Amazon's early stage businesses will become profitable over time, and Amazon has already announced a target date for companywide profitability.

The claim has two parts. (1) Factual: as of 2001-04-02, Amazon had already publicly announced a target date for companywide profitability. (2) Prediction with no horizon: the businesses Amazon then called early-stage (those it classed as early-stage at the time) would become profitable over time. True: Amazon had announced such a target before 2001-04-02, and those early-stage businesses, or the segment containing them, later reported operating profit. Mostly true: both parts hold, but there is a minor slip, for example the announced target was framed as pro forma operating profit rather than profitability in general, or one minor early-stage business never became profitable. Mixed: one part holds and the other does not. Mostly false: the target had not been announced by that date, and only a small part of the early-stage businesses became profitable. False: no target had been announced, and the early-stage businesses were closed or stayed unprofitable.

Set before the research began.

1. E1 Amazon to Cut 1,300 Jobs in Bid for Profit Los Angeles Times · 31 January 2001

   “The announcement marked the first time Amazon has publicly set a target date for profitability, although company executives said they have long focused on the end of 2001 as a goal for getting the firm into the black.”

2. E2 Amazon Reports Its First Profit Los Angeles Times · 23 January 2002

   “Amazon promised Wall Street that by the end of 2001, it would post a pro forma operating profit--a loose measure that excludes routine business expenses such as restructuring costs, amortization of goodwill and the cost of paying employees with stock.”

3. E3 d10k405.txt (Amazon.com, Inc. Form 10-K for fiscal year ended December 31, 2000) U.S. Securities and Exchange Commission (filed by Amazon.com, Inc.)

   “While we generated pro forma operating segment profit in our U.S. Books, Music and DVD/video segment for the full year 2000 and have projected pro forma operating profit for the Company as a whole for the fourth quarter of 2001”

4. E4 Press Release dated January 22, 2002 - SEC.gov U.S. Securities and Exchange Commission (exhibit to Amazon.com, Inc. filing) · 22 January 2002

   “Pro forma operating losses from our International sites declined by 76% to $11 million, or 4% of International net sales in fourth quarter 2001.”

5. E5 (none) U.S. Securities and Exchange Commission (EDGAR, Amazon.com, Inc. filing) Own record

   “Fiscal 2001 pro forma operating loss was $45 million, an improvement of more than $270 million.”

6. E6 (none) U.S. Securities and Exchange Commission (EDGAR, Amazon.com, Inc. filing) Own record

   “Pro forma loss from operations is expected to be between break-even and $16 million, or between 0% and 2% of net sales.”

7. E7 (none) U.S. Securities and Exchange Commission (EDGAR, Amazon.com, Inc. filing) Own record

   “Pro forma income from operations is expected to be $30 million or more.”

8. E8 (none) U.S. Securities and Exchange Commission (EDGAR, Amazon.com, Inc. filing) Own record

   “Pro forma operating losses from our International sites declined by 76% to $11 million, or 4% of International net sales in fourth quarter 2001.”

9. E9 Earnings: Amazon reports pro forma profit, Lucent posts loss Computerworld · 22 January 2002

   “Amazon.com said it exceeded the goal it set a year ago — to reach pro forma operating profitability during the quarter — by delivering not only a pro forma operating profit, which excludes certain expenses, but also a pro forma net profit.”

10. E10 2 Amazon.com, Inc. (2001 annual report to shareholders, as hosted at this URL) Own record

    “As I mentioned, we exceeded our goals for the fourth quarter with pro forma operating profit of $59 million and pro forma net profit of $35 million.”

11. E11 2 Amazon.com, Inc. (2001 annual report to shareholders, as hosted at this URL) Own record

    “The U.K. and Germany, our largest international markets, had a combined pro forma operating profit for the first time in Q4.”

12. E12 Amazon.com finally turns a profit Macworld · 21 January 2002

    “For the full year, Amazon.com expects to see another 10 percent growth in net sales, positive operating cash flow and pro forma income from operations to be $30 million or more.”

The factual part holds, with a minor slip. In January 2001 Amazon publicly set a target date for profitability for the first time (E1), and its fiscal 2000 10-K projected pro forma operating profit for the whole company in Q4 2001 (E3); a later report describes the target as a pro forma operating profit by the end of 2001 (E2). So the target was framed as pro forma profit rather than profitability in general. On the prediction part, the evidence does not identify which businesses Amazon then called early-stage, and it does not show that they, or the segment containing them, later reported operating profit. International sites still had a pro forma operating loss in Q4 2001 (E4), and the only report of profit there is Amazon's own claim that the U.K. and Germany were profitable on a pro forma basis (E11). With the second part unsettled, the evidence does not support a verdict under the criteria.