Amazon expanding services to include menus, catalogs

Associated Press

SEATTLE — Amazon.com is well-known as a place to find books and compact discs. But how about dinner?

The Seattle-based Internet retailer is now posting — for free — restaurant menus and catalogs from medical suppliers, auto parts dealers and other merchants on its Web site. The pilot program, launched on May 22, is to test customer interest in such services, said Carrie Peters, an Amazon spokeswoman. She said she did not want to speculate on whether Amazon might offer to host transactions for such merchants or provide other services.

The program includes menus from more than 1,000 restaurants in six cities, although the company hopes restaurateurs in other cities will also send in their menus, Peters said. The test also includes thousands of catalogs from merchants offering products in eight categories: arts and hobbies, toys and accessories, industrial supplies, medical supplies, science supplies, home furnishings, lifestyle and gifts and car parts and accessories.

Some said the effort is a toe in the water to see how Amazon can best leverage its massive audience of 35 million customers into moneymaking ventures that require little investment.

"They’re trying to show these catalog companies that their platform of users can drive sales and in the process prove to them that they should pay Amazon for the distribution and sales that that site can generate," said Jeff Fieler, an analyst with Bear Stearns. "They’re trying to expand the platform without tying up a lot of capital."

At the company’s annual shareholders’ meeting on Wednesday, Chief Executive Jeff Bezos noted that while the seven-year-old company has evolved from a fledgling book seller in 1995 to a company with more than $3 billion in annual sales, its vision of help customers "find and discover anything" on the Internet hasn’t changed.

He highlighted changes over the past year that have helped the company post a quarterly profit — its first — in the fourth quarter of 2001, as well as put the company on track to post a pro forma operating income of more than $5 million for the second quarter of 2002 and more than $100 million for all of 2002.

Amazon’s pro forma income figures exclude stock-based compensation, non-cash charges as well as one-time cash charges and are higher than the income figures reported under generally accepted accounting principles. Bezos defended the use of pro forma numbers as helping give a clearer picture to investors about the company’s business performance and growth.

The company has also added pricing promotions — 30 percent discounts on books costing more than $15 and free shipping for orders over $99, Bezos said.

Later this year, customers will be able to order books, CDs and DVDs off the Amazon.com or Borders.com Web sites and pick them up from a local Borders bookstore if they’re in stock.

And the company is testing TV commercials in Portland, Ore. and Minneapolis for several months. The humorous commercials play off the inconveniences of parking, waiting in lines and finding your way around shopping centers. The company wants to see how effective the commercials are before deciding whether to expand them to other markets, Bezos said.

The crowd of more than 80 shareholders was generally approving of Bezos, interrupting his presentation with applause. One shareholder, Carol MacKinnon of Tacoma, noted that the crowd seemed kinder than the previous year’s meeting. "The shareholders are happier this year," she said. Bezos too, seemed more sophisticated than the CEO of five years ago, she said, mirroring a change in investors as well.

"I think anyone who was an investor prior to the huge run-up of the stock market and lived through the bursting of the bubble is certainly more mature," she said.