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Amazon.com Releases Preliminary Fourth Quarter Highlights -- Sales Up More Than 40% Over 1999, Fueled by Growth in Electronics, Kitchen and Tools

SEATTLE--Jan. 8, 2001—-

Cumulative Customer Accounts Increased a Record 4 Million During the

Quarter to over 29 million; Gross Profit over $210 Million, an Increase of over 140%, and Inventory Under $175 million, a Decrease of over 20%, from 1999

Leading online retailer Amazon.com, Inc. (Nasdaq:AMZN) today announced that net sales for the December quarter of 2000 are expected to exceed $960 million, an increase of more than 40% over net sales of $676 million in the fourth quarter of 1999.

Gross profit for the fourth quarter of 2000 is expected to be over $210 million, an increase of more than 140% over the prior year. Pro forma operating loss for the fourth quarter of 2000 is expected to be less than 7% of net sales, compared to a pro forma operating loss of 26% of net sales in the fourth quarter of 1999.

“This holiday season customers purchased record amounts from our electronics, kitchen and tools stores,” said Jeff Bezos, Amazon.com chief executive officer. “More than 35% of U.S. customers made purchases during the quarter from a store other than books, music or DVD/video. And, for the second quarter in a row, the electronics store was the second-largest U.S. store, behind books.”

“We’re pleased that during a period of broad softening in consumer spending, we delivered sales within our guidance, and at the same time met our bottom-line objectives,” said Warren Jenson, Amazon.com chief financial officer. “We expect to report an inventory balance for year-end of less than $175 million, while also reporting an increase in gross profit of over 140%. We’re entering 2001 in a solid financial position with approximately $1.1 billion in cash and marketable securities.”

Amazon.com was ranked 1st in Nielsen//NetRatings rankings of top holiday 2000 e-tailers based on total shopping visits. Amazon.com’s shopping visits numbered more than five times those of the second-ranked e-tailing site and more than the combined total shopping visits for the sites ranked second through seventh.

Amazon.com expects to release complete fourth quarter 2000 results after market close on Tuesday, January 30, 2001. A conference call to discuss fourth quarter 2000 financial results and 2001 business outlook will be Webcast live on Tuesday, January 30, 2001, at 5:00 p.m. EST/2:00 p.m. PST. This conference call will be available at www.amazon.com/ir through March 31, 2001, and will contain forward-looking statements and other material information. Notes on Financial Presentation

The financial highlights in this release are preliminary and unaudited and should not be considered a complete disclosure of our quarterly or annual results. Financial results are prepared in accordance with U.S. generally accepted accounting principles. Pro forma financial results exclude stock-based compensation costs, amortization of goodwill and other intangibles, acquisition-related and other costs, noncash investment gains and losses, net, and equity in losses of equity-method investees, net.

The Electronics store business includes Amazon.com Electronics, Video Games and Software. Customer accounts exclude Amazon Commerce Network partners’ businesses and Amazon.com’s catalog businesses but include Toysrus.com customers and users of Amazon Marketplace services. About Amazon.com

Amazon.com (Amazon.com, Inc., and its subsidiaries) is the Internet’s No. 1 retailer. Amazon.com (Nasdaq:AMZN) opened its virtual doors on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection, along with online auctions and free electronic greeting cards. Amazon.com seeks to be the world’s most customer-centric company, where customers can find and discover anything they might want to buy online. Amazon.com lists more than 28 million unique items in categories such as electronics, kitchen products, books, music, DVDs, videos, camera and photo items, toys, software, computer and video games, tools and hardware, lawn and patio items, and wireless products. Through Amazon.com zShops, any business or individual can sell virtually anything to Amazon.com’s more than 29 million customers, and with Amazon.com Payments, sellers can accept credit card transactions, avoiding the hassles of offline payments.

Amazon.com operates four international Web sites: www.amazon.fr, www.amazon.co.uk, www.amazon.de and www.amazon.co.jp. It also operates the Internet Movie Database (www.imdb.com), the Web’s comprehensive and authoritative source of information on more than 250,000 movies and entertainment titles and 1 million cast and crew members dating from the birth of film in 1891 to 2003.

Amazon Anywhere is the leader in mobile e-commerce, providing access from anywhere in the world to Amazon.com, Amazon.co.uk and Amazon.de on personal digital assistants (PDAs) and through handheld wireless Internet devices that use HDML or the Wireless Application Protocol.

This press release contains preliminary and unaudited statements regarding results for the fourth quarter of 2000, including statements relating to expectations of sales, gross profit, pro forma operating loss, inventory, cash and marketable securities and other results of operations. Actual results could differ materially for a variety of reasons, including customer returns and refunds, other revenue-related adjustments, inventory-related adjustments, and actual operating and nonoperating expenses and adjustments. In addition, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are inherently difficult to predict, and actual results could differ materially for a variety of reasons, including, among others, Amazon.com's limited operating history, anticipated losses, significant amount of indebtedness, unpredictability of future revenues, potential fluctuations in quarterly operating results, seasonality, consumer trends, competition, risk of distribution center expansion, risks related to fourth quarter performance, risks of system interruption, management of potential growth, inventory risks, risks related to auction and zShops services, risks related to fraud and Amazon.com Payments, and risks of new business areas, international expansion, business combinations, strategic alliances and the Amazon Commerce Network. More information about factors that potentially could affect Amazon.com's financial results is included in Amazon.com's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1999, and all subsequent Quarterly Reports on Form 10-Q.

Amazon.com

(MM)      Q4 99 Q1 00  Q2 00 Q3 00       Q4 00        Y-0-Y Growth
          ----- -----  ----- ----- ---------------- ----------------  
                                            (Preliminary)

Net Sales $676  $574  $578  $638  Greater Than $960 Greater Than 40%

Gross 
 Profit   $ 88  $128  $136  $167  Greater Than $210 Greater Than 140%

Pro-Forma
 Operating 
 Loss as a 
 Percentage
 of Sales -26%  -17%  -16%  -11%      Less Than -7%            N/A


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