Amazon: Real Estate Efficiencies Are
Key to Improved Financials

Amazon's Click-and-Mortar Report... On April 26, Amazon.com, the Internet's largest retailer, announced its first quarter 2000 financial results. According to the New York Times (April 27), sales rose 95% to $574 million, although Amazon lost $308 million. The company has $1 billion in cash and the results generally exceeded analysts' expectations. So the market greeted the announcement positively with the stock rising slightly to $53.50 (although down from a high of $113 last December).

But to me the really intriguing part of the Time's coverage was the following: "Amazon said that its pro-forma operating loss represented 17 percent of sales but that it hoped to reduce that to less than 10 percent of sales by the fourth quarter of this year. That improvement will come largely from increased efficiency in the company's sprawling network of seven warehouses." ... Doesn't that make you smile? A virtual company with "sprawling" real estate.

Here's another story that will warm your heart. From the April 10 San Francisco Chronicle, "After suffering meltdowns in delivery and site access during the 1999 holiday season, Toysrus.com is moving aggressively to beef up its infrastructure. Today the company will announce that it is setting up huge fulfillment centers in Ontario, CA, and Chamberburg, PA, and is retrofitting its existing Memphis, TN, warehouse. Together the three facilities will have just short of 2 million square feet of space. Each warehouse will be highly automated and employ 300 fulltime workers, ramping up to 800 each over the holidays." (Watch that parking ratio!)

PikeNet Expo... The PikeNet Expo will be held at the New York City Hilton on Monday and Tuesday, October 23-24, 2000. At this trade show, we'll showcase web services that enable corporate real estate directors to add value to their companies. ... Interested in exhibiting your product or service? Check out the preliminary information at the Expo web site. Send e-mail to me at ppike@pikenet.com.

--Peter