Bezos faces tough crowd at analyst confab
Amazon CEO Jeff Bezos says that the company plans to cut costs across its product lines. But the loquacious CEO went quiet when pressed about second-quarter sales.
"Driving down cost structure so we can afford to reduce prices--that's the thing I'm most like a broken record about," said Bezos, speaking at Bear Stearns' 13th Annual Technology Conference in New York's Grand Hyatt Hotel. Bezos is known for giving his staff a focused message; last year it was on pushing sales.
Toward Amazon's new goal, Bezos said the company has recently moved to offer 30 percent discounts on books costing more than $15; it had previously offered the discount on books that were $20 and over. He said Amazon would also like to provide free shipping on orders less than $99. The company currently offers free shipping on orders $99 and higher.
Changes will occur slowly and gradually as the company finds ways to cut costs and reduce prices, Bezos said. In addition, Amazon will continue to focus on broadening its selection, either through more partnerships or by opening new categories on its own.
But the CEO's characteristic guffaw, which echoed through the ballroom of the hotel in the minutes before his keynote presentation to the 2,000-some attendees, went silent when he was put on the spot about second-quarter sales.
Bear Stearns analyst Jeffrey Feiler asked Bezos how the second quarter was going, and the CEO responded in line with Regulation FD, which prohibits companies from releasing material information without an accompanying press release.
"You don't seriously expect me to answer that," Bezos said.
"No," Feiler responded, "but I want to see if you'll laugh. If it's a loud laugh, I'll make a serious inference from that."
Bezos then fell into an awkward silence before Feiler moved on to his next question.
The CEO took on a tough crowd at the conference.
Hours before Bezos spoke, a panel of fund managers here, discussing the outlook for technology stocks, had pointed to the stocks of companies like Amazon as evidence that the market might not be bearish enough on technology stocks.
"It still surprises me that stocks like Amazon, eBay and Yahoo have some of the highest valuations and the crappiest fundamentals" said Paul Wick, managing director of investment firm J&W Seligman, making a slight exception for eBay, which he said had better fundamentals.
Mark Herskovitz, senior portfolio manager of mutual fund company Dreyfus, listed Amazon as a stock to short sell--that is, attempt to profit from a stock that investors bet will fail. The list also included stock of other Internet players such as PayPal.
Speakers at the conference were critical of more than just Internet stocks. Andy Neff, Bear Stearns' analyst moderating the panel, which covered the universe of technology stocks, said he wanted to close it on a positive note, but he couldn't think of one.
"Please, don't shoot us," one of the panelists joked.
Despite skepticism among many analysts, Amazon's stock has outperformed the Nasdaq composite index by 40 percent this year, according to Feiler.
Bezos said he is confident that online sales will make up about 15 percent of overall retail sales, and that Amazon can grab a large portion of that market.