Amazon Posts First Quarterly Loss in Nine Years

For the first time since 2003, Amazon has posted a quarterly loss, thanks to increases in operating costs and charges related to its purchase of LivingSocial.com. On the bright side, the company’s revenues were up, and it’s gearing up for the intense holiday shopping season.

Computerworld’s Mikael Ricknäs reported, “Amazon.com made a net loss in the third quarter, its first loss in nine years, even as revenue increased by 27% year on year. The $274 million third-quarter loss compared with a net profit of $63 million a year earlier. Net sales grew to $13.8 billion from $10.9 billion a year earlier, Amazon said Thursday. A large chunk of the net loss, $169 million, was related to the company’s investment in online deal site LivingSocial, it said. At the same time total operating expenses increased from $10.8 billion to $13.8 billion.”

Bloomberg Businessweek quoted Forrester analyst Sucharita Mulpuru, who said, “Amazon is spending a lot to gain market share. They’re obviously, as they call it, investing in the business — everyone else would call it losing money.”

The Wall Street Journal’s Greg Bensinger and John Letzing noted, “During the quarter, Amazon introduced a new slate of Kindle Fire HD tablet computers that it said will rival leading device-maker Apple Inc. and its iPad. However, it faces fresh competition from the world’s most valuable company in the diminutive iPad Mini, set to be released on Nov. 2.”

In The Seattle Times, Amy Martinez observed that Amazon also “warned of another possible loss for the three-month period under way, sending its stock down late Thursday.”

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