Press Release

<< Back Announces Financial Results for First Quarter 1998

Cumulative Customer Accounts Increased 50% Quarter-to-Quarter to 2,260,000 Now 3rd Largest Bookseller in the US

SEATTLE, Wa (April 27, 1998), Inc. (NASDAQ: AMZN) today announced financial results for the first quarter of 1998.

Net sales for the first quarter ended March 31, 1998 were $87.4 million, a 32 percent increase over net sales of $66.0 million reported for the fourth quarter ended December 31, 1997. Net sales increased 446 percent over net sales of $16.0 million reported for the first quarter of 1997. Net loss for the first quarter ended March 31, 1998 was $9.26 million, or $0.40 per share, compared with a net loss in the quarter ended December 31, 1997 of $9.33 million, or $0.41 per share. The company reported a net loss of $3.04 million or $0.16 per share in the quarter ended March 31, 1997. also announced that cumulative customer accounts grew to over 2,260,000 at March 31, 1998, an increase of 50 percent from 1,510,000 customer accounts at December 31, 1997 and 564 percent from 340,000 customer accounts at March 31, 1997. Repeat customer orders represented more than 60 percent of orders placed during the quarter ended March 31, 1998.

The Web measurement services continued to highlight's growing reach among Internet users and strengthening market leadership: in March, was ranked in the top 20 across all Internet sites in all major market surveys (Media Metrix and Relevant Knowledge). In addition, not only was the leading online bookseller in these surveys, it was the leading online shopping site.

"We are very pleased with our acceleration in new customer acquisition: it took us 27 months to serve our first million customers, and less than 6 months to serve our second million," said Jeff Bezos, president and chief executive officer. "Our strong revenue growth has now made us the third largest bookseller in the US, online or offline. We believe that our leadership position in the online market allows us to offer our customers the benefits of selection, convenience, price and personalized services for an expanded range of products, such as music. And we are now inviting our customers to come help build the best music store on the Web."

Separately, today announced that it has acquired three leading Internet companies: Bookpages Limited, Telebook, Inc. and Internet Movie Database Limited. Online retailers Bookpages and Telebook are fundamental components of's expansion into the European marketplace, and Internet Movie Database is a key underpinning for's eventual entry into online video sales.

"With these acquisitions, we have accelerated our expansion into European e-commerce and acquired a foundation for a best-of-breed video store. These acquisitions will enable to offer a new set of consumers the same combination of selection, service and value that we now provide our US book customers. We remain committed to moving quickly to solidify and extend our current market leadership position in books while pursuing these new opportunities. This will require aggressive future investment in building our business and brand, expanding our product offerings, launching international operations and integrating our recent acquisitions."

Bookpages ( is one of the largest online bookstores in the United Kingdom, providing access to all 1.2 million UK books in print. Telebook (, operating through its ABC Bücherdienst subsidiary, is Germany's number one online bookstore, with a catalog of nearly 400,000 German language titles. Originally launched in 1990, Internet Movie Database ( is a comprehensive repository for movie and television information on the Internet, and is an excellent example of genuine community on the Internet.

Each of the acquisitions will be accounted for under the purchase method of accounting. The company will incur total charges of approximately $55 million in connection with all three transactions. Consideration was comprised of cash and common stock, and the company anticipates issuing an aggregate of approximately 540,000 shares of common stock as a result of these transactions.

Last week, invited music enthusiasts everywhere to contribute to developing the music store of their dreams and launched a pilot version of its online music area (accessible from the home page). Customers, artists, music industry professionals, and other music lovers can put their personal stamp on the music store is now building by contributing their ideas and music reviews.

In February, launched Advantage, an innovative new program designed to increase the visibility and sales of titles from independent publishers and authors. It will help level the playing field for smaller publishers and authors by providing the tools and framework to ensure their books appear more often, more prominently, and with 24-hour availability throughout's catalog of 3 million book, music, and other titles.

In March, launched Kids, a comprehensive resource for children's and young adult books. Kids features a catalog of more than 100,000 books for children, teens, and parents.

Separately, today announced that its Board of Directors approved a 2-for-1 split of its common stock. Shareholders will receive an additional share of common stock for every share held on the record date of May 20, 1998. The additional shares will be payable on June 1, 1998., Inc., Earth's Biggest Bookstore, is the largest online retailer of books. offers a catalog of more than 3 million book, music, and other titles, plus easy-to-use search and browse features, e-mail services, personalized shopping services, secure Web-based credit card payment, and direct shipping to customers. has virtually unlimited online shelf space and offers customers a vast selection through an efficient search-and-retrieval interface, as well as streamlined ordering through 1-ClickSM technology. pioneered the concept of syndicated selling on the Internet and has more than 40,000 members in its Associates Program including, Yahoo!, Netscape, Excite, the AltaVista Search Service, the @Home Network, the Prodigy Shopping Network, and iVillage.

This announcement contains forward-looking statements that involve risks and uncertainties that include, among others,'s limited operating history, the unpredictability of its future revenues, and risks associated with capacity constraints, management of growth, and new business opportunities. More information about factors that potentially could affect's financial results is included in the company's Annual Report on Form 10-K for the year ended December 31, 1997, both filed with the Securities and Exchange Commission., Earth's Biggest Bookstore, and 1-Click are service marks of, Inc. All other names are trademarks of their respective owners.


Statements of Operations*

(in thousands except per share amounts)
			                Quarter Ended March 31,		
			                  1998		 1997
Net sales			        $87,375       $16,005 
Cost of sales			         68,054         12,484 
Gross profit			         19,321         3,521 
Operating expenses:					
	Marketing and sales		 19,503        3,906 
	Product development		 6,729 	       1,575 
	General and administrative	 1,963 	       1,142 
	     Total operating expenses	 28,195        6,623 
Loss from operations		       (8,874)	       (3,102)
Interest income			        1,640 	         64 
Interest expense	               (2,025)	          -   
Net loss			       $(9,259)       $(3,038)
Pro forma basic and diuted             $(0.40)        $(0.16)
 loss per share
Shares used in computation of pro forma basic
and diluted loss per share                23,311        19,402
On April 27, 1998, the Company announced a two-for-one stock split,
effective June 1, 1998. The share and per share data have not been
restated to reflect this split.
Balance Sheets

In thousands except share data
(preliminary pending completion of audit)
		                   March 31,    December 31,
			              1998         1997
		        	  (Unaudited)   (Audited)
Current assets:					
	Cash and cash equivalents      $98,600     $109,810 
	Short-term investments	       18,220      15,256 
	Inventories		       11,674       8,971 
	Prepaid expenses and other     4,399 	    3,298 
		Total current assets   132,893     137,335
Fixed assets, net	                9,773 	    9,265 
Deposits			        293 	     166 
Deferred charges	               2,048 	    2,240 
		Total assets	       $145,007   $149,006 
Current liabilities:					
	Accounts payable	         $34,374  $32,697 
	Accrued advertising		 5,349 	     3,454 
	Accrued product development        -   	        -   
	Other liabilities and
          accrued expenses               8,071 	     6,167 
	Current portion of debt		   684 	     1,500 
		Total current liabilities 48,478     43,818 
Long-term debt			         76,521      76,521 
Long-term lease obligations	           181 	      181 
Stockholders' equity:					
	Preferred stock, $0.01 par value -				
	    Authorized, 10,000,000 shares				
	    Issued and outstanding - none  -   		  -   
	Common stock, $0.01 par value -				
	Authorized, 100,000,000 shares				
        Issued and outstanding,         24,162,932,   23,937,169
            shares, respectively	   242 	         239 
	Additional paid-in capital	  63,952      63,792 
	Deferred compensation		 (1,493)      (1,930)
	Accumulated deficit	         (42,874)     (33,615)
	Total stockholders' equity        19,827       28,486 
	Total liabilities and
             stockholders' equity        $145,007     $149,006 

On April 27, 1998, the Company announced a two-for-one stock split,
effective June 1, 1998. The share and per share data have not been
restated to reflect this split.

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