 million) profit for the three months to September 30, up from $19 million (£9.5 million) for the same period the year before at online retail giant, Amazon. The final book in the boy wizard series, Harry Potter and the Deathly Hallows, became the fastest selling book ever upon its release in July with the online retailer selling 2.5 million copies during the period. However, Amazon has said it will not make a profit on the title because it offered steep discounts and free shipping. "In our view, putting customers first is the only reliable way to create lasting value for shareowners," said Jeff Bezos, founder and chief executive of Amazon.

Revenue rose 41% to $3.26bn from the same quarter last year, with shares down 10% hours after trading, following a sharp rally on the stock ahead of the results. Since January, the shares have risen from $40 (£20) to as high as $100 (£50) during Wall Street trading hours yesterday. Amazon said it anticipated a record holiday season, with expected sales of between $5.1 billion (£2.55 billion) and $5.45 billion (£2.7 billion). Its international trading division, which includes sales in the UK, Japan and China, saw sales jump 42% over the period, with sales of electronics and general merchandise gained more than those of CDs and DVDs.

The retailer also saw an increase in more profitable sales by third-party sellers, who advertise their wares on the site. The company increased its revenue forecast for the current full year to between $14.26 billion (£7.13 billion) and $14.61 billion (£7.3 billion), from earlier guidance of $13.80 billion (£6.9 billion) to $14.30 billion (£7.15 billion). (source: BBC News & Timesonline)

With a try at the growing “silver surfer” market, The Post Office has set itself ambitious growth targets as it tries to enter the broadband sector. The Post Office wants to provide a service for subscribers who want to pay for a high-speed internet connection with cash.

With very ambitious targets and a relatively late entry, the company aims to sign up more than one million broadband customers by 2010. It hopes to sign up 600,000 users over the next six months and has set aside a £9 million promotional budget. The service will launch next week with the boy band Westlife appearing in its advertisements.

The Post Office have 14,000 branches and will use their branches to make its mark in the sector. They will initially target its 400,000 telephony customers, a large number of whom have expressed interest in sourcing more communications products from the Post Office. The company has already signed up 1,000 broadband customers after a month-long trial in 124 stores. It is targeting late broadband adopters, as well as customers who are fed up with other suppliers, most notably Carphone Warehouse.

At £15.95 a month, Post Office broadband will not be the cheapest but there will be no "rural surcharges" fees which vary according to where a user is based. BT will provide the Post Office network. The Post Office believes its target broadband market – the over-50s, who already account for about 25 per cent of internet users, and people who want to pay in cash – is worth nearly £500 million. (source: Independent)

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